Know Before You Go: VAT Refunds

Did you know that as a tourist shopping in a foreign country you can get a refund on the sales tax or VAT (Value Added Tax) on your purchases when you leave the country?

You can. With a minimum total purchase, often equivalent to about USD$100, made at a “tax-free” or “tourist” shop, and a form provided by the shop, many countries will refund you the amount of tax paid.

Find out what the minimum purchase amount is in the country you are in by checking guide books or on the Internet before going. We recommend checking before you travel so you can be prepared for the process. It can be a bit of a process. Some places have rules and regulations that will make your head spin, so make sure you know what the rules are before you leave home.

As you are shopping, if you decide you want to make a big ticket purchase, check the front windows, door, and exterior of the shop as well as around the pay counter for a sign that indicates this shop is a VAT Refund qualified and designated shop. Some countries feature a Tax Free Shopping sign.

We recommend you carry a distinctive colored envelope in your pack or purse to store the paperwork you will get with each purchase. Keep it with you. Write the following information on the envelope, especially if you cannot keep your passport with you after your arrival in the country (some hotels are required to keep it for you), or you choose to leave it in the hotel’s safe deposit box.

• Your passport number
• Passport issue location
• Passport issue and expiration dates

Always carry two pens with you for taking notes as well as filling in the forms.

Fill in all the blanks in the form. When asked if you would like a refund by mail (check), credit card, or cash, choose cash or credit card for speed and security. If you choose check or cash, upon your arrival at the airport for departure, before going to the ticket counter check with an official on how to handle the refund. Different countries and airports have different procedures.

We don’t offer this tip lightly. In the United States, the average sales tax on purchases is around 10% of the total purchase price. In Israel, it’s 18%. Belgim is 21%. Sweden is 25%. Italy is 20%. That adds up to a LOT of money that you can get back before leaving the country.

And enjoy the savings on your trip! There’s a helpful article on Frommers about VAT Refunds, also. For more information, check with the main corporations behind international sales tax refunds in the EU at Global Refund and Premier Tax Free