When traveling internationally, you have likely heard of VAT (Value Added Tax). Here is what you need to know:
What is it? It’s a tax added onto merchandise and certain services as a source of revenue for the country. The European Union, Canada, Japan and Australia all use the VAT.
Why are American’s exempt? Because the merchandise will be leaving with the traveler, it is considered an export, and the tax is refundable.
How is the rate set? Each country sets their own rates and the rate fluctuates by type of product. The prices you see on merchandise in Europe include the VAT. Many countries do have a minimum purchase amount to be eligible for a refund.
How do I get my refund? Many shops, especially those catering to tourists, will work with a larger company who handles the refunds and most work with Global Blue or Premier Tax Free. If your merchant participates in either program, they will likely have a “Tax Free Shopping” or “Premier Tax Free” sign in their window. Once you have made your purchase the merchant will issue a cheque in the amount of the refund. When you’re at the airport or at a border crossing, you will need to present the cheque and your passport for it to be stamped by a customs official. You can then go into a Global Blue or Premier Tax Free office located at all major European airports and your refund will be issued. Please note, these companies do have a processing and handling fee.
Merchant not with Global Blue or Premier Tax Free? Not to worry, just make sure your merchant issues you a VAT refund form. Once your form is stamped by Customs, you will need to send the form back to the merchant for a refund by check or credit card.
Things to keep in mind —
You will need your form or cheque and your original receipt to obtain your refund.
Your form or cheque needs to be stamped by a customs official in order to obtain your refund. Before you leave the European Union, be sure to have your form stamped to be eligible. In order to stamp your form, the agent may need to inspect the item, make sure to pack anything you’d like a VAT refund on in your carry on luggage.
Still have questions? We’re here to help, contact InterTrav Corporation toll-free, 1-800-624-8338. Taking an InterTrav tour? Rest assured, our Tour Escorts are very knowledgeable about VAT refunds and can assist you with the process.