Shopping Abroad? Don't Forget to Claim a VAT Refund

Map Happy, November 17, 2014
Fares from Washington DC:

    Did you know that you can get money back on your purchases in places like... every EU country? Puts some spring in your Paris shopping, doesn't it.

    It pains me to think of the accumulated small fortune I've left behind in refundable taxes over the years particularly during my various European escapades. But now I know better, and I'm here with information about how to rightly claim what is yours, which can be up to 25% back in VAT in certain countries.

    What is it?

    VAT stands for "value added tax" and it's federal sales tax. If I, as a US citizen, am shopping in Spain, I'm excused from paying that sales tax that gets tacked on in stores. I'll usually have to pay it up front but with the right steps I can get it back—cash back—before even leaving the country.

    A slew of countries offer refunds of some amount, including all the EU members. Were I to list all countries and their VAT schemes in this post we'd be here forever because countries from St. Kitts to Moldova all offer a little somethin' somethin' back. I've included a chart below for 2013's 10 most visited countries at the end of this article as a start. Otherwise there's a lengthy list on Wikipedia here. (I recommend cross-checking this with an online search for the details about specific countries.)

    Individual stores can choose whether to offer the VAT refund, too. Retailers that cater to foreign shoppers likely will and, the bigger the operation, the more likely they are to participate. Still, I know here in Argentina for example a lot of small designer boutiques have the system set up to help visitors claim VAT.

    There's usually a minimum purchase amount so your best bet is to do all of your shopping in one place. The added bonus is this makes for less paperwork, too.

    What's required?

    It takes a little planning and some extra steps to get money back but I don't think it's anything too crazy or cumbersome. I definitely think it's worth it if it can make a purchase cost 1/4 less than it would otherwise. Here's what to do:

    1. Take your passport to shop. Double-check that the retailer knows what's up with the VAT refund and participates.
    2. Ask the salesperson to hook you up with the document you need. He or she needs to fill it out as well.
    3. Keep all your purchases, receipt and forms together to show at customs before heading back home and have customs stamp the documents.
    4. Get your money back. This can either be done right at the airport at certain refund offices or by mailing in forms once you're home. The system will depend on which retailer you bought from works with.

    With any luck, some stores can handle the nitty gritty with documents and reimbursements to reimburse right on the spot.

    Below are the VAT schemes for the 10 most visited countries in 2013, according to the United Nations World Trade Organization.

    France - 20%
    United States - No*
    Spain - 21%
    China - 17%
    Italy - 22%
    Turkey - 18%
    Germany - 19%
    United Kingdom - 20%
    Russia - 18%
    Thailand - 7%

    *Individual states levy sales tax so there's no VAT refund. But if you're in NYC, consider crossing into New Hampshire and Delaware for shopping. No sales tax! And my home state of New Jersey has no sales tax on clothing, either, which also includes shoes.

    This post originally appeared on Map Happy.