Value-added tax, similar to sales tax, is called I.V.A. in Spain (pronounced "ee-vah," for impuesto sobre el valor añadido). It's levied on both products and services, such as hotel rooms and restaurant meals. When in doubt about whether tax is included, ask, "Está incluido el I.V.A.?" As of July 2010, the I.V.A. rate for hotels and restaurants is 8%, regardless of their number of stars. A special tax law for the Canary Islands allows hotels and restaurants there to charge 4% I.V.A. Menus will generally say at the bottom whether tax is included (I.V.A. incluido) or not (más 8% I.V.A.).
Although food, pharmaceuticals, and household items are taxed at the lowest rate, most consumer goods are now taxed at 18%. A number of shops participate in Global Refund (formerly Europe Tax-Free Shopping), a V.A.T. refund service that makes getting your money back relatively hassle-free. You cannot get a refund on the V.A.T. for such items as meals or services such as hotel accommodation or taxi fares.
When making a purchase that qualifies for Global Refund, find out whether the merchant gives refunds—not all stores do, nor are they required to—and ask for a V.A.T. refund form. Have the form stamped like any customs form by customs officials when you leave the country or, if you're visiting several European Union countries, when you leave the EU. After you're through passport control, take the form to a refund-service counter for an on-the-spot refund (which is usually the quickest and easiest option), or mail it to the address on the form (or the envelope with it) after you arrive home. You receive the total refund stated on the form, but the processing time can be long, especially if you request a credit-card adjustment.
Global Blue is a Europe-wide service with 225,000 affiliated stores and more than 700 refund counters at major airports and border crossings. The refund form, called a Tax Free Check or Refund Cheque, is the most common across the European continent. The service issues refunds in the form of cash, check, or credit-card adjustment.
Global Blue (800/32-111111 Toll free from Spain; 421/232-111111 Mon.-Fri. 8-6. www.globalblue.com.)
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