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A review of VAT refund procedures: can we post your excellent review here, eurotravler?

A review of VAT refund procedures: can we post your excellent review here, eurotravler?

Mar 4th, 2004, 09:24 AM
  #1  
rex
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Join Date: Jan 2003
Posts: 13,194
A review of VAT refund procedures: can we post your excellent review here, eurotravler?

As mentioned on the thread where you just recently posted it, it would benefit many people if your excellent review were posted here under a message header that actually mentions VAT refund.

I'll let you post it here, rather than being a cut-and-paster...

Best wishes,

Rex
rex is offline  
Mar 4th, 2004, 04:54 PM
  #2  
 
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Posts: 297
Most European governments impose a value-added tax or VAT,a national sales tax of sorts,on goods and services. It's usually about 20 percent and is buried in the price. Although non Europeans often qualify for a partial refund of this tax, they leave roughly a half-billion dollars in refundable VAT unclaimed each year. Generally, travelers are entitled to refunds of the tax on merchandise only,in other words, on the kind of stuff that can be exported. Business travelers, on the other hand, can receive VAT refunds on their vehicle rentals, their gasoline and diesel fuel, and even on their lodging and meals. Austria, however, offers a similarly wide range of refunds to mere tourists.


Let's begin by noting what a VAT refund is not. A VAT refund is not the same as the "duty-free" or "tax-free" offers available at airports, on planes, or on ships: these involve a part or all of the customs duty or tax being waived on certain luxury and highly taxed items such as jewelry, liquor, and tobacco.

You can secure a true VAT refund in one of four ways. The first and easiest way is to buy from a merchant who has enrolled in the Europe Tax-free Shopping (ETS) plan. Over 60,000 merchants now participate in this plan. These businesses display in their windows the "Tax Free for Tourists" sticker . (In the Netherlands the sticker reads "Tax-Free Shopping Holland".) They'll issue a VAT refund check on the spot. Some businesses that don't display the sticker do participate; always ask. ETS is actually a corporation. It maintains desks at major exit points where you can cash your refund checks.

The second way to get a VAT refund is by mailing a refund application back to the store after originally paying the VAT. If you produce a foreign passport at the time of purchase from a non-ETS merchant, the merchant will write-up a VAT refund form and present you with a copy. (In a few areas, however, you may have to obtain the forms yourself from customs officials or tourist offices.) When you leave the country you simply show your form to customs officials who then validate it with a stamp. Finally, you mail the form back to the store. Of course it's best to mail the form before you leave the country; most exit points airports, for example,provide a conspicuously placed mail box for such purposes. If you used a credit card to make your purchase,as you should you'll receive your refund as a credit to your account. If you paid cash, you'll receive a check in the foreign currency. Expect to wait up to three months for a refund.

The third way to get a refund is by the exit method. Certain countries allow you to submit your refund forms to a customs official upon exiting the country. If this is the case, you'll get cash or a check on the spot. Yet qualifying exit points are few; if you leave through an infrequently used exit point, you may have to use the mailing procedure instead.

The fourth and final method is the direct export method. Some countries allow you to avoid paying VAT if the merchant directly sends the merchandise to your home by mail. This method can be expensive, however: the shipping and insurance will cost you, and the package may be subject to customs duty at home. Use this method for ungainly or heavy items only, items that you don't want to lug around.

Of course the tax rate varies considerably from country to country. What's more, the procedures and requirements necessary to obtain VAT refunds tend to vary from country to country, store to store, and purchase to purchase. Some countries disallow certain of the above methods. Some countries enforce a time window in which you can leave the country before a refund becomes invalid. And the refund might be subject to additional handling fees, fees which may amount to as much as 3 percent of the purchase price. Most countries, in order to avoid processing paperwork for small purchases, impose a minimum purchase value that you must meet to qualify for a refund; individual stores may impose higher thresholds or apply them to each item individually rather than to your total bill. In fact, some countries let individual stores decide if they'll grant any refund at all.
eurotravler is offline  
Mar 4th, 2004, 10:03 PM
  #3  
 
Join Date: Apr 2003
Posts: 17,211
Eurotravler omits one important point.

Although VAT is levied by individual countries, the rules about how it is levied are determined by the EU, not the individual countries.

One rule is that VAT refunds may be made only to:
- people not ordinarily resident in the EU, who
- are exporting merchandise outside the EU.

Merely taking goods outside the country doesn't count. They have to be leaving the EU. While the details of how this actually works may vary (often incomprehensibly), the principle doesn't.

As an example, see http://www.agenziadogane.it/italiano...va-inglese.htm
flanneruk is offline  
Mar 4th, 2004, 11:37 PM
  #4  
chas
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This is the site for UK visitors wishing to reclaim VAT refund on exported goods - 'export' meaning outwith the EC

http://www.hmce.gov.uk/public/vatrefunds/vatrefunds.htm
 
Jun 25th, 2004, 08:27 AM
  #5  
 
Join Date: Jan 2004
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I'm a bit confused about the VAT refund "leaving the EU" rule. Can someone clarify it for me? I'm going to England for a week, France for a week then back to England for a day before flying back to the U.S.

If I make a purchase of over 175 Euro at a store in Paris that participates in the VAT refund, am I able to get the tax back? I'll be leaving Paris and going to London via Eurostar. It looks like since I'm not leaving the EU, I'm not eligible for the VAT refund of items I purchase in Paris. However, I can probably get tax refunds of items I purchase in London (if I spend more than 30GBP at a store). Does this sound right to you?

Thanks.



JJ625 is offline  
Jun 25th, 2004, 10:14 AM
  #6  
 
Join Date: Apr 2003
Posts: 17,211
The simplest answer is to phone 0845 010 9000 when you're in the UK.

Both HMCE in the UK (www.hmce.gov.uk/forms/graphics/704-1.pdf) and la Douane (http://www.douane.gouv.fr/pvoir.asp?....htm&idsee=261) say you file the paperwork for ALL your EU purchases when you finally leave the EU.

Both sites seem, in theory, clear that you hand in the French papers to the British.

Hmmm...
flanneruk is offline  
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