Guide to VAT refund for visitors to the EU

If you are a visitor to the EU and are about to leave EU territory to go home or to some other place outside the EU, you may be able to buy goods free of VAT.

“Tax-free” shopping: who is a ‘visitor’?

A ‘visitor’ is any person who permanently or habitually lives in a country outside the EU. Your address as shown in your passport or other identity document will be taken as the place where you permanently or habitually live.

Example: Axat lives and works in India but spends three months every summer in Spain, where he has a time-share in a villa. Axat’s permanent address is in India, so he is a ‘visitor’ to the EU while in Spain.

In some countries, you may also qualify as a ‘visitor’ if you are living in an EU country for a defined period of time for a specific purpose, but your permanent home is outside the EU and you are not intending to return to the EU in the immediate future. EU citizens permanently living in non-EU countries are also eligible for the VAT refund.

Example: Paul is a Belgian citizen but lives permanently in Canada. Once a year, he returns to Belgium to visit his parents. Paul is a ‘visitor’ and can apply for a refund on a basis of his Canadian residence card.

‘Tax-free’ shopping: how is the VAT refunded?

Can’t I just pay the VAT-free price in the shop?

No. You must pay the full, VAT-inclusive price for the goods in the shop; you will get the VAT refunded once you have complied with the formalities and can show proof of export.

  • When you are in the shop, ask the shop assistant in advance whether they provide this service.
  • Ask the shop assistant what threshold applies to the purchase in order to be eligible for a refund.
  • At the check-out, the shop assistant will ask you to provide proof that you are a visitor to the EU. You will need to show your passport or other identity document proving your residence outside the EU.
  • The shop assistant will ask you to fill in a form with the necessary details. You may be asked to show your ticket as proof you are leaving the EU within the required time. The shop assistant will fill in the shop’s part of the form.
  • Make sure you understand exactly what you need to do and how you receive the refund. In some cases, the shop itself will refund you. In other cases, the shop will use a third party to organize the refunds on its behalf.
  • Make sure you understand whether the shop takes an administrative fee for this service (which will be later deducted from the refunded amount) and if so what is the fee.
  • You will receive an invoice for the goods. You must show the invoice, the refund form, the goods and any other necessary documents to the customs officers of the last EU country you leave. The customs officers must stamp the form as proof of export. Without the stamp, you will not obtain the refund.
  • You must then follow the steps explained at your refund document or by the shop assistant. You can claim your VAT refund in bigger airports immediately, otherwise you will have to send the refund form to the address given in the shop.

Will I get all the VAT refunded?

This is unlikely. In the great majority of cases, there will be an administrative charge for the service. Make sure you find out how much you will be charged when still in the shop.

Can someone else go to the shop for me?

No. You must be there in person in order to make a VAT-free purchase, although you do not have to pay for the goods yourself.

Will I have to wait until I am home to receive the refund?

Not necessarily. In some larger ports and airports, you may be able to obtain a refund straight away once the customs officers have stamped your form, provided the shop in which you bought the goods uses this facility.

Where can I complain if I did not receive the refund?

You can complain to the company in which you bought the goods because this company has a principal responsibility to give the refund. If however that company used an intermediary you may first apply to the intermediary. European Commission does not intervene in particular cases of VAT refund to foreign visitors. ‘Tax-free shopping’: tax-free shops and qualifying goods

Can I buy goods VAT-free from any shop?

No. Shops do not have to offer a VAT-free facility. Those that choose to do so must make the appropriate arrangements with the tax authorities.

How shall I know whether a shop is a VAT-free shop?

The shop will usually display a prominent sign in the window, advertising that it is a ‘tax-free’ or ‘VAT-free’ shop. This may of course be in the local language.

Can all goods be bought VAT-free?

No. There are some goods that do not qualify. The facility is intended for goods that could in principle be carried in personal luggage. Goods that have to be exported as freight, for example, and cars and yachts are excluded. Some countries may also exclude other categories of goods.

Is there a threshold on each purchase?

To avoid administrative burdens over small-value items, there is a minimum value of EUR 175 (or the equivalent in national currency outside the euro zone) for the total purchase, but EU countries may set lower thresholds. The threshold applies to the total amount of goods bought in a certain shop. Normally, you cannot accumulate purchases in different shops to reach the threshold. You will receive a separate form in each shop in which you buy goods.

How soon do the goods have to leave the EU?

The goods you buy VAT-free must leave the EU by the end of the third month after that in which you buy them.

Example Bruce, who lives in Canada, has been on holiday in Italy for two weeks. He buys a designer suit from a VAT-free shop on 10 September. The suit must leave EU territory no later than 31 December.

Do I need to take the goods with me when I leave the EU?

Yes. The goods must accompany you when you leave the EU. You cannot buy VAT-free goods if for any reason, you cannot or do not wish to take the goods with you when leaving the EU. Moreover, you have to be ready to demonstrate those goods to the customs officer who will stamp your VAT refund form.

Do I have to leave the EU straight away from the country where I purchased goods?

No. You can buy VAT-free goods even if you are going to be visiting other EU countries before you finally return home, as long as you actually leave the EU with the goods within the time limit. You have to get your documents stamped by a customs officer at the point of exit of the EU – not necessary in the same EU country where you bought it.

Be careful if you leave the EU by train!

You may be able to get the VAT refund documents stamped at certain train stations of the departure. However, you might as well need to get off the train at the last station within the EU to get this stamp. Other methods could also apply (e.g. a customs officer might be boarding the train).

What if I did not get a stamp?

In principle, the stamped VAT refund document is obligatory for VAT refund. Contact the entity in which you bought goods for the information whether they would accept other documents as a proof that the goods were exported in a due time and give you a refund.

Whom should I contact for questions related to my refund?

Your primary contact is the supplier / VAT refund agent mentioned in your VAT refund documents. If you have questions on VAT refund rules applicable in a particular EU country, contact national tax authorities. For questions on customs arrangements at a particular border, contact national customs authorities.


Author Bio

Qualification: Post Graduate
Company: Prudential Plc
Location: Mumbai, Maharashtra, IN
Member Since: 12 Sep 2017 | Total Posts: 2
My name is Axat Rathi, currently working with Prudential in Mumbai as an International Tax Consultant. View Full Profile

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November 2022