Over a long trip with a lot of shopping excursions, VAT taxes can add up to more than just loose change.
Keep track of whether you’ll qualify for a value-added tax (VAT) refund. Many nations outside the U.S. impose a VAT on goods and services. Some of them, particularly those belonging to the European Common Market, offer refunds to foreign purchasers. Keep in mind that the minimum amount for purchases to qualify for refunds will vary form country to country. For example, the minimum can range from $25 USD in Sweden to $340 USD in Switzerland. Merchants in each country are well versed in which purchases qualify for VAT refunds.
If a purchase qualifies for the VAT refund, you must ask for a form at the point of sale. This form needs to be stamped at the airport customs office in the country of purchase before you leave for the U.S. Time permitting, and if the refund office is open, it may be possible to get a refund at the airport. More often, you will be required to mail the stamped form in the specially marked envelope back to the VAT office listed on the form.
The refund will take 6-8 weeks for processing. The refund will be made in the same form as the purchase, that is, purchases made by credit card will be refunded to the credit card, and cash purchases will be refunded by a check made out in the currency of the issuing office. Please note that U.S. banks charge fees to cash foreign checks. Unless the refund is significant, this extra time and effort, along with unfavorable currency fluctuations, may actually result in the VAT refund costing you money. It is recommended that major purchases be paid by credit card.
If you wish to apply for the refund, be sure to allow extra time at the airport.
Countries that offer VAT/GST refunds
(Source: World Travel & Tourism Tax Policy Center at Michigan State University)
EC countries
- Austria
- Belgium
- Denmark
- Finland
- France
- Germany
- Greece
- Ireland
- Italy
- Luxembourg
- Monaco
- Netherlands
- Portugal
- Spain
- Sweden
- United Kingdom
Other European countries
- Croatia
- Czech Republic
- Estonia
- Hungary
- Iceland
- Liechtenstein
- Luxembourg
- Norway
- Slovenia
- Switzerland
- Asia
- Japan
- South Korea
- Turkey
Africa
- South Africa
North America
- Canada (known as GST – Goods & Services Tax – but essentially the same as other countries’ VAT taxes)
More Useful Resources on VAT/GST Taxes
- The World Travel & Tourism Tax Policy Center at Michigan State University has a useful explanation of what VAT is and how it works.
- Exhaustive table of VAT Duties by Country provided by USCIB (the United States Council for International Business).
- Reid’s Guides and Rick Steves’ Europe both have useful articles on handling VAT refunds. The Rick Steves article includes a useful table showing by country the minimum amount you must spend to quality for a VAT refund.
