EU heavily advertises that you will get VAT refund if you shop in the EU and go back within a stipulated period (my understanding is that it is 21 days but I have also seen durations as long as 3 months). However, there are many nuances and following are few things I learnt when I went to the EU.
- Most of the stores but not all stores participate in EU Tax free program. Just ask and most of the stores that are popular with shoppers will support.
- VAT is 21% on clothes and everything else you will buy.
However, you will get not 21% refund. Each store partners with third party agencies like Planet or Global Blue and they charge. They charge a service fee and it is hefty (ex – if you are getting a refund of 25 euros, they will charge somewhere around 9 euros which is a more than 30% of the refund you could get). This should set your expectations right.
- Different people say different things about whether you can use the product before exiting EU (example – you bought a dress and want to use it while in EU). I asked a tax free staff and she said you can use it. Online documentation says you can’t. I am not certain of this information any more.
- Always, I mean always check if the tax free services are before you check-in or after you check-in. Barcelona for example had tax free counter after check-in (I am not sure if there was one outside also or not) and Paris had tax-free counter before you check-in.
- EU tries really hard to not give the refund to you. First, there is hefty service fee. Second, there is very poor documentation of process to be followed is available. Third, there is different information available on different sites to confuse you further. What I understand is that the steps are following.
- Buy goods and tell them that you need tax free billing. You must have your passport with you. If you shop online, you are out of luck as I don’t see how you will pass the information of your passport to e-tailer.
- You will get a tax free refund receipt from the store. The store receipt will tell you which third party is the processor (typically Global Blue or Planet)
- Next step is to visit kiosk of Global Blue or Planet and process the refund. You will get a receipt. You need to take the bill and your passport for this task and your credit card on which refund is to be processed (I use the same card for purchase and refunds to avoid any kind of confusion or complication). You have option to get refund in cash or back to the card.
- Next step is to visit the airport counter where you will get a customs stamp on your refunds. I am not sure if the above step of visiting kiosk of third party is mandatory or you can do everything here itself.
- If you want to get cash refunds, then you can now visit the tax refund counter to get cash. You will have to show bills that are stamped by the customs officer. This counter could be inside the airport after the security checks.
Overall, it’s a messy process but if you are shopping enough to make it worth the hassle, go for it.