Vat refund how does it work

A few countries also exempt certain regions from VAT or apply reduced rates because of quasi-independent status or to encourage economic development. Keep in mind that the VAT rate is the amount added to a pretax base price, not a percentage of the final price.

As a practical matter, merchandise prices you see in stores almost always include VAT. So do posted hotel rates and restaurant prices. The general rule is that what you see is what you pay. Also, some localities impose the equivalent of sales taxes, in addition to VAT, on hotel accommodations, but they do not include these in the posted price; these additional taxes are usually quite low.

Most European countries allow you to recover VAT when you "export" an item. But you must prove that the goods actually left the taxing authority before collecting your refund. If you leave by plane, you have to show the goods after you pass through the customs formalities. To qualify for a refund, the goods must be new and unused. If you buy some high-fashion accessories in Paris, for example, you shouldn't use them until you leave the EU.

Many countries establish a minimum price per item or daily value per store to qualify for a VAT refund. This minimum ranges from zero in Ireland, Germany, and the U. Buy from stores that handle VAT-refund paperwork. Most stores that do this post a "Tax Free" or similar sign somewhere on a door or window; big department stores often have special VAT offices. On the other hand, street vendors, sidewalk artists, many small-town stores, and such generally don't provide this service, so you're out of luck when you buy from them.

At your point of departure, find the local customs office, and be prepared to stand in line. Some customs offices are positioned before airport security; confirm the customs location before going through the security check.

In smaller airports, train stations, ports, and less-trafficked border crossings, finding the right customs agent can be tough — give yourself plenty of time. At customs, an export officer will stamp your documents and may ask you to present your unused goods to verify that you are, indeed, exporting your purchase — if your purchases are inside your checked luggage, stop by customs before you check it.

Some retailers, particularly those in Scandinavia, will staple and seal the shopping bag to keep you from cheating. Collect the cash — sooner or later. Once you get your form stamped by customs, you have to turn it in. If your purchases were bought from a merchant who works with a refund service such as Global Blue or Planet , find their offices inside the airport. These services take a cut of your refund about 4 percent , but save you further fuss and delay. Present your stamped document, and they'll likely give you your refund in cash, right then and there.

The refund will be in the currency of the country from which you depart; if you want to be reimbursed in a different currency, such as US dollars, you'll be subjected to their unfavorable exchange rates. Otherwise, they'll credit the refund to your credit card. Other refund services may require you to mail the documents — either from home, or more quickly, just before leaving the country using a postage-free, preaddressed envelope — just drop it in a mailbox after getting your customs stamp.

Then you wait. It could take months. Look for a refund on your credit-card statement or for a check in the mail. Note that in order to be eligible for a tax refund, the goods you purchased must be new and unused. It takes about 3 weeks for your VAT refund to be paid back to your bank account. If you request a cash refund at the airport, you should get it immediately. Payments by cheques also take about 3 weeks to be processed.

Just make sure to keep proof of this VAT repayment in case the authorities need one. At best, you can get a refund directly from the merchant, if they do offer this service. Expect some additional paperwork in the store if you opt for that option. Alternatively, you could ask the merchant to ship the items directly to your home, but in most cases, this is not financially beneficial for you.

You will indeed have to pay shipping costs along with US duty. The only way to avoid paying the VAT is to purchase goods at a duty free store, which you rarely find anywhere else than at an international airport.

It depends. If you only made a few purchases and are going after the economical advantage, it really depends. You must have your VAT refund forms stamped by customs, either during your journey or at the border crossing station at the EU exit point. You must have your VAT refund forms stamped by the customs office at the final port or road exit point in the European Union.

After an inspection, the customs office of the Member State will stamp and return your forms. Retailers may also refund the VAT at the time of purchase, but this does not exempt you from carrying out the procedures described above.

However, if your VAT refund form issued in France was not stamped by French Customs upon your departure from the European Union for reasons attributable to French Customs, you may request retroactive certification of the form from the customs office with territorial jurisdiction. If you make purchases in France but leave the European Union from another Member State, requests for regularisation should be sent to:.

You must include the elements listed above with your request. These are the primary grounds for refusal , but this list is not exhaustive. One of the above-mentioned grounds is enough for customs to refuse to stamp your VAT refund form.

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