Are You “In The Know”? Get a portion of your VAT tax refunded


Recently on a trip to Europe, I was diligently collecting my receipts because I had heard through the grape-vine that I could have the money I spent on VAT refunded at the end of my trip.  Well, like anything in life, I hadn’t heard the full story.

After some minor disappointment and quality time with a customs agent in the UK, he handed me a brochure explaining how a VAT refund really works.

In a nut shell, if you fulfill all of the requirements, this could be worth your while.

The VAT (Value Added Tax) is attached to most things you buy in the European Community.  The only country that I have experience attempting to get a VAT refund from was the UK.   The rule of thumb that I use to determine if an item qualifies for a refund is if it’s a tangible item (ie: gorgeous leather tote bag) – yes, if it was a service provided (ie: sumptuous High Tea) – no.

According to the UK’s HM Revenue & Customs:

If you live outside the EU

If you are an overseas visitor, to qualify for a VAT refund you must:

  • live outside the EU
  • leave the UK for a destination outside the EU with the goods you have bought by the end of the third month after the month when you bought them
  • show customs officials the goods, your receipts for them and a completed VAT refund document when you leave the EU

If you live in the EU

If you live in the EU, you may be able to obtain a VAT refund if you are planning to leave the EU for at least 12 months.

You must:

  • leave the UK for a destination outside the EU – with the goods you have bought – by the end of the third month after the month when you bought them (for example, goods purchased on 3 February would have to be exported by 31 May)
  • stay outside the EU for at least 12 months
  • show customs officials the goods, your receipts for them and a completed VAT refund document when you leave the EU

If you are studying in the UK

If you’re studying in the UK, you may be able to obtain a VAT refund if you’re planning to leave the EU for at least 12 months.

You must:

  • leave the UK for a destination outside the EU – with the goods you have bought – by the end of the third month after the month when you bought them
  • stay outside the EU for at least 12 months
  • show customs officials the goods, your receipts for them and a completed VAT refund document when you leave the EU

Goods you can claim refunds for

You can obtain VAT refunds for anything on which you pay VAT in the UK apart from the following:

  • new or used cars
  • a boat you plan to sail outside the EU
  • goods worth more than £600 exported for business purposes
  • goods to be exported as freight
  • goods that need an export licence – except antiques
  • unmounted gemstones
  • bullion over 125g, 2.75 troy ounces or ten Tolas
  • mail order goods, including Internet sales
  • goods used or partly used in the EU, such as perfume
  • service charges, such as hotel expenses

If you are importing or exporting a car for personal use, see this link for more details: Motor vehicles

If you are making purchases on behalf of your business abroad, see this link for more details: International Trade / Visits

So, the next logical question would be: How do I get my VAT refund?

According to the UK’s HM Revenue & Customs:

When you purchase the goods

First, you need to choose a shop that operates the VAT Retail Export Scheme. It’s a voluntary scheme and not all shops operate it, so you need to check before you buy anything.

To obtain your VAT refund, you need one of the following documents. The shop will give you this:

  • a VAT 407 form
  • a shop or refund company’s own version of form VAT 407
  • a VAT Retail Export Scheme sales invoice

You need to fill in the form when you make your purchases, in front of the retailer. The retailer will ask to see evidence that you are eligible to use the scheme, such as your passport.

You also need to agree with the retailer how your refund will be paid. Some retailers will pay you the refund directly, others will operate through a refund company, and some will have an arrangement with a refund booth at the point where you leave the UK.

You may not get all the VAT back. The retailer and/or the refund company may make a charge to cover the cost of handling your form. If they do, this will be deducted from your refund before you receive it.

When you leave the country

If you’re travelling outside the EU, you must show your goods and your refund form to UK customs staff at the airport you’re leaving from. Make sure you arrive at the airport early so that you have plenty of time to deal with the customs staff before your departure.

If you’re travelling to another country within the EU before you finally leave the EU, then you must show your goods and refund form to customs officials in that country when you leave it.

If you are leaving the EU on a flight that stops in another EU country before leaving the EU, then you have two options:

  • if you’re taking your goods as hand baggage, then you must show them to customs officials along with your refund form in the last EU country you stop in before leaving the EU
  • if you’re checking your goods in as hold baggage, then you must show your goods and your refund form to UK customs officials before checking in

If there aren’t any customs officials at the port or airport you’re leaving from, there will be a telephone you can use to ring an official or a clearly marked customs post box in which you can leave your refund form. Customs officials will collect it from there and if they are satisfied that all requirements have been met, they will contact the retailer to arrange your VAT refund.

Once your form has been approved by customs officials, you can then obtain your refund in the way you agreed with the retailer when you made the purchase. You will use one of these methods:

  • post the form back to the retailer to arrange payment of the refund
  • post the form back to a commercial refund company to arrange payment of the refund
  • hand your form to a refund booth to get paid immediately

There may be a charge to cover the cost of handling your refund. This charge will be shown on your refund form.

What’s your take on the VAT refund process?  Do you even bother?  Would love to hear the good, the bad, and the ugly… 

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