If you’re holidaying in Europe, you can apply for a value-added tax refund on your souvenir purchases there. It’s fast and free, and most travellers leave that money on the table. There are certain restrictions, but the paperwork can be worth it.
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To qualify, your purchase has to be above a certain amount, ranging from around $30 to several hundred dollars, depending on the country (except in Ireland, there’s no minimum there). You also have to shop in one place for each refund request: you can’t add up multiple items from different places to meet the minimum, or submit them all together.
To get your refund, you’ll need to bring your passport when you go shopping, and request the retailer fill out a “tax-free” form. Retailers that participate usually have “tax free” stickers in the window, and almost any shop that caters to tourists will know how this works. That means it’s great if you’re shopping in touristy spots, but not a great idea if you’re striking it out on your own or visiting smaller destinations. Then you’ll need to bring your paperwork and purchases to your next border crossing, present them to customs for a stamp, and either submit your documents at the airport or mail them in for your refund check.
It can definitely be a hassle, but it’s worth it if you’re making big purchases abroad, like leather goods, artwork, furniture, wine or other luxury (or just expensive) items. Be careful, you can’t use your goods before claiming the refund (technically the refund is for exported goods), so don’t wear that leather jacket just yet! The minimum and claim period vary by country, so do your research before your trip (check out the European Commission’s site). For a step-by-step walkthrough, check out Rick Steves’ full guide below.
How to Claim VAT Refunds [Rick Steves]