The perk of a non-EU citizen (UK Included) — Learn the ins and outs of tax-free purchasing here!
trade-off your expensive visa fees with one such initiative, the VAT return programme, or the tax-free programme for tourists.
What is a tax refund? Who is eligible?
A VAT return is available to anyone whose main home is outside the European Union. All non-EU citizen buyers can get a VAT refund on anything they buy in the EU and bring back to their home country in their luggage.
As Per the French Directorate General of Customs and Indirect Taxes (DGDDI), individuals who call another country their home or are habitually residing outside of France or any other European Union Member State can relish a unique benefit while making purchases in France. Yes, you read that right—they can enjoy a refund of the value-added tax (VAT) or abstain from paying it all together while buying goods that are destined for export.
Imagine you are a globetrotter exploring the picturesque cities of France, from the bustling streets of Paris to the serene vineyards of Bordeaux. As you immerse yourself in the local culture and indulge in some retail therapy, you spot a charming piece of art or an exquisite designer dress that you simply cannot resist. But as a non-resident of France or any other EU Member State, you may be wondering if you will have to pay the VAT, which could potentially put a dent in your travel budget.
Well, fear not! Thanks to the DGDDI, you can savour your purchases with a refund of the VAT or avoid paying it altogether, as long as the goods are intended for export. So, whether it’s a stunning painting, a chic piece of clothing, or a bottle of French champagne to commemorate your trip, you can take it home without worrying about the extra tax burden.
So, next time you are on a shopping spree in France or any other European Union country, remember to ask the merchant about the VAT refund process, and relish your souvenirs with a lighter wallet!
What do you have to do to get a VAT refund?
Claiming a VAT refund on your purchases can be a terrific way to save money, but you must first understand the rules that must be followed. Here are some crucial points to remember:
First, you must be a non-EU resident to be eligible for a VAT refund. Your nationality makes no difference as long as you do not reside in any of the EU countries.
Is there a threshold for each purchase?
According to the European Commission, the answer is yes. When it comes to shopping in the EU, you may wonder if there’s a minimum amount you need to spend in order to be eligible for a VAT refund. Well, the good news is that there is a threshold, but the even better news is that it’s set pretty high at EUR 175 (or the equivalent in non-euro currency). This means that you can shop to your heart’s content without worrying about the small stuff.
However, keep in mind that some EU countries may set lower thresholds, so it’s always a good idea to check before making a purchase. The reason for the minimum threshold is to avoid the hassle of paperwork and administrative duties for small-value items, so it’s a win-win situation for both the shoppers and the authorities. So go ahead and treat yourself to that luxury handbag or designer watch, knowing that you won’t have to worry about meeting a minimum spend to claim your VAT refund.
Second, each EU member state has a minimum purchase threshold that must be met to qualify for a VAT refund. This means that, depending on the country’s restrictions, you must spend a particular amount of money in one store, on one day, or across all purchases made during your visit.
Third, to be eligible for a VAT refund, you must leave the EU before the end of the third month following the month of your purchase. It’s worth noting that some nations, like France, have extra criteria for your stay in the EU to be less than six months.
Finally, you must take all acquired products from the EU to obtain a VAT refund. These items must be unused and in their original packing while exiting the EU to be eligible for a refund.
Assume you are a non-EU resident visiting Europe on vacation. You decide to go shopping and come across a stunning outfit in a store that you must have. You examine the price tag and see that it exceeds the minimum purchase threshold for the VAT refund in that country, so you decide to purchase it.
You must, however, keep in mind that you must leave the EU before the end of the third month after the month of your purchase, and you must take the dress with you. This implies that you must be careful to leave it in your hotel room and at the airport; otherwise, you will be unable to claim the VAT refund.
In summary, getting a VAT refund can be a terrific way to save money while shopping in Europe, but you must first understand the rules that must be followed.
There are two ways to shop tax-free in the European Union.
According to the French Chamber of Commerce in the United Kingdom,
- The traditional approach allows merchants to provide a VAT refund in partnership with a “tax-refund operator.” It is crucial to note, however, that not all store owners are required to provide VAT refunds.
- The second system, ZappTax, is available while shopping in France, Belgium, or Spain. This technology makes it easier for shoppers to shop tax-free by simplifying the VAT refund process. The optional sources would be through Global Blue, Innova, and Planet Payment.
<<23 May update for Valencia Tax-Free Procedure with DIVA>>
In Spain, the entire VAT refund process for travellers is digital through the DIVA system:
When making purchases, ask the seller for the tax-free electronic form (“electronic refund document”).
When you leave Spain, and always before checking in your luggage, you must electronically validate the electronic documents for reimbursement of purchases. To do this, you must go to the DIVA screens located in the airport check-in areas.
Remember to always bring :
- Passport.
- Purchase invoices and the DIVA form.
- The goods for which you request the return. Without merchandise, there is no seal.
- Boarding pass or travel ticket.
Operation of DIVA screens
- Select the language.
- Scan the barcode on the form in the optical reader.
- The system can give two results:
- The DIVA tax-free form is sealed. The processing has finished.
The DIVA tax-free form cannot be validated. In this case, you will have to go to the Civil Guard invoice visa office located next to the screens.
No physical document is received with the result of the validation. You can find out the status of the processing by consulting the CSV number (secure verification code) that appears on the form at the address: https://www.agenciatributaria.gob.es/AEAT.sede/tramitacion/ZZ05. shtml
Once the validation of the screen or the office is confirmed, you can obtain the refund directly at the tax-free offices located in the boarding areas.
Requirements to request a VAT refund
Have habitual residence outside the European Union (or in the Canary Islands, Ceuta, or Melilla).
The purchases made must be of a personal nature, that is, without commercial purposes.
It is necessary to leave the European Union within three months of purchase.
References
- French Chamber of Great Britain
- Taxation and Customs Union
- VAT Refunds | Valencia Airport | Aena. (n.d.). https://www.aena.es/en/valencia/airports-services/categories/vat-refund.html#invoicestamping
