Love it or loathe it but you cannot avoid it. We mean travel shopping. Whether budgeted separately or not, shopping always takes up a large chunk of the holiday fund. And why not! After all, you have travelled miles and hours to this dream destination and taking back a few gifts and memories is absolutely called for.
But sometimes it goes beyond just souvenirs, especially when you travel to Europe. That limited edition bag or the ‘Made in Spain’ shirts, Europe nearly spoils you for choice. With the likes of London, Milan, Paris and Berlin one cannot help splurging on the exclusive fashion brands, collectible art, and hand made luxuries at the fashion capitals of the world. But what if we told you there is a way to earn a flat discount on all your large purchases without even asking for it on your special buys?
Read more to find out the secret to reducing your shopping bill by a whopping 15% (and no we are not talking about Bragpacker‘s offers – we think 15% is too lame a discount)
While it is not really a secret, it is certainly a less-talked about and much less understood. So, most countries levy various taxes on goods and services. In Europe, you’ll find that many goods and services charge VAT (Value Added Tax) ranging from 15-25%. However, this tax is payable only by the residents of that country and as a tourist you can actually claim it back. Travelers are typically entitled to a refund for the VAT portion of prices for goods in most European countries. Making sure you claim it back can help you save the 15% you paid at the time of purchase and with multiple purchases it can be a good deal.
Now that you know why you save here’s all you need to know about how to save it.
At the Store:
At the time of purchase ask the shop assistant whether they provide this service. At check-out, the shop assistant will ask you to provide proof that you are a visitor to the EU and make you fill in a form. (Some shops may ask for your return ticket to ensure you will be leaving EU within the required time). Once the formalities in the shop are complete you will be asked to get the invoice stamped by a customs agent. You can then claim your VAT refund at airports. Some shops may need you to send the refund form to them to process the refund, so make sure to understand their process before buying.
Look and shop at stores that have a “Tax Free” or similar sign which means you can refund the tax they charge you. Big department stores often have special VAT offices. But street vendors, sidewalk artists, and goods from the thrift stores or flea markets don’t qualify. Make sure to complete the paperwork at the time of purchase or before you leave the store. In most cases, they will only ask for your passport to make sure you are a tourist.
At the Airport:
Arrive at the airport early – accounting for atleast 30 min of extra time to get the process done. Anyone who has attempted a VAT refund will tell you that it is not easy to get done. Most do it at the airport at the time of departure from the country. Finding the VAT refund counter can be a challenge in itself. So do your research before hand for the airport.
Many officials will ask to see the products bought before they approve the refund. So try and get the refund processed before you check in your bags!
If you are unsuccessful in getting your application approved at the airport, fret not. EU countries allow you to file for it later through post and they will refund your credit card. But we would not recommend this method as it can be very unreliable.
Here are a few other pointers to bear in mind before you head to Europe.
- VAT is the English-language term; but in some countries it can be disguised with terms like IVA, TVA, moms, MwST, and a handful of unique local terms. EU (much of Western Europe) rules require that member countries impose a VAT of at least 15%; most rates are in the range of 19-25%.
- VAT rates in Europe’s some non-EU countries are as follows: 25.5% in Iceland, 25% in Norway, 8% in Switzerland, and 18% in Turkey. The VAT rate is the amount added to a pre tax base price, not a percentage of the final price. Thus, a 20% VAT rate amounts to 16.7% of the purchase price.
- To qualify for a refund, the goods must be new and unused. So make sure you don’t use that Louis Vuitton bag from Paris until you leave the EU.
- The main bummer here is that not all shopping qualifies – you need to have a bill with a minimum threshold for it to qualify for a VAT refund. This minimum ranges from zero in Ireland, Germany, and the U.K. to CHF 300 (about $333 USD) in Switzerland, €175 (about $237) in France, €155 (about $210) in Italy, €125 (about $169) in Belgium, and €90 (about $122) in Spain.
Ofcourse, you can avoid all this hassle by simply shopping at the airport duty free stores, usually located after the departure formalities at major international airports. The post-customs areas of many big European airports are now more like upscale shopping malls than airports, so make the most of it.
Most importantly (ofcourse), with Bragpacker, you can get a completely hassle free 90% off on all your pre-travel shopping, with our premium products to Rent 🙂