Getting the VAT Back

How to get the VAT (European taxes) on your souvenir purchases refunded

Look for the "Tax Free Shopping for Tourists" sign in stores and the process of getting the VAT tax refunded will be much simpler and smoother.

OK, first the bad news. Unlike in America, where sales tax is (mostly) a state-by-state phenomenon that gets added on at the cash register, in Europe

sales tax is included in the price tag

.

That is nice, in that there's no math to do in your head, but it's awful for two reasons. One is that the tax rate—universally called

VAT (for "Value Added Tax")

though each country also has its own acronym—tends to be anywhere

from 7% to 33%

. (The E.U. is supposed to eventually settle on a common rate of around 18%, but it's already years past the original implementation date of that plan.)

The other bummer is that you end up paying this VAT automatically, even though,

as a tourist, you are not obligated to pay the VAT

.

Now the good news. Since non-E.U. residents technically do not owe VAT, a system has been set up to

refund

these ill-gotten taxes to you. Now for some more bad news, the refund system doesn't kick in it unless you drop a big chunk of change all at once in one store.

This amount ranges from as low as $80 in Belgium to around $200 in France or Italy (and its always the amount before taxes are counted). The actual amounts in each country—as well as lots of VAT shopping advice—are listed at the website of

Global Refund

(www.globalrefund.com). There also lots of good, straightforward advice (specific to Italy, but appicable to many countries) on the English-language pages of the

Italian Customs Bureau

site (www.agenziadogane.it)

Getting that refund

Getting the VAT refunded involves telling the store clerk you're going to be asking for the VAT back (they'll give you

receipts and forms

to carry with you) then filling out more forms at the airport.

Note that you

redeem the receipts when you are getting ready to leave the last E.U. country on your itinerary

(in this case, "E.U. country" means all of Western Europe except Switzerland, Norway, and Iceland; and all of Eastern Europe minus Bulgaria, Romania, and Turkey—the latter three are up for membership). That means bring all your receipts for every E.U. country to the airport from which you depart; so if you're flying home from Paris, you can take your Italian, German, and French receipts to the customs agent at Charles de Gaulle airport.

Before you even check in for your flight, you must

visit the local Customs office at the airport

with the receipts and the items you purchased—this is in case the officer wishes to inspect your purchases (which rarely happens). The Customs agent will stamp your receipt and give you further directions—usually, after going through check in and security, you head to another VAT refund desk inside the airport and deal with more paperwork there.

In some cases, they give you a refund on the spot. More often, the stamped receipt is sent back to the store and your reimbursement is credited against your credit card or sent to you by check. Either, way, it can take forever. The longest I've ever waited was 18 months for a few bucks back from some Irish Sweaters.

There are two ways around all this effort.

Many shops are now part of the "Tax Free Shopping" network

(look for a sticker in the store window). These shops issue a check along with your invoice, which, after you have the invoice stamped at customs, you can redeem for cash directly at the Tax Free booth in the airport (usually near customs or the duty-free shop), or you can mail it back to the store in the envelope provided within 60 days for your refund. In some cases, the store takes care of all the hard work—you fill out the form on the spot and they mail it back, then reimburse your credit card.

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