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With the amount of VAT taxes in countries outside the United States, it can make a heckuva lot of financial sense to do some EU tax-free shopping. The European Union countries have been raising their VAT (Value-added Tax) in recent years, with most countries now 20%…or higher!
If 20-25 percent of your purchase price is going back into government coffers for the benefit of citizens – and that’s not you – why not get it back? We tried to do some tax-free shopping in Germany recently (VAT: 19 percent – low compared to Croatia’s and Sweden’s 25%, but money is money, right?). It seems so easy. But it’s not. Most governments don’t really want to give up their VAT money in a flash, so get ready for some hoop-jumping maneuvers in your quest to do tax-free shopping.
What HITT learned about EU tax-free shopping in Germany
In many countries (not just Germany), you have a choice between using an EU tax-free shopping business network or doing your tax-free shopping independently.
- With Global Blue tax-free shopping system , you simply look for the Global Blue emblem in a store’s window, do you shopping and get a Global Blue form back noting how much VAT you paid (In Germany, it’s called Mehrwertsteuer, or MwSt.). Then you are supposed to get that money back at the airport when you are leaving the European Union. The stores (allegedly) know the dance and take care of it (allegedly) efficiently and without question.
- When doing your tax-free shopping in Germany independently, you buy the goods, get a form from the store management (or take your own in – called either an Ausfuhrbescheinigung or an Ausfuhrkassenzettel … just look for the word “Ausfuhr” which indicates an export). Have it signed, stamped and dated at the store. That’s assuming the store wants to bother with this. Some smaller ones may not. So ask before finalizing a purchase if it’s a big one.
- Other services are Premier Tax Free, although it is not as widespread as Global Blue, and VatFree, where you can also find good no-nonsense information.
What you have to remember is that everybody wants their cut, so if you use a system like Global Blue or Premier, you will pay that business another significant percent. Global Blue told HI Travel Tales that the percent taken is “never” any more than 3% to 5% (not to mention an extra few Euros if you happen to want cash instead of a credit card credit). However, in our case, the VAT on one of our bills was nearly 18 Euro and we got back only 12 Euro. Eeek!! That’s a hefty fee, in terms of percent – like 30%! (And the woman at the Munich airport was appropriately grumpy and unhelpful to boot.)
Next step: getting your tax-free shopping refund in Germany
Get ready for some more hoops and a bit of leaping and jumping. Our experience was in Munich, which is a smaller, more accessible airport, meaning the distances you had to maneuver to and from offices weren’t overwhelming. At least in Germany, with your quest for tax-free shopping refunds, the concept will be similar although the offices will be in varying places.
- You must show the goods you bought and are taking out of the country. Well, at least that’s what they say. Plus, the goods you bought must be in their original packaging. Well, at least that’s what they say. So you’ll need to pack them separately or at least at the top or front of your luggage.
- Be sure you have your forms and receipts signed and organized and in hand. In Munich at least, go to the check-in counter as you normally would. Check in, as normal, BUT – and this is really REALLY important! – tell the agent you have tax-free goods. And – this is also really REALLY important! – do not let the agent check your bags with your tax-free shopping acquisitions. The agent will tag the bags, as normal, and now comes your next step….
- Leave that counter and go to the “Customs Clearance/Expert Certification” office as it was called in English in the Munich Airport (in German: Zollabfertigung/Ausfuhr) with your tagged bags, goods and paperwork.
- The agents there will (allegedly) look at your tax-free shopping goods, match them with the papers, and then do all kinds of official-sounding and official-looking stamping. Then they will take your tagged bags and check them. Including all of your tax-free shopping items. The agents in my case just shrugged and gave me a hand wave and didn’t look at my goods (they were also extremely friendly and helpful for this then-newbie). Granted, it was only a few hundred Euro worth and not thousands, when I suspect they would look, depending on the value or the product. Either way, be prepared.
Onward to tax-free refunds!
- Next, you march over to the Global Blue office in the airport, hand the folks there your forms, all stamped by customs, and they (grumpy or not) will credit the refund to your credit card (sans that horrific fee). I also had an independent/non-Global Blue tax-free-shopping form, not knowing Global Blue could not credit that, and the woman nearly threw it back at me in disgust. Now what?
- Assuming you showed those goods to customs and the form is stamped, once you get home, you send those papers to the store, which is supposed to then issue you a credit (Do make copies!). Our independent purchase was at a larger store, albeit not a chain. We shipped all the paperwork back with a letter of explanation and an account listed to wire the money into, and waited, not sure what to expect. Voila! After about six weeks, the money arrived – all of it. No fees. So of 30 Euro paid in VAT, I got 30 Euro back. Easy-peasy.
Other non-brainer EU tax-free shopping information
Of course, you’ll need the original receipt and paperwork, your passport, the products can’t be used, and your permanent residence has to be outside of the European Union. Oh, and if you go to multiple EU countries, you take care of this little dance at your last stop before leaving the EU. The EU’s official guide on tax-free shopping will also be helpful. By the way, no store is legally mandated to do tax-free selling. So please avoid stamping your foot and demanding if the shop says it can’t oblige.
Is this a big run-around? Yeah, it could be considered that, depending on how much you are getting back. Everybody will know his or her limit for doing the dance and not just gifting money to the country visited. HI Travel Tales will however do this again – especially now that we know the routine.