If you’re headed to Europe this year on a river cruise — and we know you are — you’ll most likely be buying either souvenirs of your journey for yourself or loved ones. That means that before your journey is over, you’ll get to experience the wonder that is the tax rebate process.
As long as you reside outside of the country you are visiting, you qualify for a refund of the tax, or VAT (Value Added Tax) added to your purchases. But doing so will require some careful preparation and planning on your part. In fact, each country has its own requirements that specify how much you have to spend in order to claim back the VAT. For example, the minimum purchase requirement in Switzerland in order to claim back VAT is more than US$200.
VAT rates between countries also fluctuate; for example, Switzerland charges just 8 percent VAT, while Norway has 25 percent.
Complicating the matter is that minimum purchase amounts typically apply to a single transaction only, meaning you can’t group all of your purchases together in order to meet the requirements.
Here’s where it gets really tricky: Say you’re flying from Budapest to Frankfurt, where you will connect with your transatlantic flight home. Typically, taxes will only be refunded from the last point of your journey in the EU which, in this case, is Frankfurt. That can be difficult to do with airline connection times. Also, in many cases, items you want to claim had better be in your carry-on baggage. You may not be refunded for things you can’t physically present.
Here’s what the British Embassy in Washington has to say about claiming your VAT refund from the UK:
Visitors applying for a refund should be aware that a VAT refund voucher must be presented for certification with the purchased goods to Customs and Excise when the customer departs from the European Union. Forms cannot be certified after departure from the EU. It should also be remembered that since VAT of 17.5% is included in the total price paid for the merchandise, approximately 14.9% of the total is the amount of VAT actually paid, and from this the retailer or refunding company will subtract a fee for processing the refund.
If you had to read that a few times, don’t worry: you’re not alone. The language is purposefully verbose. It means, essentially, don’t expect to recoup the full cost of the VAT.
We keep saying “typically” throughout this article because we’ve met people who claim to have had luck getting their refunds processed before embarking on their transoceanic journeys home, regardless of any remaining connections in the EU. We’ve also met folks who have claimed to have received refunds for items that were tucked away in their suitcases as they were being transferred from one airplane to another.
But we have also met countless people who have filled out the forms and kept the receipts, only to be denied the refund because the items weren’t physically present, or they were in use — like a pair of shoes, an expensive hat, or a piece of luggage. If you’re wearing it or using it, some officials will deny the refund.
The bottom line: Keep your receipts, fill out the necessary forms, and keep your purchases with you. For those who make expensive purchases abroad, it can be well worth your time to recover the VAT, no matter how complicated the process can be.