What A VAT Refund Means And How To Claim One, Per Rick Steves

You can't visit Europe without doing at least a little shopping. From local artisans and craftspeople to luxury stores offering items than you can't get in the United States, some travelers take their European vacation for that purpose alone. However, if you're planning to spend some cash in the European Union, you should know about VAT refunds and how to get them. Travel pro Rick Steves has some valuable advice that may end up giving you a significant refund from your trip. 

If you're not familiar, VAT is the European Union's value-added tax, and it ranges from 8 to 27%, depending on the EU country where you're shopping. Basically, when you shop, you'll pay the tax, but as a visitor to the EU, you're entitled to get it back — with a few caveats. On his website, Steves explains, "The process is fairly easy: Bring your passport along on your shopping trip (a photo of your passport should work), get the necessary documents from the retailer, and file your paperwork at the airport, port, or border when you leave."

However, it's not for everything. You can't get a VAT refund on things like hotels, food, tour guides, alcohol, or tobacco. What you buy has to be new and unused, and you may have to present the items to confirm that. There are minimum purchase amounts that vary by country, and some countries have different rules about what items actually qualify. It applies to a single purchase at a single store, so you can't combine multiple transactions or purchases from different places. Steves recommends doing your research on each country's VAT restrictions on Global Blue before your trip.

Do some planning, because the minimum purchase at a single store in France is more than 100 euros(almost $120). When you're ready to buy, ask the store if they participate, as they don't have to. Have your passport with you, and ask the merchant for the VAT refund paperwork. Some places will refund you on site (though you still have to present the paperwork when you leave the country). They have to fill out the paperwork and sign it. Keep your receipt with it. Ask for another receipt if you need it to declare at U.S. customs later on. 

When you get to the airport (or train station), before you leave the EU, you'll look for a VAT counter. It may be labeled Global Blue, Planet, or Moneycorp — check the airport or train station website, as some train stations may not have one. Present your completed paperwork and your passport. (It may also be at a currency exchange, but don't change money there as it's a waste.) You may have to show the items, so do this before checking your bags. Leave around two hours for the process. You'll mail it from there or from home. This must be done within three months of the purchase. 

The refund will be in cash, or credited to your card, with a small fee. (Cash has a higher fee, but you get it faster.) If this seems like too much trouble, Rick Steves does say the most important thing you can shop for in Europe are memories and experiences. Finally, if you want to save money by shopping for luxury items at the duty-free shop in the airport, check out our guide to what's worth it and what's not.