How To Reclaim VAT Taxes Paid Abroad When Traveling

Traveling abroad by airplane

Many countries will reimburse you for taxes you’ve paid in their country on the way out and you can reclaim this money at the airport. It’s a matter of filling in the right paperwork and being prepared to show it to the right office before you exit the country. Countries typically refund value added taxes (VAT), which is added on to the various stages of production. This tax is usually increases the prices of goods by 15-25% and is recirculated back into the consumer cycle. Before you travel to a country you should see if they charge VAT and how much (if any of it) you can reclaim. Since most VAT is added to most consumer goods chances are you’ll pay quite a bit of it so it’s a good idea to check.

Which Countries Charge VAT?

You can find a detailed list of the countries that charge VAT by finding the specific embassy for each nation you’ll be visiting on a given trip but here are some of the common ones. All of the countries in the European Union (EU), charge VAT and let you reclaim a portion of it. Also any country in the European Community (EC) as well. Japan, South Africa, and some eastern European nations, Turkey, and Croatia also charge VAT. Those are good places to begin but you should check no matter where you are going as laws and economies change. It can’t hurt to look and you might be missing out on a nice refund for simply being negligent in doing some quick research.

What Refunds Are Available?

You can usually get a VAT refund on any good purchased but not any services rendered. You’ll need to keep all of your receipts as they’ll likely be inspected – the bigger the refund the more your papers will be scrutinized so don’t forget to hold on to the proof. The goods you purchase in a country must also be leaving the country, so any gifts or personal items coming with you. You’ll get the VAT back on those items so be sure to calculate this into your budget and purchase any items abroad that might be cheaper than back home.

How To Reclaim VAT Taxes Paid Abroad

Tourists and those on personal travel must claim their VAT taxes before they depart the country. This almost always happens at the airport in customs although some airports have separate offices dedicated to reclaiming VAT. Be sure to ask information in the airport or call ahead of time to find out exactly where you need to go. Business travelers have the option of reclaiming the their taxes and filing the paperwork from home once they’re returned from the business trip. VAT is usually only refundable for purchases over about $20 and as mentioned before, you must have your receipts handy. You’ll also want to factor in about an hour extra at the airport (or two if it’s a busy day) to have the time to get your money back and still catch your flight.

Other Ways To Save On Taxes

If you are traveling to Europe, many stores may be participating in the Tax-free Shopping Program. You will see signs near the register in most big shops in Western Europe and by showing your passport will not be charged VAT. That will save you money obviously, but time as well at the airport with one less receipt the customs officer has to inspect. There are minimum purchase requirements in most cases so ask what they are and keep the receipt if you don’t meet them to try and reclaim those VAT at the airport. You may also be able to get in touch with a local VAT recovery company – they are especially useful if you are a business traveler or spend a lot of money abroad.

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