The percentage of VAT varies from country to country, between 8% and 25% of the cost of goods. As a traveler, you are entitled to a refund on VAT or VAT recoverable for the merchandise that you buy from another country. You should find out the regulations of the country you visit since this does not apply to all countries. Here is more you should know.
The basis for VAT recoverable is that the goods are exports. These goods include; watches, bags, shoes, cosmetics and more. For travelers to the European Union for example, you must be a resident of a country outside the EU to qualify.
Your goods must leave the EU by the end of the third month from the date of purchase. For example, if John from Ghana buys designer shoes in Paris on 15th March, his shoes must leave the EU by 30th June. Your passport, invoices and receipts must be presented to customs for validation. Your refund document must be stamped. The goods must be in original packaging and unused.
In Japan, if consumables and non-consumables are combined, the goods must leave the country within 30 days. The refund must be claimed on the same day and from the same store of purchase.
You Will Not Get A Refund if
- You do not have all the necessary paperwork and stamp.
- You shop online. Online purchases do not qualify you for a refund.
- Your items are below the threshold. Each country store and product have a minimum price below which you will not recover any tax. In Ireland the minimum is zero. While in Belgium it is 122 US dollars.
- You buy your items from sidewalks and street vendors. You can only claim if your purchases are from a store that handles VAT refund documentation.
Despite some travelers following the correct procedure for recovery, they have not received payment. Sometimes the customs official is unavailable and other times, the relevant authorities are non-responsive. This is frustrating. However, check out the next point…
Let the Experts Handle Your VAT Recoverable
Companies equipped to handle your VAT recoverable exist. Compared to the headache of red tape you will encounter on your own, they are a viable option. Some companies will ask that you give them your documents and they will refund you immediately after review.
According to Business Travel News, businesses leave billions of dollars in unclaimed tax on the table every year. Outsourcing this time-consuming process of recovery is a no brainer for business travelers and individual travelers.
Travel writer Rick Steves says that only you can decide if VAT recovery is worth the trouble. Now that you know how to recover VAT when you travel, take the measures given above and stop leaving money behind.