A VAT Refund Could Save You Hundreds While Shopping Abroad

As a drinks and travel journalist, I’ve been fortunate to see a lot of the world and collect experiences that range from unforgettable to downright surreal. But one thing those trips rarely include? Shopping. My itineraries are typically packed with tastings, tours, and tightly scheduled to-dos, leaving little room for leisurely strolls down local shopping streets or spontaneous splurges.

However, on a recent girls trip to Amsterdam, the shopping bug hit. The city has some amazing luxury stores, as well as one-of-a-kind shops selling eco-friendly, handcrafted pieces with meaningful backstories. It was on this trip that getting a VAT (Value Added Tax) refund became a reality for me. While it had always been on my radar, I had never spent enough money—or had enough airport time—to collect.

It turns out the VAT refund process is a bit more complicated than one might expect, even for a seasoned traveler. The idea of getting money back on purchases made abroad sounds simple enough, but the rules, paperwork, and timelines vary by country and can quickly become confusing. So I reached out to a few experts to navigate the process.

What is VAT?

At its simplest, VAT is a consumption tax built into the price of goods across the European Union. Unlike U.S. sales tax, which is added at the register, VAT is included in the sticker price and collected at every stage of production.

“VAT works as a tax on consumption that is applied throughout the supply chain,” explains Kateřina Horáková, a spokesperson for the European Commission. “Each VAT-registered trader charges VAT on their sales and deducts the VAT they have already paid on their purchases, remitting the difference to their national tax authority. This system avoids double taxation and ensures tax is paid only on the value added at each stage, with the final consumer ultimately bearing the full VAT amount.”

That structure is what makes VAT feel similar to U.S. sales tax from a shopper’s perspective—but the mechanics behind the scenes are very different.

“In the U.S., sales tax is only paid by the end user,” says Kimberly Martinez, a Florida-based accountant with more than 17 years of experience. “There’s no federal sales tax, and each state—and even local jurisdictions—set their own rates. VAT, on the other hand, is calculated and remitted at every stage of the supply chain, with each party only paying tax on the value they add. That’s why VAT is embedded in the price, while U.S. sales tax appears at checkout.”

Who is eligible to collect a VAT refund?

For travelers, VAT refunds apply specifically to non-EU residents exporting goods out of the European Union. “VAT refunds for goods sold to non-EU tourists apply if several conditions are met,” Horáková explains. “The customer must prove residence outside the EU, typically with a passport or residence permit. The goods must be taken out of the EU within three months of purchase, and the value of the goods must exceed a minimum amount set by each EU member state.”

That eligibility also extends to EU nationals who permanently live outside the EU, provided they can document their residence abroad. Martinez adds that the rules can feel deceptively simple until you encounter the country-by-country nuances.

What types of purchases qualify for VAT refunds?

Not everything you buy abroad is eligible for a VAT refund—and documentation is critical. “You can generally get VAT refunds on goods such as clothing, accessories, perfume, cosmetics, electronics, and souvenirs,” Martinez explains. “VAT paid on meals, transportation, hotels, or anything consumed before departure from the EU is nonrefundable.”

And receipts matter just as much as the item itself. One of the most important steps for getting your VAT refund is keeping the right paperwork. You’ll need the original receipt or invoice from the store, showing exactly how much VAT you paid. In addition, the retailer or a specialized intermediary will provide a VAT refund form that must be completed and validated at the airport before you leave the EU. Some modern stores or refund services may include barcodes or QR codes to track your claim, but the key is to have all receipts and forms organized and ready—no crumpled receipts or forgotten invoices allowed.

“All VAT-registered traders are required to provide customers with an invoice showing how much VAT was charged,” says Horáková. “For tourists seeking a refund, this invoice, along with a VAT refund form completed by the retailer, is necessary to document the purchase and confirm the VAT amount paid.”

Minimum spend thresholds also vary widely. For example, Spain eliminated its minimum spend in 2018, Martinez notes. In other countries, the minimum ranges from about €25 to €175. In France, for example, it’s €100 per purchase, VAT included. However, if you’re shopping in Europe, look for countries with high VAT rates but moderate minimum spend thresholds—that’s where you can get the biggest refund for your purchase. This chart helps compare VAT rates from country to country.

What does the VAT refund process like?

The concept of getting money back sounds straightforward and even exciting, but the actual process requires planning, patience, and time. And, truth be told, it’s not as lucrative as it seems. “Retailers can either refund the VAT directly or use an intermediary,” Horáková explains. “In either case, one of these parties may charge a processing fee, which is often deducted from the refunded VAT amount.”

According to Martinez, travelers should temper expectations. “You’re never getting back 100 percent of the VAT,” she says. “Depending on the refund service and their fees, you’ll typically receive about 70 to 90 percent. Some companies offer instant cash or credit card refunds, but that convenience comes with additional fees.”

There’s also one critical step travelers can’t afford to skip: validation before departing the EU. If this step is missed, you can kiss any of that money, no matter how much, goodbye. Be prepared to leave ample wiggle room at the airport, as refund lines can be quite long. When you arrive at the airport, look for the customs desk, an electronic kiosk, or a dedicated refund office (like Global Blue); this will usually be near the check-in area.

And don’t forget Horáková’s above message: You can only claim a VAT refund if you physically leave the EU with the items within three months of buying them. If you’re planning a longer stay or multiple trips across EU countries, make sure your export of purchased goods happens within the three-month rule, even if your travel plans span more than one country. Otherwise, you risk losing eligibility for the refund.

Finally, VAT refunds don’t exempt travelers from U.S. customs rules. “You’re still required to declare overseas purchases when you return home,” says Martinez. There are duty-free exemptions of $200, $800, or $1,600, depending on “the country or countries you visit and the length of stay,” per the U.S. Customs and Border Protection. These exemptions apply to purchases that are “for your personal or household use or intended to be given as gifts,” but it’s best to read up on the exact details and updates before your trip.