Most travelers who managed to do at least some shopping during their trip abroad are entitled to a tax refund when returning home.

What is tax-free?

Tax-free is value-added tax (VAT) refund system which is so popular among tourists. VAT is included in the final cost of the goods and may vary from 7% to 22%, depending on country. Since traveling foreigners do not have time to take advantage of all benefits of the system, the tax can be returned, leaving the country where the purchase was made.

How to use tax-free?

Step 1: make a purchase

In each country there is a so-called "minimum amount of purchase" for getting a tax refund. For example, in Italy it is 155 euros, in Germany 25 euros, in Finland 40 euros, in France 175 euros, in the UK 30 pounds. If the purchase amount exceeds this threshold, you can ask the sales assistant about tax refund.

As a rule, the majority of chain stores, as well as large department stores and outlet shops, work with tax free companies. The cashier will give a voucher for tax refund and attach a check to it. In most cases, the voucher is filled in by the cashier. For personal information you can be asked for passport or travel tickets. However, sometimes you will have to fill in the tax free form yourself.

As mentioned above, in different countries you can expect a different percentage of tax return. For example, in Denmark, Austria, Hungary, Norway, Sweden, Belgium and Argentina, tax refunds are quite attractive – as much as 15 to 20% on a purchase. But in Singapore, Lebanon and Sweden tax refund will not exceed 7%.

You can pay for the goods in the tax free system both in cash or by credit card.

Step 2: Stamp you voucher when leaving the country

When leaving the country where the purchase was made (or from the last country of the EU zone), it is necessary to apply to the customs office, where the officer will put a stamp, stating that the purchased goods "leave" the country together with their owner. Customs officers are authorised to look at all items subject to tax refund. It is very important that goods have all price tags on them and have not been worn or in use.

Many tourists are quite concerned about this, but this is a legitimate demand. In order to avoid unpleasant emotions, it is best to go to the customs officers before registering luggage, and have you tax free items conveniently packed and easily accessible. Sometimes customs officers trust travelers on their word and do not ask to open or unpack luggage.

It is important to keep in mind that customs may not work nights. So at working hours there can also be a queue and it will take some time to get a stamp.

Step 3: get a tax refund

For VAT refund you should:

  1. Give your voucher to a tax free company employee at the airport. However, to do so you will most likely have to come to the airport in advance and wait in a long queue.
  2. Sent the voucher to the address stated on it, specifying your credit card number. On average, this tourist is given about 3 months of time, depending on the VAT refund company
  3. Contact the company representative or the bank that supports this service upon return home. Typically, the procedure takes from a few minutes to several days.