Updated on November 28th, 2022
If you are visiting Europe and planning on buying a Rimowa bag, you can get a VAT refund on the tax.
Tax reimbursements can be claimed on goods that can leave the EU. They are not valid on services, for example, a dinner at a restaurant.
There’s a minimum threshold for the value of the goods you have purchased before you can claim a tax return.
To claim a refund, you need to do the following:
- Prove you live outside the EU
- Spend a minimum of EUR 175 (this may vary by location)
- Get a refund from
- Get your documents and goods verified by customs
- Claim a refund at the airport when leaving the EU
This article will tell you all about claiming a tax refund in the EU. We will tell you what qualifies for a refund and explain the process.
Lastly, we will also tell you how much you can save if you buy a Rimowa Original Classic.
Let’s dive into it.
What is a VAT refund?
The VAT refund is any tax you pay for things purchased in Europe as a non-European Union (EU) citizen. For instance, if you pay a 20% VAT tax while in the EU territory, you can get this tax reimbursed. The refund process takes place when you leave the EU countries.
Value-added tax (VAT), like the goods and services tax (GST), is a sales tax. It is not a revenue tax.
In Europe, whenever you buy something, there’s added tax. This tax is applied throughout the supply chain. However, if you come from a non-EU country, you can get a tax refund for this VAT.
How much is the VAT in Europe?
The standard VAT rate in the European Union is calculated by the different national tax authorities. It typically ranges from 5% to over 25%.
VAT rates differ from country to country and by category. There are several categories of sales taxes: standard, reduced, and super-reduced.
For instance, some products have a tax of over 20% in France. Other products might get taxed between 5.5-10%. Some items are eligible for super-reduced VAT – they might be taxed at 2.5%.
You also need to understand that the VAT is charged on the pretax price of the purchased goods. This means that the final price you pay includes the value-added tax. Therefore, your VAT refund is calculated as a percentage of the base price, not the price inclusive of the value-added tax. Therefore, something with a value-added tax of 20% will get around 16.7 of the VAT refunded.
You must ensure that you understand that VAT is included in the purchase price. In many countries, private companies try to scam foreigners during online purchases. They include the VAT at the last step during the payment stage. This is especially common when purchasing an airline ticket online.
When can you claim a VAT refund?
VAT refunds can be claimed when you buy products in the European Union territory without being a permanent resident. But the products need to leave the EU within three months of purchase.
Since your official permanent residence will be outside Europe, you will be considered a “visitor” in the European Union territory. This will make you eligible for VAT refunds when you leave the EU.
It’s because buying anything in the European Union and taking it outside is considered an “export”. Exports from the European Union are exempt from value-added tax (VAT). Therefore, you can make a refund claim on any goods purchased within the European Union borders.
Restaurant bills or hotel stays are not counted in the tax-free bracket. That’s because you use those services inside the European Union and don’t “export” them. If you travel for business, you can also claim refunds for these purchases. But it’s a very long process with a lot of paperwork.
You must ensure that your purchases are above a certain amount to get a cash refund. This threshold varies by location within the European Union borders. If you plan to do some tax-free shopping, remember this.
This spending threshold was set to avoid unnecessary administrative work over a small purchase. The fee is usually EUR 175, but some countries can have a lower limit.
Can I get a VAT refund after leaving Europe?
Yes. You need to leave Europe to be eligible for a VAT refund.
While you are still inside the European Union limits, you cannot get a refund. You need to go out of the taxable region completely, not just the country where you got the merchandise.
Can travellers buy goods without paying VAT?
No, travellers must pay the full amount. They will qualify for a VAT refund when they exit the European Union territory.
When you make a purchase, the price will include the VAT. You cannot pay the tax-free price. However, you can get refund forms and a refund for the taxes you paid.
How to claim a VAT refund?
Although some details might vary from country to country, the general procedure goes as follows:
1. Have proof of residence outside the European Union
For starters, you need proof that you are not an EU citizen. This can usually be your travel documents, ideally a passport.
2. Get the paperwork
When you are at a shop, ask them if they offer a tax refund. They will give you a tax-free form that you will need to fill out. The shopping assistants can help you with that.
Ensure that everything you write is correct. You need to save the receipts of all your payments for this.
3. Visit the airport or the train stations
If you don’t get a VAT refund directly from the shop, you must take your documents to your last stop in the EU.
These documents include purchase receipts, refund forms, and a valid ID (your passport). There will be a VAT office at the border crossing. You need to get your documents stamped by them. Therefore, make sure that you have some extra time before your departure.
Not every country on the European continent is a part of the EU. Therefore, make sure that you know which countries qualify for a refund.
Plus, you need to prove that the goods you bought are leaving the EU. Thus, the VAT is offered on your purchase at the airport when you fly outside the EU.
4. Verification at the customs office
Customs is the step that’s going to take the most time. Do this before you get your luggage checked in. The customs agent would want to ensure that the goods are being exported.
After verifying, the customs officer will stamp your forms. This would be a customs stamp proving that you are exporting the goods.
One more thing, the customs officer needs to see that the goods are new. Used products are not eligible for a refund. Therefore, you must not use the goods before exiting the EU.
Plus, you need to show the goods to your customs officer physically. Therefore, you must ensure they don’t get checked into your flight. Therefore, we would recommend not checking in until you have visited customs. Or you can try to see if they let you take your checked luggage to customs.
This part is probably the one that would be the most hassle, but customs is an essential step in this process.
5. Get your money paid back
After completing all of the above, there’s one final step – yes, we know there is a lot of red tape.
The items you purchase at any store will be refunded through a retailer. These are third parties like Global Blue, who work with the store.
You must find their terminal desk and show them your stamped refund documents. They will likely charge a small commission.
However, if you can’t find their desk, you must mail them the documents to get your money back.
6. Pay VAT in your own country
Upon landing in your own country, you need to declare the items you have purchased abroad.
In doing so, you will need to pay the VAT at the home rate for the base price of the items. Usually, people pretend that the items are not new. As a result, they escape the taxes.
But if you don’t want to get into any legal trouble, it’s best to declare the items as new. The VAT rate in your home country would likely be less than Europe, and you would still be saving some money.
So, for instance, let’s say that the VAT in your country is 6%. If you got 20% VAT refunded, and need to pay 6% upon landing, you are still saving 14% off the base price!
How long does a VAT refund take?
Getting the amount refunded to your bank account usually takes around three weeks. It will be done instantly if you can get a cash refund at the airport.
Cheques also take around three weeks to be posted to you.
Takeaway
Ensure that you do not use the goods before leaving the EU and that they leave the EU within three months.
There’s some paperwork involved, like visiting customs. But it’s worth getting your money back. You just need to plan a little for it.
Let’s say you purchase a Rimowa Original Cabin Germany. The VAT rate in Germany is 19%. Let’s do a little math on a price tag of EUR 1,060.
| Item | Money (EUR) |
| Rimowa Original Cabin | € 1,060 |
| VAT on the product | € 169.2 |
| Base price without VAT | € 890.8 |
| Tax you have to pay upon entry into your country (6% – NOT REAL FIGURES) | € 53.4 |
| Money you saved | € 115.8 |
So, you basically saved over EUR 116 or dollar! As per 2022 the exchange rate between the dollar and the Euro is 1 on 1.
And there’s even more money to be made if you take exchange rates into account. But we will give you more details about that in our next article.
Made in Germany - Model 2022
Made in Germany - Model 2022
Made in Germany - Model 2022
