Get a Refund on Value Added Tax

BY STEVE DINNEN

If your bags brim with the finely crafted flannel shirts that Portugal is noted for, make sure to visit alfondega–the customs office–on your way out. There, you can claim a refund of the sales taxes that you paid on the merchandise you bought.

Portugal and other EU countries, as well as a few others such as China and Japan, offer foreign tourists a refund of taxes they pay on merchandise they acquire while visiting. Restaurant and hotel charges are not included.
This tax, generally called a VAT, for value added tax, can be considerable. Sweden levies 25 percent on most merchandise. Portugal is at 23 percent, Great Britain at 20 percent.

You may have to meet a minimum threshold. It’s just 30 Euros in Germany, but 175.01 Euros in France. You can add multiple purchases to get to this level.

Make sure that you save receipts, and that they include tax ID numbers issued to the retailers by national governments. Allow extra time at the airport so authorities can process the paperwork. In England, they’ll issue a credit card refund or cash.

Officials at the Milan airport advise packing whatever it is you bought at the top of your suitcase, because inspectors will want to see that you did, in fact, buy what you’re claiming.

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