Tuesday, June 25, 2024

How does tax-free shopping now work when you travel to EU countries?

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My husband and I recently went on a five-day trip to Paris, where we spent a fair amount on eating and drinking and also on gifts for both ourselves, and our immediate family, alongside tickets to a variety of tourist spots including Disneyland.

It’s been a while since I’ve been on a European trip like this and when we arrived at Gare du Nord station in Paris to get the Eurostar train back to London, I noticed terminals offering tax back to citizens of certain countries.

To my surprise, I saw the UK flag on the terminal – and then started to think I’d perhaps made a mistake not keeping all receipts and attempting to get the tax back. 

Tax-free shopping in EU: Should I have kept receipts for all my purchases in Paris and is there a way to claim any tax refunds now we’re home?

A few shop assistants had mentioned something about tax refunds, but we didn’t think it was applicable to us.

We were rushing a bit to catch the train, so I didn’t investigate the terminals further – but could we have ended up with a big refund if we’d kept all receipts? Or have I got the wrong end of the stick? And is there a way to claim any tax refunds now we’re home?

SCROLL DOWN TO FIND OUT HOW TO ASK HEATHER YOUR TAX QUESTION 

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Heather Rogers replies: When you travel to EU countries you may be eligible for tax-free shopping.

One of the consequences of the UK leaving the EU is that now when you make purchases in Europe and take them either back to the UK or to another non-EU country, your purchase can qualify for a VAT rebate.

Who qualifies for tax-free shopping?

Anyone who permanently or usually lives outside the EU. Your passport or other national identity document will be your proof of your permanent residence.

In France you need to be over 16 and in many other countries it is 18. You must make the purchase in person.

What is the VAT rate, and how much do you need to spend?

The VAT rate will vary from country to country and also may vary on type of product. Not all products will have VAT.

You usually have to spend over a certain amount on a purchase to be able to claim, but this varies from country to country so you will need to check.

What should you do when making a purchase?

Even if you are eligible for ta- free shopping, you still have to pay the full price on the goods including the tax in the shop.

Before you purchase, ask the shop in advance whether they provide the tax refund service. They usually have a sticker or sign if they do.

Ask the shop staff what spending threshold applies in order to be eligible for a refund. For example in France, you must spend at least 100 euros each time.

Try to have as many purchases if possible on one receipt from the same shop. You can’t amalgamate purchases from different shops.

When you pay, the staff member will ask you to provide proof that you are a visitor to the EU, so make sure you take your passport with you as you will need to show it (or another identity document) proving your residence outside the EU.

The staff member will ask you to fill in a form with the necessary details to prepare your claim.

You may be asked to show your departure ticket as well, as proof you are leaving the EU within the time limits (which are explained below) so it’s worth bringing that along too. The shop will fill in their part of the form.

You will also receive an invoice for the goods.

When you receive your reclaim form, make sure you fully understand exactly what you need to do to make your claim and how you will receive the refund.

In some cases, the shop itself may refund you, but in many cases the shop will use a third party to organise the refunds on its behalf. 

What are the time limits?

You must leave the EU three months following the month in which you made the purchase, so for example a purchase made on 12 March requires you to leave the EU by 30 June.

You may travel on within the EU to other countries after making a qualifying purchase, but you must leave the EU by the specified timeframe, and you must take the goods with you.

Will you get all your VAT back?

No, as there is often an administrative fee for this service which will be deducted from your refund. Always ask this at the time and how much the fee is.

What must you do at Customs when you leave the EU?

You must show the invoice for the goods, the refund form the shop has given you, and the goods – which must be unopened – and any other necessary documents such as a passport and ticket to the customs officers of the last EU country you leave.

This could involve getting off a train, if you have been travelling by train through several counties. 

If you don’t get the form stamped at the EU border before onward travel to the UK, then you can’t claim.

The customs officer must stamp the form the shop has given you as proof of export. Without the stamp, you will not obtain the refund.

You should not use any items that you have bought prior to leaving the EU that you want to claim a VAT refund on. 

They must not have been consumed – as mentioned above, they must be unopened and in their original packaging.

Any goods consumed whilst in the EU, such as food and drink, do not qualify as they haven’t been exported.

Bear in mind that you may have to pay UK duty and/or VAT on any goods for personal use or intended as gifts worth above £390, and you should declare these at UK Customs on arrival. 

The rules are different for alcohol and tobacco, and you can find a full rundown on bringing goods into the UK here.

Can YOU claim on holiday purchases? Terminals offering tax back to citizens of certain countries

How do you actually get your refund?

You must then follow the steps explained on your refund document or as explained to you by the shop.

You can claim your VAT refund in bigger airports immediately, or you will have to send the refund form to the address given by the shop.

Always keep a copy in case there is a problem.

If you don’t get your refund, refer back to the shop first, or if they use an intermediary then complain to them.

What if you didn’t get a stamp at Customs?

In principle, the stamped VAT refund document is obligatory for any refund.

You could try contacting the shop from which you bought qualifying goods for the information you need to see what documents they might accept as a proof that the goods were exported within the time limits to enable you to obtain a refund.

Ask Heather Rogers a tax question

Tax expert Heather Rogers answers our readers’ questions

Heather Rogers, founder and owner of Aston Accountancy, is our tax columnist. She is ready to answer your questions on any tax topic – tax codes, inheritance tax, income tax, capital gains tax, and much more.

If you would like to ask Heather a question about tax, email her at taxquestions@thisismoney.co.uk.

Heather will do her best to reply to your message in a forthcoming monthly column, but she won’t be able to answer everyone or correspond privately with readers. Nothing in her replies constitutes regulated financial advice. Published questions are sometimes edited for brevity or other reasons.

Please include a daytime contact number with your message – this will be kept confidential and not used for marketing purposes.

If Heather is unable to answer your question, you can find out about getting help with tax here, including sources of free professional advice if you are elderly and/or on a low income.

You can also contact MoneyHelper, a Government-backed organisation which gives free assistance on financial matters to the public. Its number is 0800 011 3797.

Heather gives tips on how to find a good accountant here, including when to seek help, hiring the right type of firm and typical costs.

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