Let's talk about shopping in Europe, please. This may not be a money saving strategy, but I'm interested in where the best places to purchase local goods may be while in Amsterdam, Germany, France & Switzerland. Does anyone know the best place to look for diamonds in Amsterdam?
I am aware that not all shops participate in the VATfree program. Are you willing to shop at merchants that don't participate?
{EDIT}
Please fill in what I do not understand.
VAT = value added tax where the {sales} tax is incorporated into the price of the item.
SALES TAX = tax is added to the price of item(s) after they have tallied. (As done in US)
DUTY FREE = products purchased in duty-free shops overseas {example: Beefeater Gin @ Heathrow} & not taxed by US Customs upon entering US.
US CUSTOMS = taxes items that were purchased overseas, declared on re-entry, & over a certain value.
Doesn't a product from Europe get taxed somewhere even in VAT-free stores?
{Does a VAT-free store mean no EU entity is taxing the items? Is sales tax charged for products/services like is done in USA?}
VAT refund offers only apply to merchandise above a certain purchase price, so many smaller purchases will not qualify; see also http://www.ricksteves.com/travel-tips/money/vat-refunds about the paperwork involved. When you return to the USA, you can carry up to $800 worth of purchases without paying import tax. The items that are shipped home separately don't count toward this $800 total but will pass through a separate customs inspection and tax review with varying purchase limits; see http://www.cbp.gov/travel/international-visitors/kbyg/customs-duty-info.
Collette,
Slight correction
VAT = Value Added Tax where the tax is incorporated into the price of the item. VAT applies to goods AND services. It is called different things in different countries (TVA, MwSt, IVA etc.), but they all translate as Value Added Tax.
VAT is a SALES TAX, but in all European countries I know of the advertised price (marked price) must include all taxes. Otherwise it is fraudulent advertising.
DUTY FREE = Products purchased in duty-free shops which have no taxes paid. These goods must be exported intact. Duty free shops are usually in Airports. Whether they are taxed in the country of arrival depends on whether you are importing more than a certain value (which varies by country). The import taxes applied by the country of entry are the same whether the goods were bought duty-free or duty-paid.
There is no Duty Free when travelling between EU countries, because the EU is a Customs Union. But on the other hand there is no Duty or tax to pay on goods purchased tax paid in another EU country, so long as they are for personal use (will not be sold).
VAT REFUNDS = What the link above says is, in my opinion not 100% correct.
VAT is not charged on exports outside the EU. If VAT has been paid (the goods have been purchased in a normal shop, not a duty-free), it is possible to re-claim the VAT, but it is not easy. You can only claim VAT back on goods which are exported intact, not on hotel or restaurant bills.
The VAT must be reclaimed by the shop that paid it, they then reimburse you, usually less a handling charge. Because you don't want to go back to the shop to get paid, you must pay for the goods with a credit card, and you are reimbursed later with a payment to the credit card. Only some shops will do the paperwork, and only for big purchases. It is only worth the hassle for the shop if they have enough non-EU tourists making big purchases. if not, hard luck.
Sorry for going off topic. I thought I asked a simple question. NOT!
Colette, it's not off topic, we're still talking about shopping. Unless you consider me being male puts it off topic :-)
"Doesn't a product from Europe get taxed somewhere even in VAT-free stores?" VAT-free is the same as Duty free. "Normal" shops outside an airport must charge all taxes (VAT and duty), Duty-free shops, who are only allowed to sell to customers leaving the EU, do not include any tax.
Whether the customs service of the country you are travelling to (in your case the USA) charges tax & duty on the goods you are importing is up to them. They usually don't care how much tax you have already paid for the goods, they treat all your purchases the same.
Some airports have both duty-free and duty-paid shops, this can be confusing.
Thanks, Chris. Your gender does not matter. I thought I was off topic.
I was thrown by VAT-free stores as though these stores existed side-by-side w/VAT-charging stores. In my simple mind it sounded as though some "regular" stores were getting around paying taxes.
Why should I be concerned? I do not wish to be in a store that is doing something illegal with its books should it be raided by the officials.
OK, I have provided you with your laugh for the day! :-/
Whoa! This is so confusing. So I went back to the original source link that I posted, and it states,
"You are eligible for a VAT refund over all your purchases. However, to get a VAT refund a shop must cooperate with offsetting the VAT. It is merely a small administrative handling, but some shops are just not willing to help out. A shop is not legally bound to participate, even though you are in your right. Better be safe than sorry and only shop at shops listed in our tax-free shopping guide"
So, for instance, you can look up shops here to see if they participate VAT GUIDE
I am guessing that the prices will be higher when the VAT is included as you will have to go through the process to reclaim your additional tax when you leave the EU. Is that correct?
I think that was what Chris said in his first post. Being I have never asked for a VAT refund, this is new to me.
Oh ChrrrIIiissss! < sounds like mother.
rbovine1 from Chattanooga
I disagree with the statement in your quote:
The site you post is one of many companies which will do the paper work for a retailer, for a fee. Again it is only worth a shop signing up with them if they have enough non-EU customers to make the extra hassle and cost worthwhile. This site is just trying to mud-sling at shops which don't sign up with them.
This site only lists shops which are signed up with them. The look to be all in Netherlands and Belgium.
"I am guessing that the prices will be higher when the VAT is included" - ALL prices marked in shops include VAT. That is the amount you normally pay. The VAT amount will be shown on the receipt. If you export the goods and follow the rules you later get a refund of the VAT amount, less any charges the shop applies for the paperwork.
@Colette. I realised after the previous post, that shops which do VAT refunds sometimes call themselves "VAT-free stores". They are not actually VAT-free, you pay the VAT when you buy the goods, they are "VAT-refundable".
An example. You see a "thing you have always wanted" advertised in a shop window at €199. This price includes VAT (at say 15%).
You buy it, paying €199 with your credit card. On the receipt it says: "Total €199, Net price €173.04, VAT @ 15% €26.96". The shop also provides you with the customs export form.
You get the customs form stamped at the border, and send it back to the shop (or their agent). Some time later your credit card gets credited with €26.96, possibly less a handling charge.
Does this make sense?
Chris F, I've never filed for a VAT refund before - when you say "you get the customs form stamped at the border" - is there an office at the airport that does this? Does it matter if you're shopping in more than one country before you leave Europe? Thanks for any info.
Donna,
Yes, there is usually a customs office at the airport which does this. It is "airside", AFTER the security check. It is sometimes hard to find. He is stamping to certify the goods have left the EU.
"Does it matter if you're shopping in more than one country before you leave Europe?" - It does not matter how many EU countries you shop in, you get all the forms stamped when you finally leave the EU. As an example, click here for an info leaflet produced by Heathrow airport, giving lots of info including where the customs offices are in that airport.
Note, you get the form stamped when you leave the EU, not Europe. If you are crossing a land border, you need to find a manned customs post (many are unmanned). If you are leaving the EU by train it is even more difficult to get the form stamped.
I live in Switzerland, but only 4Km from the EU border. Shopping in Germany and then claiming back the VAT (or MwSt in German) at the border is very popular here. Saves a lot on your weekly shopping.
Thanks Chris. I was only quoting what that website source stated & I appreciate your clarification. Is it true that the tax in Holland is 21%? Yikes, that sounds a bit expensive.
Our trip originates in Amsterdam, but we will be flying home from Zurich with the last stop in Basel. Where should I turn in my VAT refund documents?
Also, if items are purchased and shipped directly home, is it eligible for the VAT refund?
What happens to all the VAT collected that never is claimed as a refund?
Sorry if my questions are elementary, I am not familiar with this system, but thanks so much for your help.
rbovine1, I looked it up, the VAT rate in the Netherlands is 6% or 21%. I got this from a list of the rates at the EU official website.
If something is purchased and shipped directly by the shop outside the EU, they should be able to just charge you the non-VAT price (exactly the same as any exporter), but you would have to ask the shop, I have never done this myself.
"What happens to all the VAT collected that never is claimed as a refund?", then the tax authorities keep the tax, they do not even know the goods have been exported.
"we will be flying home from Zurich with the last stop in Basel.". You may have noticed I live in Basel, so I know exactly where the customs posts are. I am assuming you will be arriving to Basel from Germany by train. There are two main stations in Basel, "Basel Badischer Bahnhof" and "Basel SBB". Intercity trains from Germany stop at both. But, for customs and immigration purposes Badischer Bahnhof is in Germany, the customs border is between the two stations. You do not want to cross the border on the train, as customs only do random inspections and cannot stamp your forms.
Get off the train at Badischer Bahnhof, you then go through German and Swiss customs which is located in the station between the platform and exiting to the street. German customs is open 08:00 to 22:00 Monday to Saturday. They stamp lots of these forms for returning Swiss shoppers.
Once outside the station, you can then catch a tram to your hotel.
Chris F, thanks for the additional info! Donna
Chris, thanks so much for all this information. And for the listing of the specific countries with the appropriate taxes, that is very helpful. Hmmm, I may have to re-think my shopping excursions!
I haven't de-taxed in the past few years, but the last time I did, the office was before security at CDG. There can be a long line of people at some times. We had to show the goods packed in our bags to the officers as proof the items were leaving the country, which meant finding the detax office before checking bags. We were bringing home Laguiole knives.
Geez, Bets, Did they let you have KNIVES in your carry-on bags??
Checking the bags is pretty vague. It means checking in the bags, not verifying the contents. So to be as clear as mud, customs checked the bags before we checked the bags with the airline.
:) LOL! Well, considering this is the RS forum and I thought all these folks were packing light to discover the back door.....but hey, glad you brought your knives home safely! I'm planning to ship home anything that I must buy this next trip. Sigh, I remember when travel was easy & fun.
rbovine1, I ship stuff home every year. Pricey but worth it to not carry books and bottles of wine all over the continent.
"Yes, there is usually a customs office at the airport which does this. It is "airside", AFTER the security check. It is sometimes hard to find. He is stamping to certify the goods have left the EU."
Sorry, but the VAT is often NOT airside. It's before security at Heathrow and CDG. Which is good because if your purchase is a liquid over 30oz you can't carry it on. If you are using Heathrow plan a lot of extra time, it can be a nightmare. I did find one place that was open after the airside check but wasn't able to get all my VAT back because I had checked some stuff. (NO biggie I had not bought much) The second location however is NOT a location that does this as their main duty and you may find they aren't working that day so don't depend on this :)
Here was my CDG experience from last week. When you're in the terminal start looking for the VAT Refund signs (they're pretty big and hard to miss). For some silly reason, however, they are DOWNSTAIRS on the arrival level not UPSTAIRS where you check in for your flight.
Anyway, you get in a short line that leads up to several ATM-like machines. You take the forms that the shopkeeper kindly prepared for you, you scan the bar code in the machine and ... well that was it. We were on our way in 30 seconds. I guess my wife chose the refund-to-my-credit-card option so there was no need for any money to change hands. It was super easy. It did seem like some people were directed over to what looked like ticket windows, luckily I do not know why.
Oh, and here was my Heathrow experience at Harrods. When I was checking out they asked for my boarding pass, verified that I was passing through and didn't charge VAT on my purchase.
Check out the Wikipedia entry for duty free if you want to know more than you can imagine about this concept.
