Value added tax

I could be mistaken, but I believe that tourists can not claim refunds for VAT on transportation, lodging or food. Basically, just on (non-edible) stuff that you buy. So that kinda takes the incentive out of going through the trouble IME. If you're spending money on souvenirs, then it's probably worth the hoop-jumping required. Unless I've bought a fair amount of goods to bring home, I generally do not bother.

I think the minimum amount that must be spent in a single store at one time is 25€ in Germany and 155€ in Italy. Now, whether or not it will be worth the time to save around 12% of the amount spent if you spend 25€ is a whole different story. As David notes, services provided in country such as for example, bus or train rides, repairs, restaurant visits, and hotel stays are not eligible for the refund.

Is paying the VAT an issue? Is it unfair? Please remember that when you use any public service abroad. Roads, for example, which are used to transport for all services you use as a tourist. Emergency medical services, I was seriously ill on my last trip and seeing a doctor and receiving an antibiotic prescription cost all of 69 pence. This list could go on...

There are many articles covering this topic if you Google it. It only applies to goods that you are taking home, so not to accommodation and transport or entry fees to museums etc. The stores you buy from have to participate in the VAT refund scheme and you need paperwork from them for VAT recovery, which you take to the VAT refund office at your point of exit. The goods must be with you and unused.

Of course, if you reclaim the VAT, you need to declare this when reentering America, as you maybe liable for import duty.

I understand that it can take 6 months for the VAT refund to be sent to you.

https://www.ricksteves.com/travel-tips/money/vat-refunds

https://ec.europa.eu/taxation_customs/individuals/travelling/travellers-leaving-eu/guide-vat-refund-visitors-eu_en

These should address most of your questions.

VAT refund is for purchasing and exporting goods (private use). Means local transport, accomodation during stay and food eaten in Germany are NOT included.

Official info from Berlin as an example:
https://www.berlin.de/en/tourism/travel-information/1741381-2862820-value-added-tax-vat-refund.en.html

"Of course, if you reclaim the VAT, you need to declare this when reentering America, as you maybe liable for import duty."
You have to declare the items whether or not you claim the VAT refund. I have found that if you honestly disclose what you bought on your customs form and are over the $800 exemption, you are not charged a duty. I could be lucky but I declare and am usually over the exemption and have never been assessed a duty. On the other hand, I have seen how customs agents immediately assess rather large fines when they have discovered undeclared items in a traveler's luggage.

How do you claim the value added tax (VAT)? I guess the only way I
would go high enough would be at hotels, and is transportation
included? Thanks for any advice. I will be in Germany and Italy

Hotel and transportation taxes are not refundable.

To reclaim the VAT, the goods must be exported unused and intact from the EU. It is not a special deal for tourists, all export goods are untaxed. Food, hotels, transport etc. have all been consumed inside the country, you are not exporting them, so no refund.

There are a few paperwork hurdles to go through, and only some shops are set up to do the export paperwork. Do a search for the full details.

It only makes sense if you are buying several hundred Dollars or more of things to take home. Messing with the paperwork, seeking out the counter at your exit airport, and going through the hassle better to equate a $100 payback, meaning spending of $500 plus (roughly).

The exception might be the case we ran into in Germany where the store was able to process the VAT refund, with us getting the discount immediately (that was 18 years ago).

Of course if you are spending thousands, sure it makes sense, but you may have to pay something on the US side. If you wind up talking about less than a $100 of duties, they likely will not try to collect, but you are hauling back a couple thousand Dollars of stuff, they may. (Of course declare, or if you get caught, they can just take it all or fine you additional.)

When you see the huge lines of Chinese at the Frankfurt airport waiting for their VAT refunds for their knives, cookware, jewelry, and designer items, it will put you off standing in line.
It isn't worth your time unless you have some major ticket items.

Chinese at the Frankfurt airport waiting for their VAT refunds....

Back in the 1990s when Japan's economy boomed, Japanese visitors were the big spenders in Hawaii. A rule of thumb was the Japanese tourist spent in one week, what an American tourist spent in two weeks and what a Canadian tourist spent in three weeks.

Now it's the growing Chinese middle and upper income classes switching from saving to spending:
https://www.dw.com/en/chinese-tourists-go-on-shopping-sprees/a-38146379

Jewelers and shoe shops, delicatessen stores and perfumeries along
with many other shops have made good profits from visitors
from the USA, Russia, Japan, the Gulf States, but most of all, from
China.

Chinese tourists in Munich, according to the survey, spend an
average of 513 euros ($558) a day, which means that they have bumped
the strong contingent of Arab shoppers, with an average daily spending
of 367 euros, off first place.

Frankfurt Airport has been offering [shopping] service to Chinese
tourists, free of charge, since 2012..... [T]here have been nine staff
members on duty at the airport to take care of thousands of Chinese
tourists. Apart from shopping advice, they also help the tourists with
value added tax refunds or questions on customs regulations.

The bottom line is VAT refunds are worth the time collecting the rebate if you are averaging 500 EUR a day in jewlery, shoes and clothing that your are taking home from Germany.