Options of layover at FRA vs MUC airport when flying from Milan to YVR

If you want to hang out in the lounge and shop at the airport, I highly suggest you select the 3 hour connection time. 1.5 hours might just be enough time to get from your arrival gate to your departure terminal/gate, not to mention passport control and security screening in Frankfurt. You also need a fudge factor in case you are late arriving from Milan. IMO, Munich is much easier to transit through. But I'm not usually trying to shop or lounge.

Technically you must get your VAT refund forms stamped when you exit the EU. That would be at Frankfurt or Munich airports, not at Milan. That implies you have the goods with you in your hand luggage in case customs wants to see them
This is NOT Duty Free. Duty Free is something you buy at the airport after legally exiting the country, where no tax is charged at time of purchase.

You will also go through passport control for exiting the Schengen Area at Frankfurt or Munich. No passport control leaving Milan, but you will have to show your passport to the airline as an ID check. Duty Free will only be available at Frankfurt or Munich and only after you go through passport control.

YVR = Vancouver Airport, I had to look it up.

Another vote for the 3 hour layover. The 1.5 hr has no fudge factor ( i.e. 1st flight late) and if doing some last minute duty free shopping is on your agenda, a 1.5 hour transfer is not likely to permit that. The 1.5 hr transfer may not even permit a stop at the lounge, unless its very close to your departure gate.

I have been to one of the Lufthansa business class lounges at MUC. It was delightful. I had a comfy shower, ate delicious food, and relaxed. It was clean, well managed and not too crowded. The only thing to note is there is more than one lounge - find your connecting gate and then find the closest lounge. Mine was in another terminal and the route to get there was down a long escalator, walk under the taxiway and up to the correct terminal. I could have stayed in the original terminal and gone to my gate later, I chose to get close first for maximum relaxation.

At FRA, I chose the Maple Leaf Lounge instead. Your Lufthansa flight will be code shared with AC, so you have a choice of either one. The MLL was relatively new at the time so I wanted to check it out. Also very nice. If you have time, you can go to both ;)

I agree to choose the longer layover so you can enjoy a lounge and reduce time constraints risk.

Thanks everyone.

How long does it take waiting in line to claim VAT ? I just found out that there is cash handling fee for cash refund depends on the VAT amount, has it always been this ? I don't record this when I visited Paris back in 2005.

Whats the Global blue refund point ?

Customs doesn't give you your VAT back, they just stamp the forms. That certifies the goods left the EU unused (exactly the same as any company doing an export). Since the goods are exported, no VAT is due, and the shop can refund the overpaid VAT.

You can send the forms back to the shop, and they refund the VAT on to your credit card.
Or sometimes there is an agent of the refund company (who does the paperwork for the shop) at the airport, and they do a direct refund. "Global blue refund point" is an example of one of these companies.
I have no idea if there is such an agent at Frankfurt or Munich airports.