VAT tax

Out of morbid curiosity Why do they give you back VAT tax on larger purchases?? I live in a tourist area. (near Disney) and that is what tourist are for. We charge more tax in certain hotel locations and such.. I would think if they want to refund taxes they would do it for their own people. Tourist are there to spend their money and help the local economy I would think Just wondered if anyone knew Michelle

Posted by Michelle
Valrico, FL, USA
120 posts

I was just curious as to why they allowed it. If I loved in Italy I would want the opposite.. I know we have what we call luxury taxes here on some things

Posted by Laurel
Rome, Italy
2208 posts

The VAT is so high (21%) that is dissuades people from spending on large purchases, there for tourists are eligible for a refund, if you want to go to the bother. You will pay the tax, but you can get it back of you care to work at it.

Posted by Agnes
Alexandria, VA, USA
616 posts

Because 1) VAT taxes are quite high, 2) they are used to benefit locals and bolster a certain standard of living that tourists can't really take advantage of in the long run and 3) the countries want to encourage large purchases by tourists instead of dissuading them

Posted by Monte
Genesee, ID
1376 posts

Our perspective on VATaxes is a little different. We do not ask for refunds because we have used and enjoyed the things they pay for.

Posted by Michelle
Valrico, FL, USA
120 posts

EXACTLY I would think they would tax tourist more in fact.. It is there site and their country we are guests in.. I think tourist are suppose to pay taxes and take care of the economy there.

Posted by Agnes
Alexandria, VA, USA
616 posts

Tourists do pay VAT taxes on all kinds of things that are not covered by the exemption - hotel rooms, goods, gas, restaurant meals, etc. This is simply a narrowly tailored exemption on larger purchases only (i.e. luxury goods, not basic goods...think of all the Prada bags or expensive leather goods over a certain amount) in an effort to encourage those purchases. If the country wasn't better off with this exemption, they could reverse it. Also, a lot of folks don't take advantage of this exemption anyway - either by choice (like prior poster) or laziness in jumping the paperwork hurdles to get the exemption. It's totally an individual decision. If you want to pay the tax on high value goods, you're free to not take the exemption.

Posted by Douglas
Oak Park, Illinois
2391 posts

In general, Europeans pay very high taxes (compared to the US) because they get far more social services and safety nets than in the US. And as explained, by allowing VAT refunds (ONLY for goods never used in the EU), it encourages foreigners to spend money buying things, which helps the local economy. BTW - Charging high taxes and fees to tourists in the US is a relatively recent effort that has skyrocketed in the past 10 years or so. Locals don't want their taxes raised and tourists don't vote in local elections. And many of the airport and rental car fees pay for those services (new runways, terminals and shuttle busses). Europe has the same kind of tourist taxes and fees.

Posted by Harold
New York, NY, USA
2852 posts

Michelle: I'll try to be gentle. But this is your second post asking "why don't they do things in Europe the same as in the US?" (your other one was about tipping customs). The short answers: 1. Different countries have different ways of doing things. And as a short term visitor, you won't change them. So you must accept them as they are. 2. No all European countries do things the same way. I'm now in Poland, and my hotel desk person said a 10% tip in a restaurant is proper. But, as you've already learned, Italians don't usually tip in a restaurant at all.
3. While you may find the local way of doing things puzzling, locals don't. It's one thing to ask about it, but it's another to imply that your way is "better" or "more logical." Your posts have come perilously close to the latter. And that kind of attitude will be picked up on by the locals, fast. If they wanted different tipping customs, they'd have them (the servers are paid more than here, and so don't need to be tipped to survive). If they didn't think VAT refunds made sense, they'd get rid of them (Canada used to have GST refunds for certain things, but has stopped). So, learn about the differences between countries, and accept them as they are, and you'll have a much better trip. If you spend your whole trip saying "I wish they'd things the way we do them at home", you won't have a good time. Full disclosure: of course, I've said that myself at times. It can be very frustrating when there seems to be a simple solution to a problem, and people resist it with all their might because it's "not their way." But, as I said above, my frustration didn't change anything, and just made me grumpy.

Posted by Michelle
Valrico, FL, USA
120 posts

Sir I Am not at all grumpy.. I am just asking for the reason behind things.. I wont know if I don't ask. Michelle

Posted by JD
USA
5 posts

Expecting things to be like the US is not the same thing as asking a question. Your name is listed as the topic started more than any other name on the forum. This is a question for travelers, not just any question that pops into your head. Before posting a question try Googling first.

Posted by Andrea
Sacramento, CA
4875 posts

He never accused you of being grumpy. I do agree with him though. You have asked a series of questions comparing Italy to the U.S., or more specifically Florida and the area around Disney World. In these various threads you have indicated that the way things are done here are somehow superior to how things are done in Italy. Everyone is entitled to their own opinion, but going to a foreign country and questioning their way of doing things is not going to make you any friends. Imagine it happening in reverse. You say you are just trying to understand. What you should understand is that you are going somewhere with customs that are different than what you are used to. You can fight it and insist that your way is better, or you can just accept it, relax and enjoy the differences. If you insist on things being just as they are at home, then why travel at all?

Posted by Bob
Bristol, UK
279 posts

There is a rather simpler explanation for the European VAT arrangements. No VAT is charged on exports. If you buy a BMW from your local dealer, you do not pay German VAT. If you want to buy a piece of Italian glass, then no VAT is charged, provided you carry it with you when you leave, or the vendor sends it to your U.S. address. However, VAT is payable on anything you consume while in Europe (accommodation, food, etc), or which you might give away or sell. The only way for this to be administered is for you to declare that you are exporting something and claim a refund on the VAT you have paid.

Posted by Michelle
Valrico, FL, USA
120 posts

nobody said America way is better.. I am just asking.. and I don't have any problem talking to people from other places that come here and explaining how and why we do certain things a certain way.. I find it interesting.. Very much the opposite that you accuse me of.. I welcome people inot my area all the time.. From Disney area and peope; that come off the cruise ships in POrt Canaveral

Posted by Douglas
Oak Park, Illinois
2391 posts

Harold's post was right on. The impression you were giving, even if you didn't intend to, was that Europe wasn't doing enough to make life better for waiters, Roma, etc... Your questions to me had a ring of "Why are they doing it that way? Why aren't they doing more like in Florida?"

Posted by Frank
Tresana, Highlands Ranch, CO, USA
10884 posts

I would agree also. That is the problem with conversations on the web - it is one dimension - no body language, no expression, no sentient statements. Only the written word and sometimes the word is not well written.

Posted by Michelle
Valrico, FL, USA
120 posts

it really doesn't matter.. I have the right to ask anything I want.. I am well aware they do stuff differently in Europe.. I often argue that we should be more like them with education, public transportation and health care. SO for me to ask why do you tax the tourist so little is hardly an insult.. Now I will just wait here for some conservative to accuse me of being a socialist.. I am sure I can't win here either way with some people. If you don't ask you don't know.