How to Claim a VAT Refund

Have you traveled to Europe? Have you gone shopping in Europe? If the answer is yes to both of those questions, I bet you have left free money on the table when you left the continent. I’m talking about the European Union value added tax (VAT).

Depending on the country you’re in, VAT can range from 17 percent to 27 percent. The tax is charged by businesses and is included in the price of merchandise.

I was in Iceland in January and went a little nuts at a winter-wear store. Although Iceland is not a member of the E.U., the country implements value-added tax on its goods. Unfortunately, VAT added to hotel stays, restaurant tabs or groceries does not qualify for reimbursement.

There are a few restrictions for getting VAT reimbursed in Iceland:

  • Each purchase must be at least 6,000 Icelandic Kronas (about $50) to qualify for a tax refund, meaning multiple receipts from multiple retailers do not qualify even if they add up to the required amount.
  • You must be a permanent resident overseas, so make sure to bring your passport with you while shopping.
  • Products must leave the country with you within three months from the date of purchase, so you might have to show it to a clerk with your receipt upon departure.

Most European countries impose similar restrictions, but the minimum purchase is different for each country. You can always ask a cashier if your purchase qualifies for a VAT reimbursement.

My purchase of Icelandic wool products was large enough to qualify for a VAT refund. Once I paid for the merchandise, a cashier provided me with a receipt and an envelope with instructions on how to get the tax reimbursed.

Once I arrived in Keflavík International Airport, the process was simple. The window that processes VAT refunds was located past security. I recommend adding a little extra time if you plan on finding a window at your departure airport as they’re not always easy to find. A woman asked me whether I wanted a refund in cash or back to my credit card. Since I had little need for local currency at departure time, I asked for a refund to my credit card. I provided the numbers, and that was it.

Six weeks later I saw $18.11 in my account from Tax Free Worldwide. Upon Googling the company, I learned it is an international financial service company that specializes in VAT refunds for tourists and retailers. The original purchase was $139.79, so that’s almost 15 percent back on my card for a few minutes of my time. (I think the service takes a little cut as well.) It’s especially worth it when your overseas purchases are significant.

Have you ever received a VAT refund? If so, in what country and how much did you save?


  1. I too did a refund from Iceland a couple of months back using Global Blue. It took 3 working days to a UK bank account rather than 6 weeks. Processing times are very dependent on method of payment and the agency used.

    1. Wow, three days is much faster than six weeks! I wonder if they use different agencies depending on the country where a credit card is registered… Thanks for sharing your experience!

  2. In South Africa, they give you a MasterCard on the spot with the refund loaded. You can use it at an ATM, but there are some healthy charges. Otherwise, it’s like a prepaid card BUT you cannot use it on internet purchases, restaurants and some other restrictions. Since Costco takes Visa and online purchases are out, I’m forced to get my refund back through the local grocery.

    1. That is interesting! I’m going to South Africa in a couple of months. How much money do you have to spend per receipt?

  3. My wife and I recently returned from London on BA from London City Airport. There is no VAT desk or facility there. My wife mailed her receipts to the agents, but without the stamp by a VAT clerk. We are not hopeful that she will receive her money back.

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