The VAT Refund Game

In all the years I have been traveling I have never tried to get a VAT tax refund.  I was spending so little anyway it wouldn’t have been worth the time commitment to make it pay, as far as I was concerned.

A VAT (value added tax) is used throughout Europe as a form of sales tax added to some merchandise and goods sold in the European Union.  It is a requirement that businesses collect this money and send it along to their governments.

If you are not a member of the EU you may be entitled to a refund of the monies collected.  There are procedures to follow; paperwork that needs to be filled out and stamped and then avenues for you to receive your money back.

Here is where the tricky part comes in.  The refund of monies can be different in every EU country.  Some countries will refund your money at the point of sale; some are going to use a third party refund company but most often you will get your refund at the airport on your way out of the EU.

First, you need to choose a shop that operates the VAT Retail Export program. Look for a Tax Free Shopping sign. It’s a voluntary scheme and not all shops operate it, so you need to check before you buy anything.  If you find a shop that does take VAT and refund it you will need to get VAT form 407 from them.

You need to fill in the form when you make your purchases, in front of the retailer. The retailer will ask to see evidence that you are eligible to get a refund and that you live in a country outside of the EU (like your passport).

You also need to agree with the retailer how your refund will be paid. Some retailers will pay you the refund directly, others will operate through a refund company, and some will have an arrangement with a refund booth at the point where you leave the UK or the EU completely.  If you are traveling from one EU country to another get all of your forms stamped in each country.  The rules state that you must leave the EU within a 3 month period in order to file for a VAT tax refund.

Not all retailers and businesses collect VAT so therefore you might not be entitled to a refund.  Businesses which make less than 81,000 Euros do not have to register for VAT.

You may not get all the VAT back anyway. The retailer or refund company may access you a fee to cover the cost of doing the paperwork for you. If they do, this will be deducted from your refund before you receive it.  The cost of this fee will be shown on your refund form.  It was always at this point that I realized standing in line for anything less than $20 just wasn’t worth my time.

There are some goods which you don’t pay any VAT on and most of them come under the heading of souvenirs, like:

• basic food items
• books, newspapers and magazines
• children’s clothes
• equipment for disabled people

Countries in the EU also have different rates that they charge for VAT, they are not all the same.  The sales price you will see listed in every location however will include the VAT tax.  You would have to ask how much the VAT tax was in order to claim it.  That is why you must do the paperwork with the retailer while you are in their store.

Other countries besides the EU charge a VAT tax.  In Australia the VAT in 2010 was at 10%.  In Canada there is a goods and services tax that was introduced in 1991 and is set at 5 percent. Products that are not subject to the tax include basic groceries and certain prescription medicines. They have had a VAT in Mexico since 1980 and the current rate is 16%.  Products that have no VAT tax added are books, medicine, and food.

When someone charges you VAT they multiply their selling price by the VAT rate to calculate the amount of VAT to charge. They then add the VAT amount to the net price.

What I have never understood is this; if I don’t have to pay VAT as an American and I can get a refund by just showing my passport why do I have to go through the hassle of getting a refund?  Just deduct the VAT amount when I make my purchase immediately at the point of sale.  I know what you are thinking; the governments of all these countries are making a fortune on people who don’t bother to stand in line to collect any refund under $100.  In 2009 for instance they collected over 783 billion in VAT taxes all over the EU.  Not all of those monies would be refundable of course.

I still won’t be trying to get a VAT Tax refund. We just haven’t spent enough to make it necessary to stand in line.  However if you are a high end traveler and you spend lots of money buying things and either flying them home or having them shipped; 1. We should be friends and 2. You should spend the time having an agent get you your refund.

Happy Shopping.

Florence Lince

http://www.about.me/florencelince

 

Get Our Immunizations

Or This Won’t Hurt a Bit

Some of the documentation I carry with us are our immunization cards that we received from the Center for Disease Control back in the US.  Listed on it are the vaccines we have both gotten and the dates of those shots.

Mike and I do not have ‘regular’ health care coverage and neither of us qualifies for Medicaid.  Medicaid does not pay for immunization shots so we have paid for them all out of pocket.  When we visit family in CA we travel to the CDC office (the Pasadena Public Health Department) and we get any new doses of vaccines that we need.

I am way more susceptible to catching things or in being bitten by bugs than Mike so I tend to get more of the shots.  The reason I carry our immunization cards is that some countries can actually stop us from entering their country without this proof in hand.  I have carried our cards through every border crossing we have gone through and luckily no one has asked to see them, but I have them just in case.

I also look on the list of countries that we want to live in and see what shots might be recommended.  Most shots listed for every country are merely ‘recommendations’ but getting the shot and perhaps heading off some future health issue or crippling disease is worth the expense, at least to us.

For example, one of the countries that we would like to live in is Thailand.  The most highly recommended shot for visiting there is the Japanese Encephalitis shot.  Since we try to live in a country at least 3 months, with a goal of staying 6 months, many health ‘warnings’ exist for those traveling to a certain place for 30 days or less.  If you plan to spend more than 30 days in any one location getting the shots is strongly ‘advised’, and could be the difference in you being allowed to enter the country or not.  Japanese Encephalitis is spread via a mosquito bite and the repercussions can be deadly so it really isn’t worth it to me to skip the shot.  The issue for us, since we don’t have health insurance, is that this one shot currently costs $453.00 in the US, which is way too steep a cost for me.  Since we won’t be traveling there any time soon I am on the hunt for a country where I can get the shot and where the cost might be way cheaper.  To assist me there is the International Society of Travel Medicine. This website lists locations of medical facilities around the world where getting verified doses of vaccines is suggested (a handy resource for anyone who travels outside of the US).

Some countries do not care if you are coming to them via the US where many of the diseases people need shots for are not endemic.  However since Mike and I are traveling from location to location and the US is not our base they check our passports more closely to ensure that we haven’t come from a country or a location that is at risk.  For example, the government of Thailand requires proof of yellow fever vaccination only if you are arriving from a country with risk of yellow fever. This does not include the US. If you are traveling from a country other than the US however, they have a list of the countries where having the yellow fever vaccine would be a requirement. The CDC website is therefore bookmarked on my internet since it is a very handy resource.

The next country on our list to live in is Spain and travel there requires only the basic vaccines. These include measles-mumps-rubella (MMR), diphtheria-tetanus-pertussis vaccine, varicella (chickenpox) vaccine, polio vaccine, and your yearly flu shot.  What changes between Spain – Hungry – Romania is that having the Hepatitis A shot is strongly recommended in both Hungry and Romania.  I’ve had both Hep A (two shots) and Hep B, so I should be good to go. Many of the immunizations we have received should protect us anywhere from 10 to 20 years which is plenty of time for us to finish all of our travels.

For many people who are simply vacationing outside of the US getting some of these shots might be overkill.  For travel to areas that are more prone to infections it would be strongly advisable to make sure your vaccines are up to date.

There are a lot of issues with long term travel, some that people overlook or completely forget about.  This issue for us is foremost on our minds as we travel from country to country.  We are all in favor of seeing the world; we just want to make sure the only thing we take back to the US with us, is our memories.

Florence Lince

http://www.6monthers.com