Warning, I think this will turn into a mini rant about taxation…
So talk on the DIS thread whipped through VAT and I am a bit perplexed… We can get money back if a purchase is over a certain amount – and it might take 2 months best case – but one person on the WWW stated 18 months to get a refund! ?! Really? What’s with that? And Dude, seriously I hope that the refund was worth it!! Oh, and, is it if all purchases add up to that amount, or is it purchase by purchase? Store by store? Are there certain stores? I am way out of my element here… I guess I need a VAT for dummies book… I guess I need to give my co workers in our Global offices a call and get the scoop… Sounds confusing, yes? Well thanks to the WWW I was able to clear it all up (NOT)…
Anyway, I did some reading and searching on the WWW and these little tidbits come from others - I'm sorry - no links here. What did I read somewhere else? Oh yeah its my blog take it or leave it... And I don't participate in the Scheme called VAT, so no need to send me anything... Oh - and why is it a scheme anyway? Whats the deal with that?
So, what is VAT? America, where sales tax is (mostly) a state-by-state phenomenon that gets added on at the cash register, in Europe sales tax is included in the price tag . That is nice, in that there's no math to do in your head, but it's awful for two reasons. One is that the tax rate—universally called VAT (for "Value Added Tax") though each country also has its own acronym—tends to be anywhere from 4% to 33% . (The E.U. is supposed to eventually settle on a common rate of around 18%, but it's already years past the original implementation date of that plan.) The other bummer is that you end up paying this VAT automatically, even though, as a tourist, you are not obligated to pay the VAT . Now the good news. Since non-E.U. residents technically do not owe VAT, a system has been set up to refund these ill-gotten taxes to you. Now for some more bad news, the refund system doesn't kick in it unless you drop a big chunk of change all at once in one store. This amount ranges from as low as £30 ($50) in the U.K and $80 in Belgium to €154.94 ($200) in Italy and €175.01 ($230) in France (and it's always the amount before taxes are counted). The actual amounts in each country—as well as lots of VAT shopping advice—are listed at the website of Global Refund (www.globalrefund.com). Barcelona is 16% folks…
And now the ever loving REFUND process… Getting the VAT refunded involves telling the store clerk you're going to be asking for the VAT back (they'll give you receipts and forms to carry with you) then filling out more forms at the airport.
Leaving Barcelona via cruise, car or train? If you are not leaving Barcelona by plane the reclaim procedure is a little different because you cannot cash your VAT refund cheques in Barcelona. If you are leaving Barcelona by any other means of transport ask for a VAT Reclaim envelope in the shop in which you buy your goods. The Spanish name for this is "Sobre" You then collect your VAT cheques as normal from the shops. Before you leave Barcelona e.g. on your cruise you have to visit the customs at the port terminal (or wherever the customs point is for you departure from Spain) and present them with your VAT cheques and they will stamp them for you. You must do this before you leave Europe. When you return to your country send the cheques back to the VAT claim office in Madrid in the Envelope that you picked up from the shop/s. Unfortunately if you are not actually flying out of Barcelona you cannot just go to the airport and cash your cheques. The cashing of the VAT cheques in Barcelona is a service only available for those that leave Barcelona by plane. When you send back your VAT claim you have a number of options for obtaining your money. You can opt to receive a cheque, or choose a bank transfer or wire. These options are available on the form that you send back to the VAT reclaim office. It's best to opt for the direct transfer to your account as most banks charge a substantial fee for cashing international cheques - around 30 Euros in Spain. It will take approximately 3 months to process your claim and for you to receive your refund. You follow the same procedure as for the cruise if you are leaving Spain by any other means e.g. train or car. But in these situations your cheques are stamped at the customs office before you leave Spain.
Summary
You are entitled to claim a VAT refund on goods purchased in Spain if you meet the following criteria
1) Your domicile (permanent residence) is outside the European community)
2) You spend more than 90.15 Euros on your items
3) You intend to take the items back to your country. This therefore excludes restaurant and hotel bills and general food.
4) You have all the correct paperwork completed - this is provided by shops that run the Tax Free Shopping Scheme - look for their logo in the shop window or ask in the shop (some shops do not run the tax free scheme)
5) You follow all the procedures detailed above in our article for claiming your VAT back before you leave Spain.
6) If you have any more detailed questions on Tax free shopping visit their website and postquestion directly. They have people that can respond to you in English.
Bottom line here, I think, is that one has to shop in the right stores, bulk purchases together so you meet the minimum and then make sure you get the checks and forms before you leave. Weird, one would think you could fill out a form at the store and avoid the checks all together.
Happy shopping or not…
