VAT refunds depend on what you bought, where you bought it, and which country's VAT system applies to you
The amount you get back is not a fixed percentage. VAT (Value Added Tax) is charged at different rates depending on the item category and the country where the purchase happened. In most European countries, standard VAT ranges from 17% to 27%, but reduced rates of 5% to 10% apply to groceries, books, medicine, and children's clothing. Some items—like postage stamps or certain financial services—are VAT-exempt and generate no refund at all.
If you are a visitor to a VAT country and bought goods to take home, you can reclaim the VAT you paid at the point of sale. The refund amount equals the VAT portion of the price you paid, not the full purchase price. For example, if you bought a €100 item in a country with 20% VAT, the VAT portion is €20, and that is what you can reclaim—not the full €100.
The actual refund you receive is often less than the VAT charged because refund companies and customs authorities deduct processing fees, which typically range from 10% to 25% of the VAT amount. A €20 VAT refund might net you €15 to €18 after fees.
Key Takeaways
- VAT refund amounts are calculated as a percentage of the purchase price, with rates varying by country (typically 17% to 27% standard rate) and by product category (reduced rates as low as 5%).
- You can only reclaim VAT on goods purchased as a visitor, not on services, and only if you meet the store's minimum purchase threshold, which varies by retailer and country.
- Processing fees charged by refund companies reduce your final payout by 10% to 25% of the VAT amount, so the money you receive is less than the tax you paid.
- The refund is calculated on the VAT portion of the price alone, not on the full purchase amount.
- Some product categories are VAT-exempt or taxed at zero percent, meaning no refund is available regardless of where you bought them.
How VAT rates differ by country and product type
Each country sets its own VAT rates within EU rules or its own national system. Standard rates in Europe range from 17% in Luxembourg to 27% in Hungary and Denmark. The United Kingdom charges 20%, France 20%, Germany 19%, and Italy 22%. Outside Europe, countries like Canada use a Goods and Services Tax (GST) at 5%, while Australia charges 10% GST.
Within each country, reduced rates apply to specific categories. Most countries tax groceries and basic food at 5% to 10%, children's clothing at 5% to 10%, books and newspapers at 5% to 10%, and prescription medicines at 0% to 10%. Luxury goods like jewelry, electronics, and cosmetics are usually taxed at the standard rate. Restaurant meals, alcohol, and tobacco often face higher or standard rates with no reduced option.
Some items carry zero VAT or are exempt entirely. These vary by country but commonly include postage, insurance, financial services, and certain medical equipment. A zero-rated item generates no refund because no tax was charged in the first place.
Minimum purchase thresholds that trigger a refund
Most countries and retailers require you to spend a minimum amount in a single transaction before you can claim a VAT refund. This threshold varies widely. In France, the minimum is typically €100 to €175 per transaction. In Germany, it is often €50. In the United Kingdom, it is £30. Some stores set their own higher minimums—luxury retailers may require €200 or more.
The threshold applies to the pre-tax price or the total transaction value depending on the country and retailer. Some systems count only the VAT-taxed items toward the minimum, excluding VAT-exempt goods. Always ask the store what their specific minimum is before you shop, because falling short means no refund is possible.
If you make multiple purchases at different stores, each transaction is usually counted separately. Combining receipts from different retailers to reach the minimum is not permitted in most systems, though some airport refund desks may combine purchases made on the same day at the same airport.
How refund companies calculate their fees
When you use a refund service like Global Blue, Planet, or Innova Tax Free, they deduct a commission before sending you money. This fee is not set by the government—it is the company's charge for handling the paperwork, processing the refund, and transferring funds to you. Fees typically range from 10% to 25% of the VAT amount, though some companies charge a flat fee per transaction instead.
A €50 VAT refund with a 20% fee leaves you with €40. The same €50 refund with a 15% fee leaves you with €42.50. The fee structure is usually printed on the refund form or posted at the point of sale, so you can calculate your net refund before you commit to using that service.
Some retailers offer cash refunds at the airport or point of sale with lower fees (sometimes 5% to 10%), while others require you to mail in forms or use an online portal, which may carry higher fees. Instant refunds at the airport are usually more expensive than waiting for a bank transfer, which can take 4 to 12 weeks.
Refund amounts for common purchase categories
| Item Category | Typical VAT Rate | Example: €100 Purchase | VAT Refund Before Fees |
|---|---|---|---|
| Clothing (adult) | 20% | €100 item | €16.67 to €20 |
| Electronics | 20% | €100 item | €16.67 to €20 |
| Cosmetics | 20% | €100 item | €16.67 to €20 |
| Children's clothing | 5% to 10% | €100 item | €4.76 to €10 |
| Books | 5% to 10% | €100 item | €4.76 to €10 |
| Groceries | 5% to 10% | €100 item | €4.76 to €10 |
These figures show the VAT portion only, before refund company fees are subtracted. The actual money you receive will be lower. For instance, a €20 VAT refund on electronics with a 15% fee becomes €17 in your pocket.
What affects the final amount you receive
The refund method you choose directly changes how much you get. Airport cash refunds are fastest but carry the highest fees, sometimes 20% to 25%. Bank transfers take longer (4 to 12 weeks) but may charge only 10% to 15%. Credit card refunds are often the cheapest option at 5% to 10% but require you to wait and may not be available for all transactions.
Currency conversion also reduces your refund if you are converting from euros or another currency back to your home currency. Refund companies apply their own exchange rates, which are usually less favorable than the mid-market rate. A €100 refund converted to US dollars might cost you 2% to 3% in conversion markup on top of the processing fee.
The country where you claim the refund matters too. Some countries have streamlined systems with lower fees, while others have more complex processes that increase costs. Refunding at the airport in the country where you shopped is usually simpler than mailing forms back later, though it costs more in fees.
When you cannot get a VAT refund
Services are never refundable, even if they are taxed. Hotel stays, restaurant meals, tours, transportation, and entertainment cannot be reclaimed as VAT refunds, regardless of the rate charged. Only goods—physical items you take with you—may have access to.
Items you consume or use before leaving the country are ineligible. If you buy a meal and eat it at the airport, or purchase a SIM card and use it during your trip, you cannot claim those. The goods must be unused and in their original condition when you leave.
Residents of the country where you shop are not may have access to to VAT refunds. You must be a visitor from outside the EU (or outside the country's VAT zone) and have a valid passport or travel document to prove it. Some countries also require that you do not work or study in that country.
Items purchased for business use or resale do not may have access to. If you are buying stock for a shop or materials for a business you operate in that country, VAT refund schemes do not apply—those transactions fall under business VAT rules instead.
Frequently Asked Questions
Can I combine purchases from different stores to reach the minimum threshold?
No, in most systems each store transaction is counted separately. However, some airport refund desks allow you to combine receipts from multiple shops purchased on the same day at the same airport. Check with the refund service desk before you leave the airport to see if they offer this option.
What is the difference between the VAT rate and the refund amount?
The VAT rate is the tax percentage charged on the price (for example, 20%). The refund amount is the actual euros or pounds of tax you paid, calculated from that rate. On a €100 item with 20% VAT, you paid €20 in tax, so your refund before fees is €20, not €100.
Do I get the full VAT amount back or does the store keep part of it?
The store does not keep the VAT. A refund company deducts a processing fee (10% to 25% of the VAT), and the rest goes to you. The government does not take a cut—only the refund service company does.
Can I claim a VAT refund on a hotel stay or restaurant bill?
No, services including accommodation, meals, and entertainment are not may be able to access for VAT refunds. Only goods—items you purchase and take with you—can be reclaimed.
How long does it take to receive a VAT refund?
Instant cash refunds at the airport arrive immediately but charge the highest fees. Bank transfers take 4 to 12 weeks and charge lower fees. Credit card refunds vary by company but typically appear within 2 to 8 weeks.