Twenty percent on $100 is $20. A simple idea, but when shopping we
forget how much goes towards taxes.
Value Added Tax, or simply VAT is similar to sales tax in the United
States. This tax is applied at all stages of manufacture, or when value
is added (hence the name). VAT varies throughout Europe, but it can
range from 10 to 20 percent or more. The European Union (EU) is in the
process of harmonizing the tax rate among the Euro nations, and then among the
rest of the EU members.
As a visitor to the EU, you are entitled to a VAT refund on your purchases
that you take out of the EU. The only thing you have to is look for the Global
Refund Tax
Free Shopping stickers on the shops' window. Many stores
have have require you to spend a minimum amount of money before they will
provide the appropriate forms.
Insist on getting the VAT refund forms before you shop. Ask about the
minimum so you're not surprised at the cash register.
At the point of departure (in our case this year, Prague), look for the VAT
refund area. Lines are typically long, so plan to spend an hour or more
waiting. The officials will want to see the tax refund form, the sales
receipt, and in many cases, the items you purchased. If you want tax
refunds, keep the items in your carry-on luggage where it can be easily
reached.