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Anyone whose main residence is outside the European Union has the right to a VAT refund. Buyers can request a VAT refund on any purchase made in the EU and taken home, in their luggage, to their country of residence.

Surprisingly few people are aware of this profitable option. In order better to understand the ins and outs of VAT refunds, ZappTax is happy to offer this straight-forward explanation based on official texts.

I. VAT refund: Official definition and legislation explained

Definition by DGDDI

The French Directorate General of Customs and Indirect Rights (DGDDI) describes VAT refunds much as we have above:

“The traveller whose domicile or habitual residence is not in France or another Member State of the European Union can buy goods for export exempted from paying the value added tax (VAT) or benefit from a refund of this VAT. ”

Note that this definition is essentially the same across all the Member States of the European Union.

So why, as a non-EU resident, do you not have to pay VAT?

The legal basis for VAT refunds can be understood if you look at how VAT works.

On its website, the European Commission states that “in the European Union, value added tax, or VAT, [...] more or less applies to all goods and services bought and sold in order to be used or consumed in the European Union. Thus, goods sold for export [...] outside the EU are normally not subjected to VAT.”

Thus goods purchased in the EU but then taken with you in your luggage for consumption or use in your country of residence outside the EU are not subjected to VAT.

If a vendor sells products VAT-free to non-EU residents, there is no guarantee these products will actually leave the EU. The regulations therefore provide for the exemption to be applied in the form of a VAT refund after the buyer leaves the EU, since carrying the purchase in your luggage is “proof” of export.

II. What qualifies you for a VAT refund?

In order to claim a VAT refund on your purchases, you must meet certain conditions.

1. You must reside outside the European Union

You can claim a VAT refund only if you live in a non-EU country. This is independent of nationality. A French expatriate in Bangkok will therefore be eligible for a VAT refund, but an American residing in Italy will not. A person of Chinese nationality residing in Paris is also ineligible for a VAT refund when travelling outside the EU.

2. A minimum purchase threshold to claim VAT refund is set by each country

While VAT refunds are allowed across the European Union, each member state is free to set a minimum purchase amount in order to claim a VAT refund. Depending on how the VAT refund on your purchases is obtained (see below), this threshold is applicable per store and per day (which is very restrictive) OR it is applicable on all the purchases made during your stay.

3. You must leave the EU before the end of the third month following the month of purchase

Most countries will only refund VAT if you leave the EU with your purchased goods and obtain customs validation of your tax-free form no later than the last day of the third month following the month of your purchase. Note that some countries, such as France, require that your stay in the EU be shorter than six months.

4. You must leave the EU with all the goods on which you want to claim the VAT refund

In order to get your VAT refund, you must take purchased goods out of the EU with you in your luggage. If these goods remain in the EU, you cannot claim a VAT refund on them. Note that these goods must be unused and in their original packaging when they leave the EU.

III. How can you shop tax-free in the EU?

You have two ways to shop tax-free:

  • The traditional system is to have VAT refund provided by the vendor, most often in collaboration with an intermediary called a “tax-refund operator”. {tax vocabulary article link}. Since shop owners are not obliged to offer VAT refunds, most don’t.
  • The easy, government-approved ZappTax system, which simplifies the VAT refund process and can be used when shopping in any store in France, Belgium, or Spain.

Whatever system you choose, there are some important steps that you will need to follow before, during, and after your purchase if you want to claim a VAT refund. Everything is explained below in detail for the two scenarios.

Tax-free shopping using the traditional system: explanations and limitations

When shopping in the European Union, request an export sales slip (also known as a tax-refund form) from the merchant at the time of payment. Keep these slips (printed in hard copy) for the duration of your stay and, when leaving the EU, have them validated by customs. Once your documents have been validated, you will receive your VAT refund (minus the commissions and any exchange costs and other management fees) a few weeks later.

This system has several limitations:

1.  Merchants are not obliged to offer you a VAT refund.

Not all stores where you shop will provide you with the slip you require. In fact, fewer than 15% of France’s 600,000 retail businesses offer a VAT refund service!

2.  With very few exceptions, it is not possible to shop tax-free online.

Offering VAT refunds online presents a number of regulatory and operational  challenges for e-merchants, so it’s a service few online vendors offer.

3.  A minimum purchase is required before a vendor can issue a tax-refund form.

Since the traditional system requires each store to issue you its own tax-free form, you’ll need to meet the national minimum purchase threshold in each store where you want to get a VAT refund.

4.  The commission fees are substantial.

In the traditional system, your VAT refund is never 100%; this is because a commission fee is charged by tax-refund operators and/or vendors. In the end, around70% of VAT is refunded on average.

5.   Lack of customer support in the event of a problem.

Traditional tax-refund operators don’t offer 24/7 customer support. They can be difficult to reach because of limited communications methods, and they are not always available when problems arise. If something goes wrong, you might lose your VAT refund just because no one was able to help you in time!

For all of these reasons (and more), VAT refunds are a benefit that very few travellers to the EU take advantage of. And that's where ZappTax comes in.

In 2017, the two co-founders of ZappTax (both residents outside the EU and therefore eligible for VAT refund) devised an innovative system that overcomes almost all the problems of the traditional VAT refund system. This new approach, approved by the tax and customs authorities, works differently.

Tax-free shopping with ZappTax: process and advantages

As with the traditional system of VAT refund, you will need to request a specific document while shopping. But with ZappTax, instead of a tax-refund form, you simply ask at the time of payment for an “invoice including VAT in the name of ZappTax”. All merchants are legally obliged to issue such an invoice on request. All you need to do is take a photo of each invoice and upload it to the ZappTax application, available as a free download on the Google Play Store and Apple App Store.

Once you are done shopping, ask the ZappTax team to generate your tax-refund form. This will be sent to you by email and stored for retrieval at any time in your ZappTax app account. You will need to validate this tax-free form (in France and Spain, directly from your smartphone at a self-service terminal; in Belgium, by showing your passport to the customs officer) when leaving the EU. Your refund is guaranteed once your tax-free form has been electronically validated (or once you have uploaded a picture of your stamped tax-free form).

In the event of problems or if you just have questions, our team is available 24/7 via in-app chat, email (, phone, or social media.

ZappTax is the answer to all of the problems with traditional tax-free shopping With ZappTax, you can:

1.  Shop tax-free at any store...

VAT refunds are something a merchant may choose not to provide, but they are legally obliged to issue an invoice when requested by a customer. ZappTax makes VAT refunds possible everywhere!

2.   ...Even online!

Nothing could be as simple as requesting an invoice on an e-commerce site, right? You can now shop tax-free online, provided the merchant has a European VAT number.

3.   Shop without a minimum purchase threshold per store per day.

Since ZappTax generates the tax-refund form post-purchase, you no longer have to reach the minimum threshold per shop and per day. You just need to pass this minimum threshold for the total amount of purchases during your stay.

4.   Get fast refunds at a better refund rate.

ZappTax offers you a fast, progressive refund: within 24 hours, you can recoup up to 90% of your VAT! The more you buy, the more you save.

5.   Count on us 24/7 to help you throughout the process.

Because no one should miss out on their VAT refund due to a customs problem, the ZappTax team is available 24/7.

While tax-free shopping is a great and profitable option for non-EU residents, the process is complicated and cumbersome. ZappTax has made it its mission to facilitate the VAT refund process so that everyone who is eligible can take full advantage of their right to save.

If you still have questions about VAT refunds or the ZappTax app, click on the bottom right icon. A ZappTax specialist will get back to you shortly!