Shopping is a major motivation for many international travelers. In Europe, the possibility of recovering VAT on certain purchases can represent savings of up to 22%, attracting millions of visitors every year. But beyond being a simple financial advantage, tax-free shopping plays a crucial role in making European destinations attractive and in boosting local commerce.
1. Why does tax-free shopping attract so many travelers?
Europe is a global reference when it comes to fashion, luxury, and craftsmanship. Thanks to tax-free shopping, certain traveler profiles are particularly encouraged to shop on the continent:
- Chinese and Middle Eastern tourists devote a large part of their budget to shopping, especially in luxury stores.
- American travelers often find more competitive prices in Europe, particularly on European brands.
- Non-European expatriates take advantage of their stay in Europe to make tax-free purchases before returning home.
Concrete example: immediate financial gain
A tourist buys a luxury handbag in France for €1,200 (including tax).
- The VAT included is €200 (20% of the price).
- With the tax refund, the final price after reimbursement is €1,000 instead of €1,200.
This mechanism directly influences purchasing decisions and encourages tourists to choose Europe over other destinations.
2. A powerful economic engine for Europe
The weight of tourist shopping
Shopping is an essential part of international visitors’ spending:
- In Paris, 50% of sales in certain large department stores are made by foreign customers.
- In Spain, tax-free shopping is an important source of revenue for upscale shopping areas.
- In Brussels, luxury brands rely on international buyers for a significant share of their turnover.
An asset for retailers and the attractiveness of European cities
Physical stores benefit directly from this system, which enables them to attract more international customers. Many shopping centers and commercial districts have become destinations in their own right.
Concrete Example: The luxury outlet La Roca Village near Barcelona, generates several hundred million euros per year, largely thanks to foreign visitors taking advantage of tax-free shopping.
3. Tax-free shopping in Europe facing global competition
Other regions around the world offer similar systems to attract international shoppers:
- Dubai, Singapore, Japan, South Korea: tax exemption with simplified procedures.
- United States: no national VAT, but local taxes that are not refundable.
- United Kingdom: tax-free shopping was removed in 2021, leading to a drop in tourist purchases.
Europe remains competitive thanks to its iconic brands and relatively high VAT rates, which make tax-free shopping particularly appealing.
4. Which European countries are most advantageous for tax-free shopping?
VAT rates and minimum spend thresholds vary from one country to another, affecting the attractiveness of tax-free shopping depending on the destination:
- France: 20% VAT, minimum purchase of €100.01
- Spain: 21% VAT, no minimum purchase
- Italy: 22% VAT, minimum purchase of €70.01
- Belgium: 21% VAT, minimum purchase of €125.01
5. A digital transformation revolutionizing the sector
For years, tax-free shopping was managed by traditional operators, forcing travelers and retailers into a cumbersome administrative process. Today, new digital solutions simplify the experience:
- A paperless process, eliminating in-store paperwork.
- End-to-end support, ensuring fast and error-free refunds.
- Time saved for retailers, who can focus on sales rather than paperwork required by traditional operators.
- Tax-free shopping for online purchases, a key innovation that broadens access to the system.
Moving toward digitized tax-free shopping streamlines the experience for travelers and for retailers, who benefit from a more fluid and efficient service.
6. An underexploited lever with high potential
Among the 150 million non-European travelers who visit EU countries every year, only about 20% take advantage of the VAT refund. This low rate is mainly due to a lack of awareness about the system and the perception of a complex administrative procedure.
Moreover, in less touristy areas, many visitors encounter retailers who do not offer this service or are unaware of it.
Yet, thanks to modern solutions, VAT refunds are now simpler and faster. With better awareness and streamlined procedures, tax-free shopping could play an even bigger role in Europe’s tourism economy and strengthen the continent’s competitiveness in the face of global competition.
7. Zapptax: simplified tax-free shopping for all your purchases in Europe
Despite the advantages of tax-free shopping, many travelers give up on it because of complex paperwork and a lack of guidance. This is where Zapptax revolutionizes the process by making it completely hassle-free.
With Zapptax, there’s no need to fill out paper forms or rely on traditional in-store systems. Everything is done digitally, in just a few simple steps and in any store:
- Shop in-store or online at any retailer in France, Spain, Belgium, or Italy. With ZappTax, all merchants can now offer tax-free shopping, even in less touristy areas.
- Request an invoice in the name of Zapptax directly in the store or from the e-commerce site.
- Upload the invoice to the app and follow the instructions.
- Validate your tax-free form before leaving Europe by scanning it at the self-service kiosks or having it stamped by customs.
- Receive your refund quickly in your bank account or via PayPal, with one of the best refund rates on the market.
Zapptax takes care of everything—so all you have to do is enjoy your purchases!