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VAT refund policy in Europe

Hi All,

I would like to know about the VAT refund policy on goods in Europe.

My friend is currently working in Budapest, he will soon be leaving from budapest and his work permit will be cancelled.

If he buy some product, can he later ask for the VAT refund at the airport. Will he be applicable for VAT refund.
If yes, how many product can he buy and claim for VAT refund.

Any help and suggestion will be highly appreciated.

Regards,
Manmeet Singh

Hi Manmeet,

Assuming the rules are EU rules (so similar to the UK), the rules here are:

First thing you need to be aware of, is that the scheme only applies to goods being exported from the EU and they must have been purchased no more than 3 months before the date of export to qualify.  The goods have to be exported to a non-EU country and you have to prove you will be outside of the EU for 12-months; you also have to pay the VAT up-front.

When you buy the goods, you have to inform the retailer that you intend to export them and reclaim the VAT, they will (should) provide you with a form for the export which you have to get stamped by Customs on departure, send it back to the Tax authority in the country where you bought the goods once you have landed and they send you a cheque in the post.  The goods that qualify under the scheme are:

1.    Services eg hotel bills and car hire.
2.    Goods bought online or by mail order.
3.    Un-mounted gemstones.
4.    Consumable goods you have already started using.
5.    Goods which require an export licence (except antiques).
6.    Goods worth over £600, being exported for business purposes.
7.    Goods to be exported as freight.

These goods must be exported within your hold or hand luggage.  There is no guarantee
that you will not be re-charged duty on arrival in your new destination outside the EU.

I'd recommend your friend contacts the Customs authority in Hungary and in the country where he is going to confirm the rules there.

Hope this helps.

Thank you for reply.

My friend is having schengen visa one time entry visa for hungary. He is purchasing few things. Like iphone, DSLR and laptop.
1. Can he get the VAT refund on all of them?

2. He will be leaving europe from vienna, but things are purchased from hungary. Can he get vat redund from vienna airport.

3. Is there any helpline number for vat refund?

Thank you in advance
Manmeet Singh

manmeet27 :

Thank you for reply.

My friend is having schengen visa one time entry visa for hungary. He is purchasing few things. Like iphone, DSLR and laptop.
1. Can he get the VAT refund on all of them?

2. He will be leaving europe from vienna, but things are purchased from hungary. Can he get vat redund from vienna airport.

3. Is there any helpline number for vat refund?

Thank you in advance
Manmeet Singh

Hi Manmeet,

Those items would appear to fall into the EU guidance, so a VAT refund should be applicable.

He will not get any refund at the departure airport in the EU; once he has arrived at his destination outside of the EU, he must write to the tax authorities in Hungary, enclose his VAT documentation that he obtained from the Hungarian retailer when he bought the goods - please note this VAT documentation is not the receipt, it's a special VAT document that the retailer supplies - so make sure the retailer can do this before you hand over your money.  The departure airport in Hungary will almost certainly be participating the VAT free scheme.

Helpline - I don't know; I just tried Google and the links it gives are all dead; as your friend is already in country, I'd advise him to ask in the shop he is looking to buy the items from.

Hope this helps; please let us know how your friend gets on.

manmeet27 :

Can he get vat redund from vienna airport.

No. That is not how it works. He has to apply for a VAT refund as Cynic said (including getting all that lovely paperwork together from the retailers, which I think might now be difficult).

Thank you for reply

He will be going to vienna via bus. Then he will take his flight from vienna to india. I was thinking he will be able to claim for vat refund at vienna airport, as it is his last europe  country.

He still have to buy the stuff, so we will ask for the paper work for claim.

manmeet27 :

Thank you for reply

He will be going to vienna via bus. Then he will take his flight from vienna to india. I was thinking he will be able to claim for vat refund at vienna airport, as it is his last europe  country.

He still have to buy the stuff, so we will ask for the paper work for claim.

We're talking about another level of bureaucracy; I honestly don't know how that will work; perhaps he should look at buying his items at Vienna Airport, they should be able to deal with the VAT documentation.

In fact thinking about it logically, I suspect you may have issues with tax-free items bought in Hungary, taken to Austria, then exported out of the EU; I'd get him to double-check before he does it.

Cynic :

perhaps he should look at buying his items at Vienna Airport, they should be able to deal with the VAT documentation.

Exactly my thoughts. And if for some reason, he can not get VAT back, there is still that automatic 7% VAT savings between Hungarian VAT (27%) and Austrian VAT (20%). Not to mention I can often find the same products in Austria for less, before VAT, than what they cost in Hungary, before VAT. Odd, eh?

Quite frankly, I would recommend spending a day in Vienna anyway. For budget shopping or just hanging out for a few hours. It is a nice city. And if one does spend a day in Vienna, I recommend to take one of the fast Intercity trains to Vienna, they are better than the bus. (However, Budapest direct (no transfers) to Vienna airport by Bus is okay).

Hi Guys.

I'm just wondering what shops in Hungary are offering Vat forms to be filled out upon purchase?
I want to buy some PC parts but I cant see many shops that say in advance that they can supply me with the form for Vat return upon exit of EU.

Any advice?

The shops that have the forms normally have this sign in the window.

https://www.gretnagreen.com/images/stories/Visiting/Shopping/tax-free-shopping-at-gretna-green.jpg

Probably best to ask in the shop where you are intending to buy the stuff from.

Yes cynic is right , i think this is best way
Probably best to ask in the shop where you are intending to buy the stuff from.

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