VAT: Is ‘tax-free shopping’ taxing?

This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our privacy notice.

VAT: Is ‘tax-free shopping’ taxing?

By Andrew Needham, February 2020

Andrew Needham looks at what happens when a retailer sells to an overseas customer.

The VAT retail export scheme - also known as ‘Tax-free shopping’ - allows overseas visitors to claim a refund of VAT on goods they buy and export from the EU in their personal luggage. 

The scheme cannot be used for services supplied to customers such as hotel accommodation, meals, and car hire; it’s for the sale of goods only.

Overseas visitors

The term ‘overseas visitor’ has widened since the scheme was introduced to include migrating EU residents; as a result, there are complicated rules for students and workers from overseas who come to live in the EU for limited periods. Also, it is not always easy to determine whether a traveller is an overseas visitor

Subscribe to a Tax Insider newsletter to get instant access to the Tax Article library.

Get instant access to 1798 articles and a 14 day free trial!
Subscribe
Begin your tax saving journey today

Each month our tax experts reveal FREE tax strategies to help minimise your taxes.

To get Tax Insider tips and updates delivered to your inbox every month simply enter your name and email address below:

Thank you for signing up to hear from us!