Not many people know if you live outside the European Union and come to Spain for a visit you can enjoy Tax Free shopping. This amounts to a saving of 21% off the price of any items purchased while on holiday in Spain where the total bill exceeds €90.15. But the service is only applicable to items that you intend to take back with you to your country. The tax saving, however, is not applicable to restaurants or hotel bills or food items as these items are not seen as exportable but rather a consumable.
So how do you go about getting you discounts? Before we answer this question lets explain what the Tax is exactly.
When a European citizen buys any goods within the EU they pay an automatic tax called VAT (which stands for Value Added Tax, otherwise known as IVA in Spain). This tax is invisible to the customer they simply pay the price of the item that is displayed in the shops. However most items have a VAT component which amounts to 21% in Spain excluding some special items which have a 10% VAT tax rate.
Anyone living outside of the EU is entitled to claim back VAT tax from any items they purchase within Spain that they intend to take back to their own countries -subject to a few provisos we provide below.
The Tax Free Shopping Service Explained.
In Barcelona the majority of the shops have signed up with the Tax-Free Shopping Service (approximately 90%) This service is designed to make it really easy to claim back the VAT tax you pay on items purchased in Spain. Many shops run the TAX-FREE service but do not display the TAX-FREE SHOPPING logo in their windows, and as a result, many non-EU customers end up paying 21% more than they should.
It's best to ask in the shop if they are members of the TAX FREE Spain Refund service before you buy any goods.
Once you know the shop runs the tax-free service you can purchase your items and then request the TAX refund cheques which the shop will fill out for you. They will then present you with a cheque for your tax refund which you take with you to the airport. You collect these cheques from every shop that you visit when you purchase goods.
How to claim the TAX back
When you arrive at the airport you must present you tax refund cheques at customs BEFORE you check your bags in. Customs may request to check the items before they stamp your cheques. Once your cheques have been stamped by customs, you can cash your cheques at any Bureau de Change in your chosen currency.
If you don't want to lug around all the items you have purchased you can even request TAX FREE REGISTERED shops where you purchased your goods to send them direct to your home via an insured delivery service run by DHL. The Spain refund system has set up a special arrangement with DHL which will do all the paperwork for you and also ensure that your goods will be sent back to your home properly packed up and insured. You will, of course, have to pay for the DHL delivery but this additional service really makes it simple for you to transport your purchases back home. Often the refund that you obtain from the Spain refund service will easily cover the cost of the delivery service. With the delivery service, there is also the added benefit that you do not need to collect your TAX refund cheques - because the TAX is automatically deducted from your final bill.
Now that's what I call shopping in style. Imagine you won't even need to carry your goods out of the shop.
Leaving Barcelona via cruise, car or train.
If you are not leaving Barcelona by plane the reclaim procedure is a little different because you cannot cash your VAT refund cheques in Barcelona.
If you are leaving Barcelona by any other means of transport, ask for a VAT Reclaim envelope in the shop in which you buy your goods. The Spanish name for this is "Sobre" You then collect your VAT cheques as normal from the shops.
Before you leave Barcelona, e.g. on your cruise you have to visit the customs at the port terminal (or wherever the customs point is for your departure from Spain) and present them with you VAT cheques, and they will stamp them for you. You must do this before you leave Europe. When you return to your country send the cheques back to the VAT claim office in Madrid in the Envelope that you picked up from the shop/s.
Unfortunately if you are not actually flying out of Barcelona you cannot just go to the airport and cash your cheques. The cashing of the VAT cheques in Barcelona is a service only available for those that leave Barcelona by plane.
When you send back your VAT claim you have a number of options for obtaining your money. You can opt to receive a cheque, or choose a bank transfer or wire. These options are available on the form that you send back to the VAT reclaim office. It's best to opt for the direct transfer to your account as most banks charge a substantial fee for cashing international cheques - around €30.00 in Spain.
It will take approximately 3 months to process your claim and for you to receive your refund.
You follow the same procedure as for the cruise if you are leaving Spain by any other means, e.g. train or car. But in these situations, your cheques are stamped at the customs office before you leave Spain.
You are entitled to claim a VAT refund on goods purchased in Spain if you meet the following criteria.
1) Your domicile (permanent residence) is outside the European community).
2) You spend more than €90.15 on your items.
3) You intend to take the items back to your country. This, therefore, excludes restaurant and hotel bills and general food.
4) You have all the correct paperwork completed - this is provided by shops that run the Tax-Free Shopping Scheme - look for their logo in the shop window or ask in the shop (some shops do not run the tax-free scheme)
5) You follow all the procedures detailed above in our article for claiming your VAT back before you leave Spain.