If you are a non-EU resident planning a trip to Portugal, you might not realise that you are eligible for tax-free shopping. Even if shopping is not really your “thing”, you may want to purchase some Portuguese wines, produce, jewellery, clothing or crafts to take home so why not save money in the process?
As a permanent resident in Portugal, I can’t take advantage of this scheme but if you live in any country that’s not in the European Union, which now includes the UK, read on to find out how get money back on your holiday purchases.
Important note: Tax-free shopping only applies to items you take out of the country, not the ones you use while you’re here.
What is tax-free shopping?
Tax-free shopping, (or TFS), is a system that allows non-EU residents to claim back the Value Added Tax (VAT) on their purchases. VAT is a sales tax that’s added to the price of goods and services in the European Union. In Portugal, the rate of VAT (IVA in Portuguese) varies from 6% to 23% depending on the nature of the product.
By claiming back the VAT, you can save quite a bit of money. You won’t get all of the tax back but you should receive around 15%, which is enough of an incentive to take the following steps.
How to get tax-free shopping in Portugal
To get tax-free shopping in Portugal, follow these simple steps:
1. Look for the tax-free shopping logo
When you are shopping in Portugal, look for the Tax-Free Shopping logo on the store window or ask the salesperson if they offer tax-free shopping. It’s up to the shop to decide whether or not they want to participate in the scheme so don’t assume that every store offers this.
In other words, check before making any significant purchase – if the shop you are in doesn’t have tax-free shopping, it could be well worth going to a different store in order to be able to claim the tax refund.
Popular tax free operators are Global Blue, Planet, Innova and Travel Tax Free although there are others, too.
2. Make your purchase
It’s essential to say at the checkout that you would like to claim the tax back. The shop assistant will ask you to provide proof that you are a visitor to the EU. You’ll need to show your passport or other identity document proving your residence outside the EU. (A photo of your passport usually works.)
The shop assistant will ask you to fill in the form with the necessary details and then they will complete the shop’s part of the form. After you make your purchase, make sure to keep the receipt and the Tax-Free Shopping form which will have a registration code on it.
You must be there in person to make a VAT-free purchase, although you don’t have to pay for the goods yourself.
3. Get your form stamped at customs
You’ll need to get your refund processed before heading home.
If you bought something in a different European Union country, process all your documents at your last stop in the EU, no matter where you made your purchases.
If Portugal is your last exit point from the EU, you need to get your Tax-Free Shopping form approved by customs. This is to prove that you are taking the goods out of the country. If your form isn’t validated by customs, you won’t be eligible for a tax refund.
Arrive at the airport earlier than usual to allow plenty of time for this extra step in your journey. Make sure to bring all your paperwork and purchases with you.
You can have your forms validated at one of the electronic kiosks you’ll see around the airport.
If the goods you are claiming tax on are in your baggage to be checked, make your way to an e-kiosk first, taking your passport or other identity document, boarding pass, proof of purchase with registration code that you were given in the shop and the goods and corresponding invoices.
After following the instructions at the kiosk, you’ll either get a code green or code red show on the screen.
Green means all’s well; go to the check-in desk to check your bags, tell them you’ve had your purchases validated and then make your way to the desk belonging to the VAT refund operator to receive your refund.
Red indicates that you’ll need to go to the Customs desk for a further check. The person at the Customs desk will issue you with a certification of exemption, if applicable.
IMPORTANT: Customs officers will need to see the items you bought so don’t pack them at the bottom of a suitcase!
If the goods are in your hand luggage, go through security first then find an e-kiosk. The instructions are then the same as above.
4. Claim your tax refund
After getting your form stamped by customs, it’s time to reap the rewards of your efforts. Assuming you did your shopping with a merchant that works with refund services like Global Blue or Planet, you’ll find their offices within the airport.
Check your tax-free form that the shop issued to find out which counter to go to. Head over there and present your validated document. Most likely, you’ll receive your refund in cash or credit to your credit card.
You may find you have to put your claim into a submission box. In this case, the reimbursement operator will collect the form from the submission box, verify its validation and process the payment via credit card or cheque, which will be sent to your home address.
This video shows the steps required to claim your tax back.
What can you buy tax-free in Portugal?
This tax break is designed for things that could, in principle, be carried in personal luggage. Goods that have to be exported as freight, for example, and cars and yachts are not part of the scheme.
You can buy almost any packable item tax-free in Portugal, including fashion, cosmetics, jewellery, technology and food and drink, with many of the best high street retailers and global luxury brands offering tax free shopping services.
If you’re not sure what to buy, take a look at my article about Portuguese souvenirs and gifts for inspiration.
Do you have to spend a certain amount to qualify for tax-free shopping?
Due to administrative costs there is a minimum threshold for tax-free purchases in Portugal, i.e. €50 + VAT (e.g. €50 + 23% VAT= €61.50). This amount can be an accumulation of items bought from the same shop at the same time (so that all items are on one receipt).
However, you can’t accumulate purchases in different shops to reach the threshold. You’ll receive a separate form in each shop in which you buy goods. Just don’t lose any of them!
So, all that remains is to make sure you have plenty of space in your suitcase to take advantage of a cheaper shopping experience when you visit Portugal.
Click on the links to see which tax free operators are available at each airport.
You may also find this 25 Essential tips for your first trip to Portugal post useful if you’re a first time visitor and if you’re thinking of hiring a car for your stay take a look at my 25 Essential tips for driving in Portugal without losing your cool post.