Let’s talk about the Value Added Tax (VAT), since it does affect the final price that you pay for an item, like Laura’s new Louis Vuitton wallet.
a savings of over 30%
If you make a single purchase over 155 euros while in Italy, it should qualify for a VAT refund. VAT is a whopping 22% (this is the rate it’s grown to over the years) — so you’ll want this back on large purchases, or on an aggregate of a number of smaller purchases.
In short, getting your VAT refund is a two-step process: at the store, do some light paperwork, which you then take to the airport where it gets stamped and submitted.
pack the item(s) in your carry-on
At Louis Vuitton, our five friendly salespeople looked at Laura’s passport and then handed her an iPad to fill in some information. After the sale was rung up, Laura was handed some paperwork to take to Global Blue, which has an office at Piazza di Spagna and at the airport. We chose to do our VAT refund at the airport since that would be at the end of our trip, in case we had more purchases.
In order to get your paperwork stamped at the airport, you will need to “prove” you’re taking the item out of Italy. You do this by keeping the store tags on your purchases, and leaving it in any packaging. You’ll need to have the item with you in case the VAT processors need to see it (in our case, we pulled out the bag with the wallet in it, but they did not even look at it). So, if you are dealing with your VAT refund at the airport, you will want to pack the item(s) in your carry-on.
build in at least 30 minutes for dealing with VAT at the airport
At Fiumicino, you walk down a white corridor (it always makes me think of the movie THX 1138). At the end, you scan your boarding pass at an electronic gate and then proceed through security. The picture bellow was taken immediately after the security checkpoint but before the passport control (the crowd in front is waiting to pass through passport control). The VAT refund processors are beyond the crowd.
Two companies offer VAT refund processing; we went to Global Blue. Both companies are located next to each other at FCO. There were about a dozen people (interestingly, mostly Chinese) in line at Global Blue, and it took about 15 minutes for us to get to the front of the line. So, I’d suggest you make sure to build in at least 30 minutes for dealing with VAT at the airport.
The Global Blue representative asked Laura whether she wanted to receive her VAT refund in cash or on the credit card. We chose cash, and they handed her 55 euros. Those 55 euros equated to U.S. $61.
So, subtracting the VAT refund from the purchase price, the total price of Laura’s new Louis Vuitton wallet was $472. That’s a savings of $228 off the U.S. retail price of $700, a savings of over 30% (more, if you consider the usual sales tax found in the States). Not bad.
The VAT process was pretty much painless because we were prepared and knew what to expect. The shopping was fun, particularly the five chatting, charming salespeople who processed the sale. And we got a little movie, in Rome’s oldest cinema, thrown in to boot.