The VAT refund scheme for non-EU travellers is regulated in Article 147 of the VAT Directive. The reality is that these transactions are actually considered as exports, but since at the time of the transaction the supplier of the goods (normally the shop where the goods are purchased) is not certain that the goods will leave the EU territory, the supplier must charge VAT on the sale, which will then be refunded to the purchaser of the goods if it is proven that the goods have indeed left the EU territory.
- The VAT Directive and a problematic scenario
- The need for harmonisation
Source: ITR
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