Traveling abroad? Break free from the value-added tax

@Money August 25, 2011: 3:23 PM ET
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(MONEY Magazine) -- Lots of the 183 countries that levy value-added taxes, included in the prices merchants charge, are hiking them to combat deficits. Britain, for example, recently raised its rate to 20%. (For a list of VAT countries and amounts, go to TMF-VAT.com.) Foreigners can get a refund.

To maximize yours while lowering stress:

Pick the right stores.

You must spend a certain amount at a given retailer, typically $30 to $250, to qualify for a refund (check global-blue.com). So concentrate your shopping at one or two, ideally those that use the Global Blue or Premier Tax Free programs (look for a window sticker). Such stores will do the VAT paperwork for you if you ask, says Ed Perkins of SmarterTravel.com -- and these days they may even be able to give you the money back on the spot.

Pack smart.

Put your purchases in one place for easy inspection. Before you depart, have Customs stamp your papers; that allows you to collect cash from a refund desk or receive a credit from the merchant later.

Depending on the retailer, you may have to mail the forms back, so have a stamped envelope ready. You'll want to drop it in an airport mailbox before leaving.

Send The Help Desk your tax questions.

Allow enough time.

You'll need 30 minutes to an hour at the airport to process a VAT refund claim. If you won't get at least $50 back (meaning you've spent at least a couple hundred dollars), it's probably not worth it, says Kathryn Finney of TheBudget-Fashionista.com.  To top of page

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