When shopping in Lisbon, or Portugal, you may notice a VAT added to your receipts. It’s called the IVA in Portugal, and you usually see it printed on receipts with a percentage.
VAT stands for value-added tax, and it’s a consumption tax added to each item you buy.
In practice, it means an extra cost to consumers, which in Portugal comes in three rates: 23% is the standard VAT, added to most goods; 13% is added to some goods (eg. bottles of wine); and 6% is added to medicines, books, and optical lenses.
Who Can Claim a VAT Refund?
Non-EU residents are entitled to a VAT refund for their purchases under certain circumstances. In order to get a refund, you need to know about the rules and follow a few instructions.
Which Purchases Are Eligible for a VAT Refund?
You can claim a VAT refund on items that you take home with you, purchased from participating retailers in the tax-free scheme. This means that a hotel bill from your stay or a restaurant meal are not eligible purchases for a VAT refund. There’s also a purchase minimum: €50 or more (without tax) per receipt on which you would like to claim a refund.
Look for a “VAT Refund” or “Tax Free Shopping” sign in shop windows, or simply ask the retailer if they participate in the VAT refund scheme. In any case, you’ll find it in major clothing and tech stores, and in jewelry shops.
Assuming Portugal is your final (or only) destination in the EU, any purchase within the EU that meets the above criteria is eligible for a VAT refund, as long as you have the invoice and the refund form. For example, if you’re a non-EU resident and you fly home from Lisbon after visiting Paris and Madrid, you can get the VAT refund at Lisbon Airport for the clothes and shoes you bought in Paris and Madrid, as well as the necklace you bought in Lisbon.
If Portugal is just a stop in the middle of your trip within the EU, you should ask for the VAT refund at the last country when leaving the EU.
Some large shopping centres and department stores announce instant in-store refund. Check conditions at stores.
When Purchasing an Item in Portugal
If your purchase is eligible for a VAT refund, let the retailer know that you want to benefit from the VAT refund scheme. They will ask you for your passport, so have it with you, and they will give you a normal receipt together with a special tax-free form with a registration code. Keep both as you’ll need them to get the VAT refund at the airport.
The whole process is now electronic via the e-Taxfree Portugal System.
Claiming a VAT Refund at the Airport
On the day of your EU departure, you need to apply for a VAT refund at the airport. Arrive some time before your flight departure. Give at least 30 minutes for a tax refund waiting time, but it can take much longer, especially at peak times or if you’re in the queue behind a tour group.
Depending on whether or not you put the item you purchased into your checked luggage, follow these steps:
Checked luggage: Let airport check-in staff know that you have an item to declare. Then, go to an e-Taxfree Portugal kiosk carrying your passport and boarding pass, together with the item in your luggage and the tax-free form. Follow the instructions, and hopefully the kiosk will approve the VAT refund, showing you Code Green. Return to check your luggage. Otherwise, Code Red means you have to go to Customs.
Hand luggage: After security control, go to an e-Taxfree Portugal kiosk with your passport and boarding pass, together with the item and the tax-free form. Follow the instructions, and hopefully the kiosk will approve the VAT refund, showing you Code Green. Otherwise, Code Red means you have to go to Customs.
Receiving a VAT refund: After security control, you must present the validated tax-free form at the refund operator desk to get instant (cash or credit) refund. Otherwise, drop the validated tax-free form in the available drop boxes, and wait for the VAT refund to be issued to your credit card, or sent to your home address in the form of a cheque. There may be an administrative charge for the service.