Natural persons who are residents of non-Community countries are entitled to the refund of value added tax on purchases made in the shops of the EU Member States, including Estonia, which are selling goods under the tax-free arrangement (henceforth the tax-free shops).
A VAT refund form is issued if:
- the purchaser is a natural person of a non-Community country, and
- the sales price of the goods purchased, including the value added tax exceeds 38 euro
The natural person of a non-Community country is a person whose place of residence is in a non-Community country.
The following territories forming part of the customs territory of the Community are also regarded as the non-Community countries: Mount Athos, the Canary Islands, the French overseas departments, the Åland Islands, the Channel Islands, the Island of Heligoland, the territory of Büsingen, Ceuta, Melilla, Livigno, Campione d’Italia, the Italian waters of Lake Lugano.
If the place of residence of a person who has made a tax-free purchase is on the EU territory, which according to the Value Added Tax Act is deemed to be a non-Community country, then the name of that territory must be indicated in a VAT refund form among the data specifying the place of residence of that person.
The Principality of Monaco, the Isle of Man and the United Kingdom Sovereign Base Areas of Akrotiri and Dhekelia do not form part of the EU territory, but still they are not regarded as the non-Community countries for the purposes of application of the value added tax and therefore the persons residing in these regions cannot make tax-free purchases.
A place of residence is deemed to be in a non-Community country if the identity document presented is one of the following:
- passport or identity card (ID card) issued in a non-Community country that is a member of Schengen cooperation area (Island, Liechtenstein, Norway and Switzerland);
- passport of a non-Community country that is not a member of Schengen cooperation area if the passport has a stamp certifying the border crossing or an entry visa in it;
- passport of a Member State of the European Communities (including Estonia), or any other legal document certifying the residence in a non-Community country (a residence permit or a document certifying the right of residence).
Persons presenting the passport of a non-Community country are regarded as the Estonian residents if they have been issued a residence permit in Estonia.
Persons are required to present a VAT refund form to customs in order to get customs approval for carrying the goods out of the Community.
Customs will not approve a VAT refund form if:
- packaging of the goods has been opened before presenting the goods to the Customs;
- the goods do not comply with the data specified in a VAT refund form;
- the date of carrying the goods out of the Community is a later date than the final date of the third month following the issue of a VAT refund form;
- the customs authorities have reason to suspect the authenticity of the data indicated in a VAT refund form as regards the person’s place of residence.
If the goods are presented to Customs for approval of a VAT refund form in a sales packaging which is not sealed then the goods must be unused before carrying out from the Community.
In certain cases it is possible to take the purchased goods, for which a VAT refund form has been issued, out of the Community while using the goods; for instance an unloaded trailer may be carried out if it is coupled with a motor vehicle.
For further information please consult:
- Regulation no 70 of the Minister of Finance of 07.04.2004 ”The procedure for treating the transfer of goods from Estonia to a non-Community natural person as the export of goods” (in Estonian)
- Sample identity documents issued by the Police and Border Guard Board
- Public online register of authentic travel and identity documents
- Basic principles of Schengen cooperation (in Estonian): Schengeni põhimõtted
- Schengen Area
- Member States of the EU
- Guide to VAT refund for visitors to the EU