Angelika If you're still one of these people who like shopping trips to the city center, you may have already noticed that in Europe, stores sometimes advertise tax-free shopping. How does this work? The value added tax, which Germany levies on most goods, adds 19% to the purchase price. But people from non-EU countries can get a refund on the tax paid on purchases during their trip. The prerequisite is that the goods are only intended for personal use and are brought abroad in unused condition and carried in the traveling luggage.

This also applies to German citizens living in non-EU countries, like us. It is required, though, that their German passport must show the foreign residence, or the customs officer will be deny the required stamp on the customs form. To claim a value added tax refund, customers can theoretically obtain an export certificate at the store, then collect the customs stamp upon departure at the airport, which certifies export of the goods, and then later present or send the stamped certificate back to the store. This is naturally very cumbersome, especially when you've shopped at many different stores during a tourist visit.

Therefore, there are service providers that simplify the reimbursement for foreign customers, for a fee. "Global Blue Refund" is one of the best-known companies, but recently it has become increasingly common to find another provider called "Planet Tax Free". Customers can process the claime through either provider. In cities with many foreign tourists like Amsterdam, you often see stores display the sign "Tax Free Shopping", but even in my small town of Oldenburg where I like to shop for clothes at the store "Leffers" during my visit to Germany, this works as advertised.

Now how does this work specifically when you're shopping? At the checkout, you tell the cashier that you want to shop "Tax Free". Then Leffers in Oldenburg will fill out a "Global Blue Refund" form by hand, and "Hirmer" in Munich will print an electronic form for "Planet Tax Free" at the checkout. It is also important that the original cash register receipt is attached to the form. Customers must then enter their contact details such as address and passport number on the form and sign it. Each country has slightly different rules. In Germany, the customer must be at least 18 years old and have purchased goods worth a minimum of €50 per transaction.

The second step then happens at customs at the airport. It's a bit tedious to handle the necessary paperwork before departure at the airport, as it takes time. But since we always buy so much on our trips to Germany, it does pay off. Now, where the departing traveler receives the export customs stamp depends on the airport and also whether the goods are carried in carry-on luggage or checked-in luggage. Also, the customs officer might want to inspect the goods. We have been doing "Tax-Free Shopping" for years and had to open our goods twice in front of the customs officer. And we've observed stressed travelers frantically unpacking their suitcases to find the goods when the customs officer demands it. Experienced travelers like us, of course, pack everything easily accessible in a designated suitcase.

Travelers usually first goes to the check-in counter of their airline at the airport. They check in their luggage and receive the baggage tag, but tell the counter agent, before the luggage disappears on the conveyor belt into the bowels of the airport, that they have "Tax-Free Shopping" in their luggage and still have to go to customs. They get their luggage reissued and now haul it through the airport, until they reach the customs counter, which may be quite a distance from the airline's check-in counter. After waiting in line there, and saying a quick prayer that there isn't someone before them in line who will hand the customs officer a stack of incomplete forms, or whose goods cannot be found in their suitcase. We've seen everything! At the customs counter, you then hand the customs officer the "Tax-Free Forms" and your passport. The customs officer then stamps the departure certificate on the form, and hopefully does not see the need to inspect every pair of underwear or socks that were purchased. Right then and there, the luggage is then placed onto a conveyor belt in the customs office, from where it enters the bowels of the airport on its way to be loaded onto the plane. I always cross my fingers that the luggage then does not disappear mysteriously somewhere in the airport building and will actually ends up on the correct aircraft.

Another option is to carry purchased items in carry-on luggage, provided they fit. However, it is important to note that in this case, customs inspection will take place after the security line. This can be confusing and I have also experienced being directed to the wrong customs office in the main hall before. With carry-on luggage, one goes through security first, then passport control for departure, and finally finds the customs office on the other side. There, the procedure is similar to the one described above, with the difference that of course one does not put the hand luggage on a conveyor belt, but takes it on the flight. Incidentally, on my last trip, the customs officer asked me if I had two passports. How did he know that? Because I had presented my American passport for tax-free purchases, but had shown my German passport exit passport control beforehand. Big brother is watching you.

Now here comes the final step. Unless you want to receive your reimbursement on your next trip to Germany, by showing the form with the customs stamp at the store, large airports like Munich and Frankfurt offer "Global Blue" tax refund booths, processing the refund for a hefty fee. Travels can get the refund in cash, which again requires paying fees. Those who want dollars instead of Euros receive an unfavorable exchange rate. Another option is to present your credit card, on which the refund will then be credited, which is less burdened with fees and happens relatively quickly.

The refund request can also be sent to Global Blue or Planet Tax Free using a provided envelope, which takes longer, but it's useful if the counter is not staffed. Near the customs office there are special mailboxes for this purpose. However, it always gives me a little stomach ache to enter my credit card number on the form, which then goes around the world to reach the offices of Global Blue and Planet Tax Free, which are located in Slovakia and Poland. Last time, we sent our request to "Planet Tax Free", and for weeks the money did not appear on our credit card. Michael had already filed a search request online when suddenly almost simultaneously the refund appeared on our credit card.

How much do you actually lose in fees from the reimbursement amount? You can see in Figure 3 that from a purchase price of 609.93 Euros at the store, a total of 97.38 Euros in value-added tax were withheld, which at that time were 106.05 US Dollars. Exactly two months after our trip, 66.70 dollars arrived on our credit card after all processing and conversion fees had been deducted, so the processor kept a total of 37% in fees, not exactly a bargain!

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• More topics you might be interested in:

  	Applying for a Disabled Parking Permit
  	Angelika's New Job
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  	How can German emigrants renew their passports?
  	Drama Finding a New Primary Care Doctor
  	Top product: Cheap Bike Rack