Tax Free Refund Guide

According to the Italian law, non-EU resident travellers may be granted VAT relief/refund for goods intended for personal or family use purchased in Italy. This relief is surely an advantage for the foreign travellers: in fact, it allows to save from a minimum of 4% up to a maximum of 22% of the selling price of the goods purchased.
Here is a short guide according to the Italian legislation to discover the common system of value-added tax exclusively for non-EU resident travellers.

1. VAT (in Italian: IVA) is a value-added tax on goods and services and is part of the European Union’s value-added tax system.
2. In some cases, travellers may be granted a VAT refund. This refund does not cover the services supplied by hotels, restaurants, taxis or agencies.
3. You may be eligible for a VAT refund provided that:

• you are a non–EU resident;
• the goods purchased are intended for personal or family use only and are carried in your luggage;
• the overall value of the goods purchased exceeds 154,94 Euro (VAT included);
• the purchase is certified by an invoice. This invoice should include a description of the goods purchased, your personal information as well as the details of your passport or any other equivalent document;
• the goods shall leave the EU territory by the third month following the date of issue of the invoice, as proved by the “customs stamp”;
• from 1 September 2018, tax-free invoices in Italy must be electronically transmitted by the national seller to OTELLO information system (Online Tax Refund at Exit: Light Lane Optimization) and their validation is digitally carried out.
  • after the digital “customs stamp” is obtained, OTELLO will send a message to the retailer that all the requirements are met and, as a consequence, the retailer will reimburse the amount due or will settle the tax relief.
  • the invoice is returned to the Italian retailer within four months after the purchase was made. If the invoice is stamped by other EU countries, it needs to be brought to the shop retailer by the fourth month following that of the purchase.

4. The goods purchased and the relevant invoice must be shown at the customs exit point when leaving EU territory (if you intend to pack the purchased items into your check-in luggage, you must go to Customs BEFORE checking in).
5. After leaving EU territory, the traveller must return the original invoice, regularly endorsed by the customs office, to the Italian retailer. Said invoice must be returned within four months from the date when the document was issued.
6. The refund can be made directly by the Italian retailer (however, make sure that the shop you’ve chosen displays a “Tax-Free Shopping” or “Euro Tax-Free” sign in its window).
7. Several Tax-Free companies are able to offer immediate VAT cash refunds when the goods leave either Italian or EU territory (thus exonerating the passenger from having to return the invoice to the retailer). However, this procedure only applies at major international airports or main border crossings. Most major department stores have Tax Free Refund offices.
8. The services provided by Tax-Free companies imply the payment of a small administrative sum which is directly deducted from the amount of VAT refunded to the traveller.
9. In the event of a traveller not receiving a VAT refund within a reasonable period of time, he or she should re-contact the Italian retailer or one of the aforementioned companies.
10. However, please note, VAT cannot be refunded directly by customs offices.

Source: www.adm.gov.it