UK residents can now claim IVA back on retail purchases in Portugal

UK RESIDENTS CAN NOW CLAIM IVA BACK ON RETAIL PURCHASES IN PORTUGALUK residents from England, Scotland and Wales can now claim a VAT refund on retail purchases (over €50+VAT) they make in Portugal, effective from 1st January 2021.

With more than 2.1 million UK tourists visiting Portugal in 2019, this represents a big benefit for British shoppers, who can now follow the same refund process as any other tax-free shopping nationality.

British shoppers spent approx €79 million in Portugal’s stores in 2019, with clothing and accessories and non-specialised retail seeing the largest share of British spend.

With the price of goods in Portugal being on average 5-10% cheaper than in the UK, a stronger pound/euro exchange rate, plus the additional savings offered by VAT-free shopping, the purchasing power of UK shoppers in Portugal is set to increase by up to 20%. Portuguese VAT rates vary from 23-6% depending on the type of goods purchased.

How does Tax Free Shopping work for UK residents visiting Portugal?

British residents from England, Scotland and Wales will be classified as non-EU residents and will be subject to the same eligibility criteria as any other tax free shopping nationality.

They must:

  • Reside in England, Scotland or Wales. British nationals residing in Northern Ireland, or within the EU are not eligible to shop Tax Free in Portugal (proof of residency is required)
  • Meet the minimum spend criteria of €50+VAT
  • Export the unused goods outside of the EU within a three-month period.

In a Portuguese store, VAT-free shoppers from the UK will need to show their passport together with a separate document providing proof of address, to confirm they reside in England, Scotland of Wales. Once eligibility is determined, British tax-free shoppers will follow the usual process of completing a tax free form, which will be validated at customs when they leave the EU (before they return to the UK).

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