One of the best things about shopping in Ireland for American citizens and other non-EU visitors is that purchases can be tax free. We stress can be because it is not automatic — it takes a little effort on your part. Here's how it works.

In Ireland, almost all consumer products are subject to Value Added Tax — VAT, for short. VAT is a "hidden tax" — already added into the purchase price of any souvenirs bought on a visit (there are two notable exceptions in Ireland: no VAT on books and no VAT on children's clothing and footwear).

However, as visitors to the EU, Americans are entitled to get a refund of VAT paid. And as it happens, Ireland is one of the best places in Europe to shop and get VAT refunds. Unlike all other EU countries, Ireland requires no minimum purchase. The VAT rate in Ireland varies, but it is usually around 21% on the net price of the goods which equates to 17.36% of the selling price. So, you can get back over 17% of the selling price, after service fees are subtracted.

Of course, you can avoid VAT altogether by mailing gifts home, making purchases at Shannon and Dublin's Duty Free Airport shops, or by buying goods at Ireland's churches, abbeys, and other non-profit organizations that operate as charitable trusts.

Assuming that you shop in a variety of commercial shops and are carrying your purchases back with you directly to the U.S., there are three major refund systems. All of these systems involve some paperwork. The prime rule is that you have to get a VAT-refund form at the time of purchase from each store in which you shop. This is very important!

Global Refund Tax Free Shopping (www.globalrefund.ie) — This is by far the largest and most reliable VAT-refund system. Simply make purchases either by cash or credit card, and then request a Global Refund form (blue and white in color) from the store clerk. He/she fills in the necessary store details; you fill in your name and home address, etc. Save all the forms till departure day. At Shannon or Dublin Airport, hand in your forms to the Global Refund desk. After a service fee for each store is deducted (between 2% and 3% of the invoice totals), you will get a refund of cash (in US, Canadian or Australian dollars, euros, sterling or Swiss francs) into your hand before you leave Ireland. Real money on the spot! Note: a fee of less than $1 is charged on all cash refunds in currencies other than euro. You also get a printed receipt with complete details of your total purchases, service charges, and VAT refund. If you prefer to have a credit applied to your credit card, that is another option. If you don't have time or forget to submit your VAT forms at the airport before departure, you have 90 days to mail the vouchers back. These tax-free vouchers must be stamped by a customs officer or a notary public before being mailed.

TaxBack — Make purchases by credit card or cash and receive a TaxBack form (purple-and-white in color). Fill out the forms and keep till the end of your trip. When you get to the airport, go to the TaxBack desk and they take your receipts (they do not automatically give you copies for your records). This company promises to send you a refund by check or credit card (Visa or Mastercard only), after deducting a service charge of 2% to 3% on the gross price of total goods purchased. They do not give cash into your hand. (Note: as of our visit in August 2009, the personnel and overhead sign for this service were no longer present at Shannon or Dublin Airports (on inquiring, no airport personnnel could confirm or deny whether TaxBack is still in business). It could mean they have ceased operating, so it is best to avoid this system until further notice, since getting a refund may prove problematic at best).

In-Store Refunds – This refund method is operated by a number of the larger stores directly or through Global Refund (see above) or a system called “MoneyBack.” It is almost as easy as mailing your goods back home, but without postage costs.  With this system, you are asked to pay by credit card.  Stores take off the VAT at the time of purchase (less a service fee of 2% to 3%), and give you a form and a postage-free envelope.  However, you must remember to hand in or mail your forms at departure from Ireland.  Some forms require you to have the forms stamped by a customs officer before departure. If you don't mail/hand in your forms, then your credit card will be charged VAT plus a fee. If you don’t have a credit card, but still want to make a purchase, you pay the full price including VAT and the store sends you a check (less the 2% to 3% service charge) within six weeks. Note: In the past year, a new “MoneyBack” card has been introduced (in conjunction with purchases made at Blarney Woollen Mills stores) – it works like a credit card, but it records the tax you are due with each purchase. When departing Ireland, you insert your card into a touch-screen  TaxFree Technology Kiosk – and your tax refund will automatically be transferred to your credit card. You can also view the details of your MoneyBack purchases and refunds online. To apply for a card in advance of a visit and to get full details about this new system, go to www.moneyback.ie  or www.taxfreetechnology.com.

Above all, always remember to get a VAT refund form each time you make a purchase. You can't get any refund (cash, check or credit card rebate) without a form. It's always worth the effort - and, as they say on TV, it's your money.

…A Final Note About Making Credit Card Purchases
      When you shop and choose to charge the amount of your purchases to a credit card, you will get a good exchange rate – since credit card companies make large transactions all at once, and you benefit in the process.  However, be careful about one procedure. Sales clerks will often ask if you want to charge your purchases in euros or in  dollars. Your first reaction may be to say “dollars,” but this is not correct. Always say “charge in euros” because you will get a much better rate of exchange in the end.  Happy shopping!

For a detailed step-by-step guide to reclaiming your VAT refunds, get a copy Pat's book, The Smart Shopper's Guide to Ireland  

"Guide to the ABCs of VAT" ©Copyright 1999-2009 by Patricia Tunison Preston, may not be reproduced without written permission of the author.

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