How can I request a refund for overpaid taxes abroad?
What Taxes Apply When You Travel or Purchase Goods from Abroad?
When you purchase goods while travelling or buy products online from abroad, you may be subject to import taxes, VAT, and customs duties. Understanding when and how these charges apply is essential to avoid unexpected costs and to determine whether you're eligible for a tax refund on foreign purchases.
Import Taxes and VAT on International Purchases
Do I Pay Tax on Goods Ordered from Abroad?
Yes—goods purchased from abroad, whether online or in-person during travel, can be subject to:
Import VAT
Customs (import) duty
Excise duty (for items like alcohol and tobacco)
The value and type of the item determines what taxes apply.
For goods valued over £135, both import VAT and customs duties may be charged.
For goods under £135, import VAT still applies, but custom duty usually does not, unless the item is excise goods.
Tip: Always check the declared value on the parcel. Charges apply even if the item is a gift, unless it's worth £39 or less.
Who Collects These Taxes?
If items are sent to you from abroad, the delivery company will usually contact you to request payment of any VAT or import charges before the item is delivered. Failure to pay may result in the item being returned to the sender.
VAT Rates and Exemptions for Overseas Purchases
Even if import duty doesn’t apply, VAT is almost always charged—either:
At the point of sale abroad, or
When goods enter the UK
Different countries have different VAT rates. Some prices abroad already include VAT, while others may charge it separately at checkout or during import.
Only gifted items under £39 are exempt from VAT.
Can Individuals Reclaim VAT on Purchases Made Abroad?
VAT Refund After Brexit
Before Brexit, British travellers to the EU could claim back VAT on purchases made abroad (a tax rebate). However, this ended in 2020. UK travellers can no longer claim EU VAT refunds when shopping in Europe.
VAT Refunds for EU Travellers in Ireland
Ireland still allows VAT refunds to EU residents, but not all retailers participate. Applications must be submitted within three months of the purchase date.
VAT Refunds for Non-EU Tourists in the EU
Travellers who reside outside the EU can claim VAT refunds on goods bought in EU countries—if they travel within the EU and meet the criteria. You'll often need to:
Spend over a minimum threshold
Show proof of export (e.g., flight ticket)
Complete a VAT refund form at the airport
Sales Tax Refunds in the USA and Canada
Unlike the EU, the USA and Canada generally do not offer sales tax refunds to international tourists. However, a few U.S. states may allow refunds for non-residents, subject to:
Minimum purchase amounts
Purchase of specific goods
Strict documentation
Shop-and-Ship Services: VAT-Free Purchases
Some UK luxury retailers like Selfridges, Harrods, and Harvey Nichols offer shop-and-ship services. These allow international customers to purchase goods VAT-free, provided the items are shipped outside the UK.
Non-Resident Tax and Reclaims on Foreign Income
If you're a UK resident earning income abroad, you might face a non-resident withholding tax in the country where the income is generated. This may apply to:
Rental income from overseas property
Revenue from online sales
Income via foreign contracts
The amount withheld may already be shown on a Non-Resident Tax form or required separately.
Can I Reclaim Non-Resident Tax?
Often, yes—thanks to the UK’s double taxation agreements, which help avoid paying tax on the same income twice. However, reclaiming this tax involves complex paperwork and country-specific rules, so it’s advisable to seek help from a chartered accountant.
Can UK Businesses Delay Paying Import VAT?
Yes—UK businesses benefit from the Postponed VAT Accounting (PVA) scheme. Instead of paying VAT at the border, businesses can:
Declare and recover import VAT on the same VAT return
Improve cash flow and reduce upfront costs
Tip: Make sure to set your accounting system to the correct VAT code for PVA to remain compliant.
Final Thoughts
Whether you're shopping abroad, importing goods, or running an international business, it's essential to understand how foreign tax, import duty, and VAT apply—and when you might be eligible for a tax refund or rebate.
For individuals, knowing your VAT refund rights can save money. For businesses, using tools like PVA and understanding non-resident tax reclaim rules can streamline international operations.
Need Help with International Tax or VAT Reclaims?
