VAT refund for luxury goods purchases in Europe is attractive to many overseas travelers and the refund amounts vary between each country (review).
During this trip, my wife purchased jeans at Madrid Valentino priced at 1500 Euros including taxes. For comparison, the same jeans from Valentino in the US are priced at $2100 plus local state tax (see image below).
Our flight to India from Madrid
I used 40K AA miles to fly business class on Etihad Airways to fly from Madrid to Hyderabad via Abu Dhabi (AUH).
Madrid VAT Refund
- Since Spain offers a 13-14% VAT refund for overseas visitors, this purchase would qualify for a refund in the amount of a little over $200 USD.
- We decided to go a few hours early in case there are long lines for the VAT refunds at the airport.
- You will have to validate the purchases before clearing immigration, if your purchased items are being placed in the checked luggage.
- We always travel with carry-ons, and we chose to validate them after clearing the immigration.
- Since Etihad Airways always leaves from terminal 4S of Madrid International Airport, we chose to head over there.
Separate Global Blue VAT Validation & Refund Counters at Madrid Terminal 4S
There are separate Global Blue Validation & Refund counters at the terminal 4S of Madrid international airport. You must first go to the Validation Counters (either before checking luggage or after immigration) and scan the receipt of the purchased goods.
Do they inspect purchased goods at Madrid airport VAT validation counters?
No. Surprisingly, we simply had to walk to a kiosk machine (located at the airline check-in areas) and scan our receipt even before heading to terminal 4S for immigration clearance. It’s a completely opposite experience compared to the strict inspection rules at Lisbon’s international airport (LIS), where items must be sealed in their original packaging for them to approve the refunds.
Global Blue VAT Refund Counter at Madrid Terminal 4S
After validation of your purchases, you only have to go to the Global Blue refund counter if you have requested to be paid in cash (local currency). The agent there inspected our forms and said we will be getting a refund on our credit card in a few days. The only VAT Refund counter is located after passing the Burger King and turning left towards gates S1-S24 (see image below).
Global Blue free account registration for updates
I encourage interested readers to register for free with Global Blue and it will update you immediately after VAT approval and refund (see image below).
Alaska Atmos Purchase Activity Page
We always use the Alaska Atmos Visa to earn 3 x points on overseas purchases (review) and the Global Blue refund showed up shortly after approval (see image below).
Cost savings on Valentino Jeans from purchasing in Europe
- Price paid in Madrid – 1500 Euros ($1725 USD) – See image above.
- Spain VAT Refund: $216 USD.
- Final price in USD: 1725-216 = $1509 USD.
- Total price if purchased Valentino Jeans from the US – $2100 + 7% = $2247.
- Total cost savings: $2247-1509 = $738.
Conclusion
Luxury goods are overpriced by nature and if you are interested in purchasing them, it makes sense to get them in Europe due to attractive VAT refunds.