VAT Charged to VISA
 

I purchased a ring in Italy and the store offered to deduct the VAT on the spot. I was given a government form and told to obtain a customs stamp at my last European airport, otherwise my credit card would be billed the VAT deducted. I did this at the customs office in the Frankfort airport and followed their instructions to drop the form in the mailbox on site. However, upon my return to Canada, my visa card has been charged for the VAT with a note saying "no stamp"! I don't have any proof that I received the stamp and that the form was mailed. Any suggestions???

Welcome to FlyerTalk, antjef.

'Instructions'? They told you to do it, or they advised you to do it, or they suggested that it would be convenient for you to do it, or what? I myself would certainly never send any kind of form like that without making a photocopy first (for this very reason that you have learned the hard way).

cheers,

Henry

How much time since you posted it?

I don't know the procedures in Italy, however in other countries you would certainly pay the VAT inclusive price upfront, then get the VAT refunded to your card, but this can take weeks or months to be processed when you send the form back.

Since they said they wouldn't charge you the VAT at all upfront (this surprises me, but I don't know the workings of the Italian system), then raise the matter with them (and do this now).

If they come back saying that when the form is processed, this will be refunded etc, then I'd accept that, and that it will take time.

Something like this happened to me years ago in France.

I contested the charge for the VAT with my credit card as a billing error and that was the last I ever heard of it.

That hasn't been my experience - in the last few years almost all transactions I make by credit card when in Europe but not resident there ;) are processed as the OP described - I am charged the "tax free" price (which isn't tax free at all, only 50-60% of the tax is removed) and then I fill in the form at the airport when leaving the EU. I never see the remainder charged to my card.

I would do the same - seems like the easiest way of dealing with this.

Just to be clear, I am aware of the other method (where the store is effectivly offering to defer charging you the VAT component - providing the stamped export form is returned within a given time frame), however I think it is very much a depreciated and out of favour method - especially since it places a considerable loss liability on the merchant.

[Indeed, I'd be surprised if any still doing this didn't pre-auth the charge (i.e. put it on hold) on the card account, to cover themselves.]

Regarding the ammount refunded, while most shops do now charge for VAT refund processing (or for the administratiion of not-charging VAT), I'd be amazed if it was 40-50% they were charging! Which shops are these? What types of goods?

A 50% fee would be ridiculous.
- Are you sure you are calculating the VAT element that you think should be removed/refunded correctly?

I had the same bad experience as antjef. Is there really nothing we can do about it (other than paying up)??