New digital system will help foreign shoppers get faster VAT refunds

A record 68 million international travelers visited Spain last year, making this the third top destination in the world.

The tourism sector has been trying to diversify away from the sun-and-sand formula, in a bid to attract visitors who are more interested in cities and shopping than in beach bars.

With this type of customer in mind, the Spanish tax agency has launched DIVA, a project aimed at simplifying the paperwork for non-EU citizens seeking value-added tax (VAT) refunds.

Shopping tourism is of great interest, and if travelers have a satisfactory experience, Spain could position itself as a destination of reference

Lluis Llorca, Global Blue Spain

Applicants will save time by avoiding the lines to get the invoices stamped by customs officers. Instead, the invoices will be digitally recorded at the time of purchase.

The tourism and trade secretaries have worked together to streamline international shoppers’ experience in Spain. Their figures show that Britons and Germans – who make up the largest chunk of tourists – are the least interested in buying goods while on vacation.

By contrast, Chinese tourists are the biggest spenders when they go abroad. Global Blue, a tax-free shopping network operator, estimates that in 2016 the average shopping budget of a Chinese visitor to Europe will be around €3,500.

Spain only represents 5% of global spending on shopping, compared with France or Italy’s 20%. It ranks fifth in the European Union luxury market, behind France, Italy, Germany and Switzerland, according to the Spanish Luxury Association.

A test run of digital VAT refunds was recently completed at the T1 terminal of Madrid airport. The goal is to create a digital invoice validation system so that international visitors may get their money back faster.

The Loewe store on Madrid’s Gran Vía, the refund intermediary Global Blue and the Spanish tax agency collaborated on this early test.

Luis Llorca, director general of Global Blue Spain, says that the test run was “satisfactory” and that around three million travelers will soon benefit from the new service.

“Stores will provide tourists with a form that includes a code bar or QR, which will need to be scanned at a VAT refund stand before going home,” he said. “There will be greater oversight and less paperwork.”

At present, tourists can get invoices stamped by a customs official and send them back to the store, or else get immediate refunds from authorized intermediaries.

“It is one more element, another piece of the puzzle,” says Llorca, explaining that Barcelona and Madrid make up 90% of all refund forms that get stamped in Spain.

“Shopping tourism is of great interest, and if travelers have a satisfactory experience, Spain could position itself as a destination of reference,” he adds.

There is no official inauguration date for the new system yet. The tax agency said that it will be introduced gradually, beginning with locations with the highest volume of refund stamping requests. In Andalusia, scanning stands will be set up in Algeciras, Tarifa, La Línea de la Concepción and Málaga airport. More will be distributed at Palma de Mallorca airport, at T1 and T2 terminals in Barcelona’s El Prat airport, at T1, T4 and T4S terminals in Madrid’s Barajas airport, at the airports of Valencia and Alicante, and at the maritime station of Alicante.

English version by Susana Urra.