Residents of England, Scotland and Wales can claim VAT refunds on retail purchases in Portugal from 1 January 2021, once Britain has left the European Union.

British residents from England, Scotland and Wales will be classified as non-EU residents from 31 December 2020 and be subject to the same eligibility criteria as any other tax free shopping nationality.

Those wishing to purchase tax free must reside in England, Scotland or Wales and show their passport, along with a separate document providing proof of address. British nationals residing in Northern Ireland or within the EU are ineligible to shop tax free in Portugal.

British residents must also meet the minimum spend criteria of €50/$61 plus VAT and export the unused goods outside the EU within three months.

Once eligibility is determined, British tax free shoppers must follow the usual process of completing a tax free form. This will be validated at Customs when they leave the EU before returning to the UK.

STRONG OPPORTUNITY FOR RETAILERS

A statement from Sterling Global, the official UK representative of the Portuguese National Tourism Board said: “The UK is a major source of tourism for Portugal, with more than 2.1 million British tourist visits in 2019.

“Their retail activity equated to €79 million spent in Portugal stores, with clothing and accessories and non-specialised retail being the categories with the largest share of British spend.

“With the price of goods in Portugal being on average 5-10% cheaper than in the UK, combined with the additional savings offered by tax free shopping, the purchase power of UK shoppers in Portugal is set to increase up to 20%. This will create a strong opportunity for local retailers to maximise their in-store revenue.”