Value Added Tax (VAT) is a tax on goods and services in Europe. It is similar to the sales tax in the United States. You may have good reason to want to avoid paying VAT: with the standard VAT rate skyrocketing to 20 percent as of 4 January 2011, the prospect of saving a huge chunk of your money may seem very attractive. There are several legal ways you can avoid paying VAT.
Limit your purchases to tax-free goods and services. VAT is added to a variety of consumer goods and service, but many essentials items are not taxed at all: food, postage stamps, books, newspapers and baby clothes are all VAT-exempt or taxed at a 0 percent rate. Click on the Business link link in Resources to see which goods you can purchase without paying VAT.
Purchase the item from a non-European Union (EU) country and have the item shipped to you. This option makes sense if the shipping cost is less than the potential VAT on the item. For example, a £240 necklace purchased in the United Kingdom would cost £200 outside of the EU. If the shipping cost is £10, you save £30 on the transaction.
Visit another country and take extra luggage. Pack the luggage with consumer goods: as long as you hand-carry items (like your luggage), the luggage and contents generally are not subject to taxes. (There are exceptions for large amounts of money: check with customs officials in your country for guidelines). You should take into account the extra cost of checked baggage. Ask airlines about weight restrictions.