A 10% V.A.T. (value-added tax) is included in the rate at all hotels except those at the upper end of the range. You'll often have to pay a supplementary City Tax (in cash) at your hotel, varying from €1 per night to Rome's exorbitant €5 per night, as well.
No tax is added to the bill in restaurants. A service charge of approximately 10%–15% is often added to your check; in some cases a service charge is included in the prices.
The V.A.T. is 22% on clothing, wine, and luxury goods. On consumer goods it's already included in the amount shown on the price tag (look for the phrase "IVA inclusa"), whereas on services it may not be. If you're not a European citizen and if your purchases in a single day total more than €154.94, you may be entitled to a refund of the V.A.T.
When making a purchase, ask whether the merchant gives refunds—not all do, nor are they required to. If they do, they'll help you fill out the V.A.T. refund form, which you then submit to a company that will issue you the refund in the form of cash, check, or credit card adjustment.
Alternatively, as you leave the country (or, if you're visiting several European Union countries, on leaving the EU), present your merchandise and the form to customs officials, who will stamp it. Once through passport control, take the stamped form to a refund-service counter for an on-the-spot refund (the quickest and easiest option). You may also mail it to the address on the form (or on the envelope with it) after you arrive home, but processing time can be long, especially if you request a credit card adjustment. Note that in larger cities the cash refund can be obtained at in-town offices prior to departure; just ask the merchant or check the envelope for local office addresses.
Global Blue is the largest V.A.T.-refund service with 270,000 affiliated stores and more than 700 refund counters at major airports and border crossings. Premier Tax Free is another company that represents more than 150,000 merchants worldwide; look for their logos in store windows.
Global Blue. 866/706–6090; 421232/111111; 00800/32111111; www.global-blue.com.
Premier Tax Free. 905/542–1710; 06/69923383; www.premiertaxfree.com.