All products sold in Germany are liable for a value-added tax (VAT). The general rate is 19 percent, however the reduced rate of seven percent is used for magazines, books and food. These rates are similar to sales taxes elsewhere; however, VAT is always included in a product's list price.
Many shops and outlets in Germany have joined a refund system which uses tax-free cheques issued by a tax-refunding service provider. Customers from non-EU countries who plan to take an item home may request a refund cheque upon purchase in order to have their VAT refunded. When leaving the European Union, the goods must first be presented to a customs officer, who will stamp the tax-free cheque, thus verifying the goods will be exported. The cheque can then be turned in to and refunded by the tax-refunding service provider. These service companies generally operate at major airports, ferry ports and other ports of entry and exit.
Alternatively, customers can also forward a completed proof of export form along with proof of the customer's foreign residence directly to the vendor, who can then refund the VAT collected. The buyer can save him or herself the aforementioned service charge but must handle the necessary paperwork him or herself and may be refunded less, in the end, as a result of bank fees for international money transfers. More information on this procedure and on tax free shopping in general is available from the German Customs Administration.