Before you shop tax free, it helps to know whether you meet the requirements. The main rule is simple, but there is one detail about certain special territories that often causes confusion when you register. Here is what you need to know.
The main rule: living outside the EU
You qualify for tax free if you permanently reside outside the European Union (in tax terms, outside the EU VAT territory) and you are visiting, buying goods that you will take with you when you leave.
In practice, this means four things:
You reside outside the EU. Your permanent address, as shown on your passport or ID document, is outside the Union.
You buy for personal use. The goods are for your private use, not for resale or commercial purposes.
You take the goods with you. They leave the EU in your personal luggage.
You validate at customs before leaving. The exemption only becomes final once you prove at customs that the goods are leaving the EU, within three months of the purchase.
One important point: what counts is where you live, not your nationality. If you are an EU citizen but live outside the EU, you qualify; and if you are a non-EU citizen but reside inside it, you do not.
The detail that causes confusion: special territories
Here is the point worth understanding well. Some places belong to an EU country but, for tax purposes, fall outside the Union. If you live in one of them, you do qualify for tax free, even though the country it belongs to (Denmark, France, Spain and others) is inside the EU.
Because these territories are fiscally independent, they appear in the system under their own name and not under the country's. So, when you register your residence in your Stamp ID:
If you live in Greenland, select "Greenland", not "Denmark".
If you live in French Polynesia, select "French Polynesia", not "France".
If you look only for the country, you may not find your region, or you may be registered by mistake as an EU resident and lose the exemption. Always search by the name of your territory.
Territories that appear under their own name
By country of origin, these are the main ones:
Denmark: Greenland, Faroe Islands
France: French Polynesia, New Caledonia, Wallis and Futuna, Saint Pierre and Miquelon, Saint Barthélemy, and the overseas departments (Guadeloupe, Martinique, French Guiana, Réunion, Mayotte and Saint-Martin)
Spain: Canary Islands, Ceuta, Melilla
Italy: Livigno, Campione d'Italia
Germany: island of Heligoland, territory of Büsingen
Greece: Mount Athos
Finland: Åland Islands
Netherlands: Aruba, Curaçao, Sint Maarten (Dutch part), Bonaire, Sint Eustatius and Saba
Careful: not every remote region qualifies
The opposite case also exists. Some regions that seem far away are in fact part of the EU VAT territory, so their residents do not qualify for tax free and appear under the normal country:
Portugal: Azores and Madeira
Spain: Balearic Islands (Mallorca, Menorca, Ibiza and Formentera)
Monaco: treated as French territory for tax purposes
If you live in one of these regions, you simply appear as a resident of your country (Portugal, Spain or France) and cannot claim the exemption.
Quick answers
Does my nationality matter? No. What determines your right is your place of permanent residence, not the country of your passport.
I live in the EU. Can I claim tax free? No. If your address is inside the Union, you do not qualify for the exemption.
I live in the Canary Islands. Do I qualify? Yes. The Canary Islands sit outside the EU VAT territory, so you should register as a resident of "Canary Islands", not "Spain".
I live in Madeira. Do I qualify? No. Madeira is inside the EU VAT territory, so you register as a resident of Portugal and cannot claim tax free.
Where can I find the official list? The European Commission publishes the full list of territories inside and outside the scope of EU VAT on its Taxation and Customs Union website.