We are submerged in taxes. From daily necessities to luxurious splurges, taxes are inevitable. The concept of GST and VAT prevails in many countries. Taxes contribute to the growth of the country and the liability to contribute to this growth shouldn’t be borne by non-residents. Therefore, foreign travelers are eligible for a refund on these taxes levied on goods purchased within the country.
A whooping number of over 50 countries have a tax refund policy for international tourists. While some countries implement this service through government officials, others have specifically appointed organizations to do so.
Step 1: AT THE STORE – FORM FILLING
Identify yourself as a foreign tourist to the store staff and request for a tax invoice for the goods purchased. You will be required to show your passport or a copy of it to verify your nationality so that you can be issued such a document. The refund form would consist of points like the description of the goods, details about the seller and the buyer, etc. Provide correct details so as to avoid any disputes during the successive stages of the process. The minimum amount of expenditure needed to be eligible for the refund process varies from country to country.
Certain stores allow you to accumulate all the invoices and then finally present them to their customer service counter and make one final invoice. However, a certain timeframe is involved in the same, making it imperative to check for such a flexibility before making the first invoice.
Step 2: AT THE AIRPORT – CUSTOMS STAMP
Prior to check-in, the refund form needs to be presented at the Customs Desk along with your passport, boarding pass, shopping receipts and duly filled form. It is important that the items purchased are not used or a part of your check-in, as the Customs Officer will need to inspect them. On inspection and approval, the form would be stamped – confirming eligibility for refund. Ensure you have sufficient time at hand to complete these formalities.
Since the baggage for some passengers returning home via a connecting flight (Domestic flight to International flight) would be checked-in at the domestic terminal, please get in touch with relevant authorities before checking-in your bags.
Step 3: AT THE AIRPORT – TAX REFUND
Finally, collect the refund in either cash or on your credit card from the Refund Counter after presenting the stamped form to them. If you choose the credit card option, the refund will be reflected in your account within 5 – 10 days (this may vary from country to country).
For passengers in a hurry, certain companies like Global Blue provide the facility of mailing the stamped form in their Global Blue envelope and receiving the refund on the credit card. It takes roughly 3 weeks for the money to be refunded in this case.
Time taken for steps 2 and 3: Up to 90 minutes. Make sure you reach the airport well in advance so that you have sufficient time to complete this process.
Calculation of Refund:
The refund receivable equals the amount of VAT after deducting the service fee charged by the provider (if any).
For instance, on purchasing a pair of shoes worth €100, inclusive of VAT at the rate 20%, the refund would be €16.50 less service fee applied by the provider.
(Working: Shoes = €100 inclusive of VAT at 20%
Price of shoes = €83.50 + VAT = €16.50)
Goods not included under the Tax Refund policy:
- Mail ordered goods or internet sales delivered outside the country
- Goods used in the country, such as a perfume, food items
- Service charges such as hotel, restaurant, medical services
- Purchases amounting to less than the required total as mentioned in the country’s law
- Beer, spirits or tobacco products
- Goods without original tax copy or purchase receipts
- Goods not carried with the traveler for inspection.
Some of the organizations providing the Tax Refund services are listed below:
1. Duty Free Shopping includes a limited spread of stores, most commonly those that are situated on airports or in other travel related environments. They offer goods that are exempted from certain local or national taxes.
2. Global Blue cover a wider and larger variety of stores with over 270,000 shopping partners in their team. Credit cards supported by Global Blue include MasterCard, Visa, Diners, Amex, JCB and CUP.
The “SHOP TAX FREE Card” saves the travelers the trouble of refilling a refund form at each store checkout. It automatically fills the personal details of the traveler thereby saving time and providing convenience.
Global Blue Tax Free Shopping is available in the following countries:
3. GB Tax Free provides another benefit programme for travelers. Partnered with numerous renowned retail brands across UK, it is one of the fastest growing Tax refund organization. All non-EU residents visiting Great Britain are entitled to the refund of local sales tax, a.k.a VAT.
4. Premier Tax Free is the closest competitor to Global Blue. The key services provided by them are the Tax Free, DCC and cultural training, which cater to international shoppers and enable quicker refund transactions via numerous refund points spanning across about 31 countries.
Premier Tax Free ensures standardization by deploying the same processes across all their stores. Additionally, they use technology to their fullest. Passport readers and other devices are set up to accelerate the process of manually filling the Tax refund form. They appoint tour guides to help travelers in accomplishing this task.
5. FEXCO Tax Free promotes Tax free shopping services to Merchants and international tourists visiting Ireland. First issued in 2010, the “FEXCO HORIZON Card” saves the travelers the trouble of refilling a refund form at each store checkout. The card can be swiped to issue a report of all the transactions and their respective VAT refunds. A hard copy of this report needs to be submitted in order to claim the refund. The refund reflects in the traveler’s bank account within 4 to 6 weeks of completing all the formalities.
6. Australia offers the Tourist Refund Scheme (TRS). It lets you claim the refund of Goods and Services Tax (GST) and Wine Equalization Tax (WET) bought from Australia within 60 days of leaving the country.
7. Some of the other providers of this service are:
- Ushop Tax Free
- Euro Refund
- Euro Free Shopping
- Louisiana Tax Free Shopping
- Texas Tax Free Shopping