For savvy shoppers, understanding the concept of tax-free shopping can add a significant advantage during travels. The idea behind tax-free is that since you are not a resident of the country, you aren’t required to pay the country’s tax. Here’s a quick guide on how to take advantage of tax-free shopping on your next trip.
Two Types of Tax-Free Shopping
Tax-free shopping refers to the ability to purchase items without the addition of local sales tax or VAT. This can happen in two main scenarios: purchasing goods in duty-free shops at airports or buying goods in a foreign country and then applying for a tax refund.
How to Shop Tax-Free
Shopping duty-free is pretty straightforward, so here’s a quick guide on how to take advantage of a VAT refund:
- Not all stores participate in the VAT refund scheme. If you’re not sure, ask. At the time of purchase, you’ll need to inform the cashier that you intend to claim a VAT refund.
- At the point of purchase, you’ll need to fill out a tax-free form provided by the store. You’ll need your passport for this.
- When departing the country, present your purchases, receipts, and completed tax-free forms to customs for validation. This usually needs to be done before you check in your luggage.
- Once your forms are stamped, you can claim your refund immediately at a refund booth at the airport. Refunds can be received in various forms such as cash, credit to a bank card, or even as a transfer to a digital wallet.
