Tax Free: how to refund money from purchases made abroad
Tax Free allows you to return 8–27% of the value of purchases made abroad. Lifehacker tells how to arrange it.
What is Tax Free
Tax Free is a system of returning value added tax on a purchase made by a foreign citizen.
Value added tax is included in the final cost of the goods. This money is transferred by the seller to the state budget, from where it is distributed to various social programs. Foreigners are not involved in the social mechanisms of the country, and therefore are exempt from tax. This right is drawn up not by means of a discount, but by returning excessively paid money after leaving the country.
How much can you save?
The amount of money returned depends on the amount of value added tax established in the specific country where the purchase was made. The minimum share is 8%, this is the size of Tax Free set in Japan. Hungary remains the most generous in the list of countries providing Tax Free: by default, 27% of the price is returned here.
At the same time, the amount returned in reality may be significantly less than the amount that the tourist is counting on. Money is usually returned through a third-party organization with which the store has a contract. For services, the intermediary will leave part of the funds to himself. The largest companies working with Tax Free are Planet, Global Blue, Innova Tax Free.
What to buy to get Tax Free
In most countries, tax can be refunded when buying clothes, shoes, household and electronic equipment, watches and jewelry.
At the same time, online shopping, books, food, medicine, souvenirs and services may not be subject to the regulations on VAT refunds to foreigners.
“If the VAT on the goods in the country is 0%, you will not be able to issue a refund. For example, in the UK, this rate applies to children's clothing, books, tea.
In addition, the tax cannot be refunded on purchases that cannot be taken with you and put in a bag to show to the customs officer at the border. This includes payments for services, tickets for musicals and other performances, hotel accommodation, lunch at a restaurant, ”says tax refund expert Charlotte Smith.
How to get Tax Free
To make a purchase
A sticker is placed on the door or window of the store that provides receipts for Tax Free returns. The information is usually in English, so it is not necessary to be a polyglot to understand it.
The sticker will also indicate the name of the company through which you will issue a refund.
Checkout Tax Free
To return Tax Free, the seller must issue special checks. In any country, they can be requested by the keywords Tax Free voucher or Tax Free form. This document is attached to a standard cash register receipt. For paperwork you will need a passport or a photocopy of it. Make sure that all personal data are transferred to the form correctly, as errors can become the basis for refusal of a tax refund.
Each country has a minimum amount for which Tax Free checks are issued. For example, in Germany it is 25 euros, in France - 175 euros, in the Netherlands - 50 euros, in the UK - 30 pounds, in Argentina - 70 Argentine pesos, in Japan - 5 thousand yens.
Purchases for this amount must be made in one check. In large shopping centers, sometimes there are special departments in which they will collect data on your purchases from different stores in one common document.
Food and non-food items cannot be credited in one check.
Put a stamp on customs
When leaving the country where the purchases were made, you must put a stamp on the export of things at customs. For this, service employees need to present receipts and goods in packaging, without signs of use. For credibility, you can save branded packages of stores.
The EU countries are considered a single zone, so you need to put a mark on the export in the country through which you leave the EU.
The stamp is affixed in a special office at the customs, you should look for it on the plate Tax Free office or or VAT Refund. If it is located at the check-in desks, just contact it and get the appropriate stamps. Sometimes the customs office for registration of Tax Free is located at the reception. In this case, transfer the things purchased in the country to hand luggage, so that there is something to confirm the fact of purchase.
Checks have their own expiration date, during which you need to put a customs stamp on them. Most often, a seal on documents should be received within three months from the date of purchase. In Switzerland, Norway, Morocco, the term is reduced to one month.
On the subject: How to exchange or return an unwanted gift in US stores
There are three ways to return VAT in tangible terms:
1. At the airport
For checks bearing the customs stamp, contact the Tax Refund office of the intermediary company that is listed on your documents. The required amount can be given in cash or transferred to a card whose data you provide.
A company can withhold interest for a tax on cash, funds will be credited to the card without deduction. Some companies install special mailboxes at airports where you can drop the check with the customs stamp and the number of the bank card to which the funds will come.
“If you want to get VAT in cash at the airport, be careful. Such a service can cost an additional commission of 10–20% of the VAT amount due to the unfavorable exchange rate and an additional fee for a cash payment. Therefore, if you do not feel an urgent need for cash, it is better to save money and wait for the payment to arrive at your specified bank account or card after arriving home, ”says Charlotte Smith.
2. When crossing the border by land
The Tax Refund office can be located at the checkpoint. In this case, you need to get a stamp from the employees of the department, and then apply for a refund.
3. Via mail
Mail the check with the customs stamp to the intermediary company. The address must be indicated on the document itself. Do not forget to enter the bank card number in the form. Money will come to the account in an average of 1-2 months.
4. At the bank
In some cases, you can return the money at one of the banks, which cooperates with an intermediary company to pay Tax Free. Global Blue disburses money in Kaliningrad, Moscow and St. Petersburg through Intesa Bank, in Pskov - through AKB Slavia; Innova Tax Free - through SMPbank in Moscow, Chelyabinsk, St. Petersburg, Kaliningrad, Yekaterinburg. A complete list of financial institutions that issue money can be seen on the website of your intermediary.
In rare cases, the tax can be returned to you in the store immediately after purchase. However, then you will definitely need to send a Tax Free check with a customs stamp by mail, otherwise the issued amount will be debited from your card.
Why may they refuse to refund tax
- The Tax Free form is filled out with errors.
- You have not put a stamp at customs on the export of things from the country where you bought them.
- The dates on the cash receipt and Tax Free form do not match. This rule is not respected in all countries. For example, in Spain summarize purchases made in the same store on different days.
According to the instructions, you can apply for VAT with a check bearing a customs stamp, from three months (Belgium, Greece, Morocco, and so on) to infinity (Netherlands, Lithuania, Lebanon). In practice, it is better not to delay the appeal for money, otherwise you may be refused.
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