A Reminder About Tax-Free Shopping

We haven't done much shopping on our travels this year. It's too expensive to ship things from places like South America and we don't have much extra room in our packs anyway. When John needed new sunglasses after Oktoberfest, we found a discount voucher at our hotel for a local optical store and headed off to select some new shades. As he made his purchase, the merchant asked if we wanted it to be "tax-free."

tax free shopping

Ask for a tax-free form when making purchases at stores overseas. Photo by jusben from MorgueFile.

I'd heard of tax-free shopping before, but usually think about it along with the airport - aisles of duty free products that I only purchase if I need to spend leftover currency or a party is coming up soon at home. The difference between these airport duty-free shops and tax free shopping isn't much when talking about the taxes (such as Value-Added or Goods and Services) foreigners don't pay when taking advantage of the scheme. The difference in the range of goods travellers can buy tax-free, however, is enormous.

Foreign visitors travelling to 50 countries, including the United Kingdom, Australia, Japan, Singapore, Turkey, Argentina, Mexico, Thailand,  Indonesia, Korea, Israel, Lebanon, Morocco, South Africa and most European countries can take advantage of their tax-exempt status as long as they export the goods within a certain timeframe. They are still liable for duty levied by their home countries, but as the limits for tax-free shopping are low in many places (€75.01 in Austria, for example) this should still allow for significant savings. This is one reason why so many people shop for designer handbags and expensive jewelery when on holiday overseas.

Once we started buying things tax free, we were hooked and bought a few other items we needed. It was so easy in Germany and Austria - we asked the sales staff for a tax-free form at check-out. We were never asked for our passports but these may be required by some merchants. When we depart the EU, we'll take the purchases and our receipts to the customs desk before we check in to get these forms stamped. Then we can send the forms back to the refund service providers and receive the tax back on our credit card.

I have heard that it's important to leave enough time at the airport when flying onwards in case of a long queue at the customs counter so this may not be worth it if your refund amount will be small. It's such a simple way to save money - makes me think that a good cheap last minute holiday would be to just to go shopping. Check out the rules for each country you visit and remember to claim your tax back.
What are your favourite items to buy overseas?

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16 Comments on "A Reminder About Tax-Free Shopping"

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Bteich11

Good article, I saved over $150 when I went to the UK earlier this year. I enjoy my shopping and went to Bicester Village. Every shop I went into were partners with this company tax free GB or GB Tax Free and they gave me a tax back receipt in the shops. Then on my way back to the States, I handed the receipts in at the airport and they gave me the cash back there and then. Nice surprise!
T

Geert @ Inspiring Travellers

It’s great, isn’t it? This is the first time I’ve done it but looking forward to getting some bonus cash back before we leave Europe! =)

Kyle

I absolutely never understood this concept, but I’m glad it worked for you!

Geert @ Inspiring Travellers

If you’re buying stuff in one store over a certain amount (let’s say 100 dollars), you can have the tax exempt – if it happens to be 20 per cent as it is in many European countries – it adds up! =)

Technosyncratic

I have just never understand duty free shopping at all. I guess you just don’t pay taxes… but if I was to buy something in Germany that wasn’t duty free, how much would I be paying in taxes anyway?  The amount seems negligible.  I never buy jewelry or handbags, though, so maybe it’s just applicable for big-ticket items?  Duty free is so confusing!

Geert @ Inspiring Travellers

It adds up if you’re buying a few expensive things – designer items, electronics, watches. I guess it depends on how much an hour of your time at the airport is worth – the tax savings can be up to 26 per cent in many instances. Germany is 19 per cent.

Jade

We bought tax free in Iceland and found it super easy to report in the airport upon leaving. Just make sure to do that!

Geert @ Inspiring Travellers

Glad to hear that it was easy! I’ll definitely be sure to remember and leave a bit of extra time in case of a queue! =)

Stephanie - The Travel Chica

I have only done once when I was in Vienna and bought some Swarovski jewelry.  Definitely worth it… if you’re not backpacking for a long period of time of course 🙂  I noticed signs for this in the swankier shops in Buenos Aires too.

Geert @ Inspiring Travellers

I wish I had known about this in Argentina!! I bought a bunch of clothes in BsAs and didn’t take advantage – hence the reminder here to everyone =)

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