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."
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?