Why you should always request a VAT form when buying something expensive abroad
Ever see a Gucci or Longchamp or Burberry store at an airport and wonder who’s shopping at the terminal? Planners and savers, that’s who. If you’ve had your eye on a luxury item, or just want to splurge a little while out of the country, shopping worldwide brands abroad can be your own way to save on a splurge purchase — no storewide sale or coupon required.
In countries across the globe, non-residents aren’t required to pay sales tax on qualifying purchases over a certain amount, meaning those designer shoes you’ve long coveted, while they may be priced similarly to the version you like at home, can come without the tax added on. Outside of duty-free airport stores, most stores in any given nation will require you pay sales tax upfront, but request a VAT (value-added tax) form, keep your receipts and save a little time at the airport to process your tax refund. Note that some shops will require you present your foreign-issued passport as well as your departure ticket when requesting a VAT form, so carry the documentation on you while shopping to avoid any complications.
Travel guru Rick Steves also points out that if you’re shipping goods purchased from abroad, you won’t have to pay the tax, so if the shipping fee isn’t too high, you may still save yourself some hassle and cash just getting your new purchases delivered overseas. He also notes that nothing is promised, and while plenty of VAT offices say they’ll refund your pre-paid tax via check or credit card reimbursement, there are occasions when this never happens.
In some countries in the European Union, for example, you may see your VAT refund in cash as soon as your form is stamped at the airport. Australia’s Tourist Refund Scheme entitles travelers to a refund on goods and services tax (GST) and wine equalisation tax (WET), providing they have the proper documentation.
Keep in mind that some tax refund offices will require you to present the goods you purchased, so if they’re in checked luggage, you won’t be able to get your refund. This is why buying alcohol and liquids (like makeup) at post-security Duty Free stores may be more practical.
Ready to shop and travel? Here are the details on getting your money back at these popular shopping destinations:
If David Sedaris’ essay on shopping in Tokyo doesn’t have you psyched to purchase all sorts of overpriced sartorial oddities, learning that Japan’s tax-free system entitles foreign visitors to not pay the 8% (increasing to 10% in late 2019) consumption tax might. Unlike many countries, Japan does not process the refunds at the airport, but rather at tax-free stores, where paperwork is processed on-site, given that you’ll be taking the items you purchased out of Japan. Purchases that total 5000 yen (about $45 USD), qualify.
While there’s no guarantee for what Brexit will do to your shopping spree in London, know that a VAT refund is still possible for visitors who live outside of the UK. You’ll have to request a VAT form while shopping, show the goods and form at customs while leaving the UK and either see an immediate refund or arrange for another method to receive payment. Note that some vendors may charge a fee for processing the form.
Shop Paris’ Champs-Elysees at up to a 20% discount, thanks to France’s high VAT rate, and your status as a visitor eligible for a tax refund. To shop tax-free, you’ll need to spend at least 175 euros (about $196 USD) on your purchase, present your passport and fill out a Global Blue VAT refund form to process at the airport. Keep in mind that customs officials may require you to prove that the goods are new and unused, so if you’re buying a designer dress to wear out for a night on the town, try and keep the tags on...
The notoriously well-air-conditioned luxury malls on this island of stylish residents and travelers are a shopper’s haven. This is, in part, due to Hong Kong being a tax-free island. That’s right, there’s no sales tax on your shopping purchases. Disposable bags will incur a small fee, however, so BYO totes.
With the U.S. dollar currently strong against the Canadian currency — 1 CAD = $0.75 USD — a northern shopping trip may be in order. The tourist tax rebate, however, has been suspended since 2007, so don’t bank on getting your tax back. You may save money, however, on approved accommodations and tours in Canada, which qualify for a visitors tax incentive.