Best Tax-Free Shopping Surprises

  • shopping in Singapore

    Photo: Asia Images Group Pte Ltd / Alamy

    1 of 14

    Tourist tax refunds are the norm in Europe. But lately they’re popping up in unexpected places. Here’s how to take advantage of tax-free shopping around the world.

    From May 2011 By

    There are times when looking like a tourist is smart advice—especially when an overseas shopkeeper asks if you’d like a VAT (Value Added Tax) receipt to qualify for a tax refund.

    Such rebate programs, available only to nonresidents, are commonplace in Europe. But there are a growing number of countries around the world where you can also get a refund—if you follow the right steps, beginning from the moment you make the purchase.

    Singapore kicked off the refund trend in Asia in 2004, and was soon followed by Indonesia, Japan, Korea, and Thailand. Unknown to many travelers, Mexico began offering tax refunds in 2008 (just a year after Canada canceled its rebate program for individual travelers).

    VAT and GST (Goods and Services Tax) place the tax burden on the end consumer, chargeable in the place where the merchandise is used. In many places, purchased goods taken out of the country by nonresidents aren’t subject to the VAT/GST, which ranges from 5 percent in Japan to 25 percent in Sweden, Norway, and Denmark. Even so, you usually have to pay the tax, at least temporarily, when buying an item. That’s why you’ll need to file the appropriate papers for a refund when you’re ready to leave.

    There are procedural nuances from place to place, but the basics are the same around the world. Buy your goods from an authorized tax-free-shopping merchant. Make the minimum required purchase (as low as $17 in Argentina, as much as $300 in Australia), if there is one, and have the clerk fill out the necessary tax forms. Bring your passport for identification. At the airport, show your goods to the Customs Office before you go through security, and have your tax forms stamped. You can then pack the goods into your luggage and check in (except in Australia, which requires you to carry on your tax-free purchases, apart from wine and oversize items). After you pass through security, submit your forms at a tax-refund kiosk for an immediate refund or to have a check mailed to your home.

    Beware, though, that many countries charge a commission on refunds. If you want the refund credited to your charge card, expect to pay $4 in South Africa. Israel has a sliding commission scale, ranging from as little as 5 percent to a high of 15 percent, depending on the refund amount. Mexico charges a whopping 35 percent commission.

    No matter where you do your tax-free shopping, remember:

    • Find out the minimum purchase requirement, if any, for a single item or total amounts, as well as the step-by-step procedures. Get details on dozens of countries from tax-free-shopping operators premiertaxfree.com and global-blue.com.
    • Look for merchants’ signs or window stickers that say Tax-Free Shopping or VAT Refunds.
    • Shop around. A lower price at a nonparticipating merchant might be a better deal than a higher price at a participating merchant, despite the refund.
    • You’ll almost always need to show your purchases to a Customs Officer at the airport or seaport.

    A refund might not add up to much money after all is said and done. But the bottom line is whether you want that money to end up in your pocket or with the excise man.

  • Argentina Tax-Free Shopping

    Photo: Javier Pierini

    2 of 14

    Argentina Tax-Free Shopping

    Things to Buy: Leather goods, cashmere sweaters, cigars.

    VAT/GST: 21 percent, included in price.

    Minimum Spend: 70 pesos (U.S. $17) for a single item.

    Insider Tip: Refunds apply only to goods made in Argentina, so forget about picking up a Samsung digital camera.

    Refund on a $500 Purchase: $87.

    Read more.

  • Australia Tax-Free Shopping

    Photo: Oriol Alamany / Alamy

    3 of 14

    Australia Tax-Free Shopping

    Things to Buy: Opal jewelry, Aboriginal art, sheepskin boots.

    VAT/GST: 10 percent, included in price. Separate WET (Wine Equalisation Tax) tax on wine, 14.5 percent.

    Minimum Spend: AUS $300 (U.S. $300) total in any single store within a 30-day period (no minimum spend required on any single receipt).

    Insider Tip: Most countries exclude alcohol from rebates, but the Aussies will refund your tax on wine. So bring some home. In fact, go wild and make it a case.

    Refund on a $500 Purchase: $45.

    Read more.

  • Indonesia Tax-Free Shopping

    Photo: Courtesy of Katherine Rally

    4 of 14

    Indonesia Tax-Free Shopping

    Things to Buy: Batik, wood carvings.

    VAT/GST: 10 percent, included in price.

    Minimum Spend: 500,000 rupiah (U.S. $55) on a single receipt.

    Insider Tip: Tax-free shopping is in its infancy here, so check the website for the limited list of participating stores.

    Refund on a $500 Purchase: $45.

    Read more.

  • Israel Tax-Free Shopping

    Photo: LOOK Die Bildagentur der Fotografen GmbH / Alamy

    5 of 14

    Israel Tax-Free Shopping

    Things to Buy: Designer clothing, fashion accessories, fine art.

    VAT/GST: 16 percent, included in price.

    Minimum Spend: 360 new shekels (U.S. $100) on a single receipt.

    Insider Tip: Your purchases and receipt will be sealed in a clear plastic bag at the store. Don’t open it until you present it for a VAT refund at the airport or your refund will be denied.

    Refund on a $500 Purchase: $69.

    Read more.

  • Japan Tax-Free Shopping

    Photo: Image Source / Alamy

    6 of 14

    Japan Tax-Free Shopping

    Things to Buy: Electronics, pearls, silk goods.

    VAT/GST: 5 percent “consumption tax,” included in price.

    Minimum Spend: 10,001 yen (U.S. $119) in any single store on any given day.

    Insider Tip: VAT refunds are issued in the store where the purchase is made. Your visa will be stamped accordingly, and you may be asked to produce the goods when you leave the country.

    Refund on a $500 Purchase: $24.

    Read more.

  • Korea Tax-Free Shopping

    Photo: Wendy Connett / Alamy

    7 of 14

    Korea Tax-Free Shopping

    Things to Buy: Jade, leather products, handicrafts.

    VAT/GST: 10 percent, included in price.

    Minimum Spend: 50,000 won (U.S. $43) in total receipts.

    Insider Tip: Antiques more than 50 years old can’t be exported without government approval.

    Refund on a $500 Purchase: $45.

    Read more.

  • Lebanon Tax-Free Shopping

    Photo: M Itani / Alamy

    8 of 14

    Lebanon Tax-Free Shopping

    Things to Buy: Jewelry, antiques, designer labels.

    VAT/GST: 10 percent, included in price.

    Minimum Spend: 150,000 pounds (U.S. $99) in any single store on any given day.

    Insider Tip: Don’t wear or use your purchases before departure or you may be disqualified from getting a refund.

    Refund on a $500 Purchase: $45.

    Read more.

  • Mexico Tax-Free Shopping

    Photo: Anne Menke

    9 of 14

    Mexico Tax-Free Shopping

    Things to Buy: Silver, Indian art, textiles.

    VAT/GST: 16 percent, included in price.

    Minimum Spend: 1,200 pesos (U.S. $96) in any single store.

    Insider Tip: You’ll need to submit a photocopy of your passport, boarding pass, and immigration form along with receipts to get your refund. Be prepared for the mandatory 35 percent commission fee.

    Refund on a $500 Purchase: $69.

    Read more.

  • Morocco Tax-Free Shopping

    Photo: Kelly Kollar

    10 of 14

    Morocco Tax-Free Shopping

    Things to Buy: Carpets, traditional dress, handicrafts.

    VAT/GST: 20 percent, included in price.

    Minimum Spend: 2,000 dirhams (U.S. $236) in any single store on any given day.

    Insider Tip: Gemstones don’t qualify for refunds.

    Refund on a $500 Purchase: $83.

    Read more.

  • Singapore Tax-Free Shopping

    Photo: Asia Images Group Pte Ltd / Alamy

    11 of 14

    Singapore Tax-Free Shopping

    Things to Buy: Antiques, electronics, fashions.

    VAT/GST: 7 percent, included in price.

    Minimum Spend: $100 Singapore dollars (U.S. $76) in any single store on any given day (three receipts maximum per day).

    Insider Tip: Singapore will introduce a new, simpler, electronic refund program in mid-2011.

    Refund on a $500 Purchase: $33.

    Read more.

  • South Africa Tax-Free Shopping

    Photo: Dook

    12 of 14

    South Africa Tax-Free Shopping

    Things to Buy: Diamond jewelry, Zulu beadwork, animal skins.

    VAT/GST: 14 percent, included in price.

    Minimum Spend: 250 rand (U.S. $36) in total receipts.

    Insider Tip: South Africa requires a lot of refund paperwork but has few restrictions on refundable items.

    Refund on a $500 Purchase: $61.

    Read more.

  • Thailand Tax-Free Shopping

    Photo: Peter Treanor / Alamy

    13 of 14

    Thailand Tax-Free Shopping

    Things to Buy: Tailor-made clothing, silk goods, jewelry.

    VAT/GST: 10 percent, included in price.

    Minimum Spend: 2,000 baht ($66) in any single store on any given day and a total minimum of 5,000 baht (U.S. $166).

    Insider Tip: Small luxury items (watches, jewelry, etc.) valued at more than $330 must be reinspected after immigration check, so don’t pack them in your checked luggage.

    Refund on a $500 Purchase: $45.

    Read more.

  •  

    14 of 14

  • shopping in Singapore

    There are times when looking like a tourist is smart advice—especially when an overseas shopkeeper asks if you’d like a VAT (Value Added Tax) receipt to qualify for a tax refund.

    Such rebate programs, available only to nonresidents, are commonplace in Europe. But there are a growing number of countries around the world where you can also get a refund—if you follow the right steps, beginning from the moment you make the purchase.

    Singapore kicked off the refund trend in Asia in 2004, and was soon followed by Indonesia, Japan, Korea, and Thailand. Unknown to many travelers, Mexico began offering tax refunds in 2008 (just a year after Canada canceled its rebate program for individual travelers).

    VAT and GST (Goods and Services Tax) place the tax burden on the end consumer, chargeable in the place where the merchandise is used. In many places, purchased goods taken out of the country by nonresidents aren’t subject to the VAT/GST, which ranges from 5 percent in Japan to 25 percent in Sweden, Norway, and Denmark. Even so, you usually have to pay the tax, at least temporarily, when buying an item. That’s why you’ll need to file the appropriate papers for a refund when you’re ready to leave.

    There are procedural nuances from place to place, but the basics are the same around the world. Buy your goods from an authorized tax-free-shopping merchant. Make the minimum required purchase (as low as $17 in Argentina, as much as $300 in Australia), if there is one, and have the clerk fill out the necessary tax forms. Bring your passport for identification. At the airport, show your goods to the Customs Office before you go through security, and have your tax forms stamped. You can then pack the goods into your luggage and check in (except in Australia, which requires you to carry on your tax-free purchases, apart from wine and oversize items). After you pass through security, submit your forms at a tax-refund kiosk for an immediate refund or to have a check mailed to your home.

    Beware, though, that many countries charge a commission on refunds. If you want the refund credited to your charge card, expect to pay $4 in South Africa. Israel has a sliding commission scale, ranging from as little as 5 percent to a high of 15 percent, depending on the refund amount. Mexico charges a whopping 35 percent commission.

    No matter where you do your tax-free shopping, remember:

    • Find out the minimum purchase requirement, if any, for a single item or total amounts, as well as the step-by-step procedures. Get details on dozens of countries from tax-free-shopping operators premiertaxfree.com and global-blue.com.
    • Look for merchants’ signs or window stickers that say Tax-Free Shopping or VAT Refunds.
    • Shop around. A lower price at a nonparticipating merchant might be a better deal than a higher price at a participating merchant, despite the refund.
    • You’ll almost always need to show your purchases to a Customs Officer at the airport or seaport.

    A refund might not add up to much money after all is said and done. But the bottom line is whether you want that money to end up in your pocket or with the excise man.

  • Argentina Tax-Free Shopping

    Argentina Tax-Free Shopping

    Things to Buy: Leather goods, cashmere sweaters, cigars.

    VAT/GST: 21 percent, included in price.

    Minimum Spend: 70 pesos (U.S. $17) for a single item.

    Insider Tip: Refunds apply only to goods made in Argentina, so forget about picking up a Samsung digital camera.

    Refund on a $500 Purchase: $87.

    Read more.

  • Australia Tax-Free Shopping

    Australia Tax-Free Shopping

    Things to Buy: Opal jewelry, Aboriginal art, sheepskin boots.

    VAT/GST: 10 percent, included in price. Separate WET (Wine Equalisation Tax) tax on wine, 14.5 percent.

    Minimum Spend: AUS $300 (U.S. $300) total in any single store within a 30-day period (no minimum spend required on any single receipt).

    Insider Tip: Most countries exclude alcohol from rebates, but the Aussies will refund your tax on wine. So bring some home. In fact, go wild and make it a case.

    Refund on a $500 Purchase: $45.

    Read more.

  • Indonesia Tax-Free Shopping

    Indonesia Tax-Free Shopping

    Things to Buy: Batik, wood carvings.

    VAT/GST: 10 percent, included in price.

    Minimum Spend: 500,000 rupiah (U.S. $55) on a single receipt.

    Insider Tip: Tax-free shopping is in its infancy here, so check the website for the limited list of participating stores.

    Refund on a $500 Purchase: $45.

    Read more.

  • Israel Tax-Free Shopping

    Israel Tax-Free Shopping

    Things to Buy: Designer clothing, fashion accessories, fine art.

    VAT/GST: 16 percent, included in price.

    Minimum Spend: 360 new shekels (U.S. $100) on a single receipt.

    Insider Tip: Your purchases and receipt will be sealed in a clear plastic bag at the store. Don’t open it until you present it for a VAT refund at the airport or your refund will be denied.

    Refund on a $500 Purchase: $69.

    Read more.

  • Japan Tax-Free Shopping

    Japan Tax-Free Shopping

    Things to Buy: Electronics, pearls, silk goods.

    VAT/GST: 5 percent “consumption tax,” included in price.

    Minimum Spend: 10,001 yen (U.S. $119) in any single store on any given day.

    Insider Tip: VAT refunds are issued in the store where the purchase is made. Your visa will be stamped accordingly, and you may be asked to produce the goods when you leave the country.

    Refund on a $500 Purchase: $24.

    Read more.

  • Korea Tax-Free Shopping

    Korea Tax-Free Shopping

    Things to Buy: Jade, leather products, handicrafts.

    VAT/GST: 10 percent, included in price.

    Minimum Spend: 50,000 won (U.S. $43) in total receipts.

    Insider Tip: Antiques more than 50 years old can’t be exported without government approval.

    Refund on a $500 Purchase: $45.

    Read more.

  • Lebanon Tax-Free Shopping

    Lebanon Tax-Free Shopping

    Things to Buy: Jewelry, antiques, designer labels.

    VAT/GST: 10 percent, included in price.

    Minimum Spend: 150,000 pounds (U.S. $99) in any single store on any given day.

    Insider Tip: Don’t wear or use your purchases before departure or you may be disqualified from getting a refund.

    Refund on a $500 Purchase: $45.

    Read more.

  • Mexico Tax-Free Shopping

    Mexico Tax-Free Shopping

    Things to Buy: Silver, Indian art, textiles.

    VAT/GST: 16 percent, included in price.

    Minimum Spend: 1,200 pesos (U.S. $96) in any single store.

    Insider Tip: You’ll need to submit a photocopy of your passport, boarding pass, and immigration form along with receipts to get your refund. Be prepared for the mandatory 35 percent commission fee.

    Refund on a $500 Purchase: $69.

    Read more.

  • Morocco Tax-Free Shopping

    Morocco Tax-Free Shopping

    Things to Buy: Carpets, traditional dress, handicrafts.

    VAT/GST: 20 percent, included in price.

    Minimum Spend: 2,000 dirhams (U.S. $236) in any single store on any given day.

    Insider Tip: Gemstones don’t qualify for refunds.

    Refund on a $500 Purchase: $83.

    Read more.

  • Singapore Tax-Free Shopping

    Singapore Tax-Free Shopping

    Things to Buy: Antiques, electronics, fashions.

    VAT/GST: 7 percent, included in price.

    Minimum Spend: $100 Singapore dollars (U.S. $76) in any single store on any given day (three receipts maximum per day).

    Insider Tip: Singapore will introduce a new, simpler, electronic refund program in mid-2011.

    Refund on a $500 Purchase: $33.

    Read more.

  • South Africa Tax-Free Shopping

    South Africa Tax-Free Shopping

    Things to Buy: Diamond jewelry, Zulu beadwork, animal skins.

    VAT/GST: 14 percent, included in price.

    Minimum Spend: 250 rand (U.S. $36) in total receipts.

    Insider Tip: South Africa requires a lot of refund paperwork but has few restrictions on refundable items.

    Refund on a $500 Purchase: $61.

    Read more.

  • Thailand Tax-Free Shopping

    Thailand Tax-Free Shopping

    Things to Buy: Tailor-made clothing, silk goods, jewelry.

    VAT/GST: 10 percent, included in price.

    Minimum Spend: 2,000 baht ($66) in any single store on any given day and a total minimum of 5,000 baht (U.S. $166).

    Insider Tip: Small luxury items (watches, jewelry, etc.) valued at more than $330 must be reinspected after immigration check, so don’t pack them in your checked luggage.

    Refund on a $500 Purchase: $45.

    Read more.

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