What is a tax free system and how to use it?
If, when you go abroad, you see the words “tax-free for tourists” on the doors, then it is better to shop there. In translation, the phrase means: “without taxes for tourists” and gives you the right to save.
What is tax free and what does it eat?
I’ll try to tell in simple words. Tax free – this is a kind of VAT tax refund method, which we call VAT. In the countries of the European Union, as well as in many other countries, all goods that can only be bought in the markets are taxed from 5 to 27 percent. And you, as a foreign buyer, have the opportunity to save on purchases and return this tax to yourself.
Why is refund valid? VAT is charged domestically. When goods are exported from the country, the price without VAT is set on it. That is, if you went on a trip and decided to buy all sorts of things in foreign stores, then pay the price with tax. But when you return home, then the same goods will be exported at a cost without VAT, and you can return the amount of tax itself. The system for returning this money is called tax free.
To begin with, we will figure out who can use the free dues. You can get part of the cost back if:
You do not have the right to long-term residence where you bought the goods.
Do not work in this country.
Stay in the country where you made your purchase for less than 3 months.
Do not have refugee status in the country where you bought the item.
In which countries can I find tax free? The list is quite large. Among them: EU, Turkey, Japan, Thailand and Singapore. You can see the full list on the Global Blue website.
How to use the system?
For example, you find a store with the sign “tax-free for tourists”. There are especially many in Europe. Cooperating with tax-free networks, shops lure tourists. By the way, in some stores there is no sign, but there are free taxes. Therefore, before buying, check with sellers just in case.
Then, as usual, choose the right products and go to the cashier. There you inform the seller that you need to issue a check for tax free. You can get it only in case of purchases for a certain amount, which differs in different countries.
For example, in Switzerland or Morocco you need to spend at least 125 euros to get part of the tax back. But in Hungary, Denmark or Norway – from 40 euros. Moreover, each country and even region of this country has its own percentage of the return of a part of the cost of goods.
In Germany, a refund will not apply to purchased cars and telephones, and in Cyprus you will not be refunded for food purchases. Each country sets its own rules. Therefore, you should familiarize yourself with the list of conditions of the country that you are going to visit.
Most often, the tax-free system does not work when buying cigarettes and food. In some regions, it is available for medical supplies and books.
But back to the check. If tax free applies to your product, then ask the seller for a check. It can be written by hand or printed. It should contain information about the buyer: his name / surname, passport number, as well as the country in which he lives.
In addition, the date of purchase should be displayed and how much is paid for the goods. Separately prescribed amount that must be returned. From the store you must pick up both the tax free check itself and the main purchase check.
When you return home on a voucher, you must put the customs stamp of the country you are visiting last. To do this, the customs officer may ask you to show the passport and goods that you bought on the basis of freedom from tax. Such stamps are often placed on separate racks where it says Tax Refund or Tax Free.
When the customs stamp is affixed, contact the tax free return point, a special department of the airport or a Ukrainian bank.
If traveling by car, the benefit will also be that with a tax free check you will need to stand in a separate line at the border. Its length is often much less. So you not only save money, but also time.
Tax refunds will only be returned to you banks that work with tax free networks. There are not a lot of such people in Ukraine: Global Blue and the new TaxFree4U. If, being abroad, you bought a product through another network, then it will be more difficult to return the money. You will have to contact this company yourself.
Among the Ukrainian banks that return tax free, there are:
Pravex-Bank, which collaborates with Global Blue.
Privat-Bank, of which TaxFree4U is a partner.
I note that the tax free voucher has its own “expiration date”. Often it lasts 3-12 months. The amount is returned in national currency at the bank rate. The operation itself lasts a maximum of three days, but often the issue takes place in a few minutes.
As you can see, there are no difficulties in returning free taxes. But using the knowledge about this system, you can bring not only impressions and souvenirs from the trip, but also a nice bonus for your wallet.