How Does Tax Free Shopping Work?

When tourists visit some of the world’s largest cities, they love buying typical, local products. Sometimes rules and regulations allow you to do Tax Free shopping. This means you do not have to pay for certain fees and taxes and you can get products at a cheaper price.

If you want to benefit from this type of discount, you need to check if you meet requirements, and, if you do, you should always follow procedures and make sure you have the correct documents to present at the airport.

Today, this article by ShBarcelona will tell you a bit more about Tax Free shopping.

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What is Tax Free shopping and how does it work?

The benefits of Tax Free shopping can differ, depending on the country you are visiting. One of the first requirements, when you want to buy tax-free products, is that you have to have a different nationality than the one from the country you are visiting. You are also not allowed to having stayed there for a long period of time.

Most countries that offer Tax-Free shopping have a minimum amount you must spend in order to be eligible for the discount.

It must be spent in the country’s currency, and most of the time it must be spent in the same store and only on specific products. Shops that offer Tax-Free shopping can be easily recognised, as most of them have a clearly visible sign saying “Tax Free”.

Always remember that tax free shopping is only possible on specific products, and this excludes shopping at supermarkets, restaurants or hotels.

Depending on your destination, there are two different options for Tax-Free shopping. In some countries it is very simple, because all you have to do is present your passport and the return ticket for your flight at the time of purchase to be eligible for the discount.

In other countries, however, you are required to take a few extra and important steps. Firstly, when you are ready to pay at the cash register, you must ask the store’s employee for a Tax Free form.

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Once you have filled out the form clearly and precisely, you must then go to Airport Customs to present the requested documents (like your passport or visa) and the tax free form with the receipts of items you are requesting a tax refund for.

Airport Customs will stamp the form upon approval, and with this stamped form you can go to the refund office to get your tax refund. An important thing to be aware of, is that both of these offices can charge you with a handling fee. So be prepared to pay a commission.

Make sure that you safeguard all the products on the tax-free form, and that you keep all your receipts because you might need proof of purchase if you want to claim back money in the future, for example when your luggage gets lost and you have to present the airline or your travel insurance with a list of items lost.

If you are living in Spain and you are returning from a non-EU country, then you will have to declare purchases of over 430 euros at customs. You should also go to customs if you have brought over the maximum quantity of tobacco or alcohol with you.

Interesting facts are the different regulations on Tax Free shopping in the United States, as here it may vary depending the city or state, as each has a different tax policy. New York doesn’t have Tax Free shopping, although if you go there, you can apply for discount cards to exchange in shopping malls and stores.

Other places, like Montana, Alaska, Oregon and New Hampshire, will not charge you as a tourist with any tax on items purchased, as long as you show your passport.

There are certain stores in Texas and Louisiana that allow you to do tax free shopping, but then you must meet requirements and visit several offices at the airport with your forms, products, receipts and personal travel documents and ID.

Do you have other interesting information on Tax Free shopping?