One of the best-known terms among people who love to shop overseas is “tax free”. What is tax free shopping abroad, how does it work and is it really worth the effort?
What is tax free shopping abroad?
In many countries a tax is charged on a wide range of products, and tourists are not liable for it. Shops cannot take the tax off the price when you buy, but you can ask for “tax free”. Chains usually offer it above a certain purchase amount, and if you have passed that threshold you are eligible.
In some countries you will need to show your passport in the shop and fill in a short form. The form states the amount you can receive when you finish your visit to that country. That amount is in effect the tax which you, as a tourist, do not owe.
It sounds very simple. It is not always. Plenty of travellers say the whole thing is easy and worthwhile: ask for tax free with every purchase, sign, and collect the money at the airport.
The small print
Deposits and deadlines
At some destinations you will be asked for a credit card as a deposit when the refund is made. The reason: if you fail to drop your receipts into the designated box at the airport, or miss the opening hours, or do not fill in every form correctly to the end, or trip over some other condition, the amount you received will be charged back.
Time at the airport
The process also takes significant extra time at the airport. There are usually queues at the tax free counter. Many people want their tax back, did not fill in the forms properly or did not understand everything required of them, and the result is long lines.
A frustrating personal example
I once ran into a maddening situation at a European destination that is supposed to be one of the easy ones. I was asked to show the clerk the goods I had bought and was claiming for. I did not have them with me. They were in the suitcase I had already checked in. So I stood in line and burned time, I had asked for tax free in every shop and wasted more time there, and in the end I got nothing.
So is it worth it?
To be fair, I have received tax refunds several times and it was great. At some destinations the procedure is very easy: you turn up, show receipts and passport and get your money. At others it is not worth it at all. It is very hard to get the refund, or it is charged back because of one small thing you forgot to do at the airport.
If you do want to claim, check carefully at each destination exactly what the process is and do not miss a single step. Personally, I usually prefer to give up the refund than to spend the time on the chance that it might work out in the end.
Global Blue’s tax free shopping site explains the rules country by country. Planning a shopping trip? See our guides to shopping in London and shopping in Vienna.
