Travel Tech: Shopping Abroad Tax-free

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When traveling abroad, shopping is an inevitable activity. If you do not consciously plan how you will spend your money, you might be missing on big savings like a tax refund of up to 20 percent depending on which country you are visiting.

For example, in Singapore, a minimum spend of SGD 100 in a participating store on the same day qualifies your purchases for a 7 percent tax refund at the airport. In Europe, a minimum spend of EUR 175 is eligible for a 20 percent tax refund.

Not all stores participate in the tax-refund program, so you should always ask if they offer tax-free shopping, and the minimum spend for eligibility before you start piling your cart with goodies.
If you are traveling with friends or family members, it will be to your advantage to combine your items and pay for them altogether so you can avail of the tax refund.

It is also very important to remember to process your purchases for a tax refund at the store, otherwise, you will lose your opportunity to claim it even if you bought more than the minimum amount.
Tax refund-processing sometimes vary from store to store. At some big department stores, they will tell you that you can shop and pay for your items and then process the tax refund at the customer service counter before you leave the store. Smaller stores will let you walk around collecting items and then pay for everything all at once, and they will process the tax refund at the point of sale.

The store will ask for your passport when they prepare the tax rebate, so remember to bring it along when you go shopping. The clerk will also ask if you want the rebate refunded to your credit card or if you want to get cash at the airport. This really depends on your personal choice, but I like getting cash at the airport because although the credit card option can be faster to process, it can take up to almost a month before you receive the rebate on your credit card, and there’s always the possibility of your claim being denied because of some technicality.

In Europe, you can only claim your tax refund once – when you exit the Schengen area. So if you visit several countries, process the tax refund before exiting the last country on your way home.

Pack all items for tax-refund in just one bag, so that if the customs inspector asks to see the items in, you only need to open one bag. If you plan to check the bag containing your tax-free items in, make sure to go to the airport early and process your tax refund before you drop-off your bags. Remember that if the customs officer elects to inspect the items you are claiming for the refund, he may deny your claim if you cannot present the items or if the items are not sealed in their original packaging.

Having said that, in most cases, processing tax refunds at the airport these days is as easy as 1-2-3 with electronic kiosks at most airports:

1. Locate the Tax Refund kiosks – these are usually well indicated or you can always ask any passing airport personnel or the information booth.

2. Once you find the nearest kiosk, just follow the instructions on the screen, starting with selecting the form language. You will need to enter your passport details and either scan the barcode on the receipts or enter the receipt code into the system, and wait for it to give you the receipt validation and claim confirmation.

3. The last step is to present your claim to the currency exchange teller, which is usually within the vicinity and get your refund in your preferred currency.

Also published in February Issue 2017

Words by Presy Alba