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What is Tax Free Shopping? The Complete Guide for Tourists

If you’re an international traveler, you’ve probably heard the term “tax free shopping” mentioned as a great way to save money when buying goods abroad. But if you haven’t – no worries, just keep reading to see how you can save up to 20% shopping abroad just by being an international tourist.

This guide explains everything you need to know about tax free shopping, including how it works, where it's offered globally, eligibility rules, how to claim refunds, and more. Read on to unlock the full potential of this travel perk and keep more cash in your pocket!

What Is Tax Free Shopping?

Tax free shopping allows eligible tourists traveling internationally to get a refund on the sales taxes and value-added taxes (VAT) they pay when purchasing goods abroad.

When you shop tax free, you will pay these taxes at the time of purchase. However, you can then claim a refund on those taxes when you leave the country as an exporting tourist. (You are considered an exporting tourist when you purchase goods and take them with you home, therefore becoming eligible for a refund of the VAT that you paid during the purchase.)

This VAT tax refund means you ultimately pay less for your vacation souvenirs and other purchases made while traveling in foreign countries. Depending on the destination’s tax rate, a VAT refund can translate to 10-25% savings off the initial price.

For example, in Europe the standard VAT averages around 20% in most countries. So tax free shopping returns about a fifth of what you first paid. That adds up to major savings, especially on big-ticket items!

Key Tax Free Shopping Terms

To grasp the world of tax free shopping and VAT refunds, it's essential to familiarize yourself with some key terms and concepts:

VAT or Value-Added Tax - This consumption tax is added onto the purchase price of goods and services in many countries globally. The VAT is what gets refunded. While VAT is the most common term, it's worth noting that in some countries, this tax may go by other names, such as IVA, GST, or Consumption Tax.

Eligible purchase - To qualify for tax free benefits, purchases usually need to cross a minimum spend threshold and meet other conditions like being for personal use. Eligible purchases can encompass a wide range of goods and services. For instance, buying a designer handbag, electronics, or even high-end jewelry could all qualify as eligible purchases, provided they meet the specific criteria and are intended for personal use.

Eligible Tourist – An eligible shopper is often referred to as an "eligible tourist." This is someone who qualifies for VAT refunds as a visitor to a foreign country.

Exporting goods - To claim your VAT refund, purchased items must be exported out of the country rather than used domestically. This simply means that you need to take them (unused) with you, back home.

Proof of export - Documents like stamped customs forms, receipts, and passport stamps verify export to claim refunds - please note - claims made in Norway require a photo of the items once exported and fall under a digital flow as per their regulations.

Claiming a refund - Submitting documentation to have your VAT refund approved and paid out by a tax refund company.

Now that you understand the premise, let’s dive into the details of how tax free shopping works.

How Does Tax Free Shopping Work?

While the specific policies can vary somewhat by country, the process for tax free shopping generally follows these main steps:

Make Purchases Abroad First, you’ll need to make eligible purchases abroad to claim VAT refunds later. Retailers accepting tax free shopping are generally marked in-store and can confirm purchase eligibility. There is often a minimum purchase amount required to qualify for tax free.

Present Passport & Receive Documentation When checking out, present your passport to verify tourist status. The retailer will provide applicable forms, receipts, tax free sticker, and instructions needed to ultimately claim your refund.

Leave the Country with Purchases & Documentation You must take your purchases and the associated documentation with you when departing the country to qualify for VAT refunds.

Get Proof of Export Before exiting, you must show customs authorities your passport, purchases, and documentation to verify export. They will stamp your forms to validate the goods left the country - please note - claims made in Norway require a photo of the items once exported and fall under a digital flow as per their regulations.

Submit Refund Claim Next, submit the stamped documents to the tax refund company digitally or in-person to initiate processing of your claim. After validating, they will issue your VAT refund amount.

Receive Your VAT Refund! Finally, the refund company will deposit your VAT refund to your chosen bank account, credit card, PayPal, or via other transfer methods. Under the traditional paper system, it can take up to 2 months to receive funds. Digital platforms now enable near instant refunds in some cases!

Where Can You Shop Tax Free?

Tax free shopping for tourists is offered globally in over 60 countries across Europe, Asia, the Americas, Oceania, and the Middle East.

Here’s an overview of all tax free destinations in 2023: France, Italy, Spain, Germany, Switzerland, Ireland, Sweden, Norway, Denmark, Finland, Portugal, Greece, Belgium, Netherlands, Luxembourg, Austria, Czech Republic, Hungary, Poland, Russia, Turkey, Croatia, Slovenia, Romania, Bulgaria, Greece, Cyprus, Malta, Andorra, Iceland, Singapore, Thailand, Indonesia, Japan, United Arab Emirates (UAE), Malaysia, South Korea, China, India, Hong Kong, Taiwan, Macau, Canada, United States (limited to some states), Brazil, Argentina, Mexico, Chile, Uruguay, Colombia, Peru, Australia, New Zealand, South Africa, Morocco, Egypt, Tunisia, Israel, Jordan, Saudi Arabia, Qatar, Bahrain, Kuwait, Oman.

In the European Union, tax free shopping is standardized for all non-EU residents. Other regions have more variation in country-specific rules. Always check the latest requirements for where you are traveling.

Tax Free Shopping Eligibility

To shop tax free as a tourist and claim VAT refunds, you must meet certain eligibility criteria:

Non-resident status - Tax free shopping and VAT refunds typically apply to non-residents, which means foreign visitors. Citizens and residents usually don't qualify. However, there may be additional considerations based on your length of stay in the visited country. In some cases, expatriates can also qualify.

Travel visa - Some countries may require you to hold a tourist visa to access tax free benefits. It's important to check the visa requirements of the country you plan to visit.

Exporting goods - All items you purchase must be exported when you depart the country. This means you should take your purchases with you, unused.

Minimum purchase - Many countries impose a minimum spending threshold per store, typically ranging from $30 to $125. Your purchases must meet or exceed this amount to be eligible for tax free benefits.

Personal use - Eligible goods should be intended for personal use, rather than for business or commercial purposes.

Receipts and documentation - To claim your VAT refund, you'll need to retain purchase receipts and complete any necessary forms. These documents are crucial for processing your refund.

Time limitations - Be aware that there is usually a time limit for claiming VAT refunds after leaving the country. Make sure to adhere to this timeframe to ensure you receive your refund.

Remember that specific tax free shopping requirements can vary from one country to another, and eligibility criteria may also differ based on your nationality, visa status, and duration of stay in the visited country. It's advisable to research the rules and regulations of the particular destination you plan to explore.

What Purchases Qualify for Tax Refunds?

One common question is what goods tourists can actually buy tax free. Here are some of the purchase conditions and restrictions:

Tangible goods - Services like hotel stays generally don’t qualify, only physical products.

Non-consumables - Food, drinks, perfumes, etc. are usually excluded.

Non-restricted items - Some goods like alcohol or tobacco may have restrictions.

Store eligibility varies - Department stores, duty free shops, boutiques etc. may have different tax free policies.

Luxury focus - Big ticket luxury items tend to be popular tax free purchases.

Check which categories qualify for tax free treatment in your destination and shop accordingly to maximize potential VAT refunds!

How Much Can You Save with Tax Free Shopping?

The great thing about tax free shopping is that the more you spend, the more you can save! VAT refunds are calculated based on the pre-tax price minus any discounts.

Your exact VAT refund amount will depend on:

VAT/GST rates - Typically range from 10-25% globally. The standard EU rate is around 20%.

Purchase amounts - Higher spending means bigger refunds. Minimums also impact this.

Refund fees - It's worth noting that refund fees can slightly diminish the final payout. These fees encompass a variety of charges, including credit card fees, cash charges, "per-form" charges, fees levied by the tax free shopping company, foreign exchange (FX) fees, and more.

How to Claim Your Tax Refund

There are a few different processes tourists can use to claim their VAT refunds:

Paper Forms The traditional method involves filling out paper forms, getting them validated by customs at the airport, submitting forms by mail, and waiting 4-8 weeks for the refund.

Digital Platforms Newer digital VAT reclaim platforms allow tourists to complete most of the refund process electronically via a smartphone app. This cuts wait times down to 24-48 hours in many cases.

Tax Refund Companies

Various private companies like Pie VAT, Global Blue, and Planet Payment handle all the logistics of processing tourist tax refund claims and payments, for a service fee.

For example:

Maximize Your Tax Free Shopping Refunds

Follow these tips to make the most of tax free shopping:

Always ask for a tax free option when shopping abroad.

Plan purchases to meet any minimum spend thresholds efficiently.

Compare tax refund companies on fees, digital capabilities, destinations, and support.

Organize all receipts, forms, stamps, and paperwork meticulously as you shop.

Submit claims immediately after leaving the country while details are fresh.

Use a digital platform like Pie VAT to get higher refunds in 24 hours.

Leave some extra time for requirements at the airport.

Tax Free Shopping with Pie

Pie offers a digital-first solution to simplify tax free shopping for tourists. Our easy-to-use mobile app allows you to submit VAT refund claims instantly with rapid processing and funds transferred to your chosen payment method within 24 hours in most cases.

Get your claim via email or text, upload any customs documents required, and receive your refund quickly and reliably. No more waiting months to access your savings!

Pie also unlocks exclusive Pie-only discounts and deals not offered to other tourists. Our tax free app can be used across Europe, Asia, and new popular destinations globally.

Experience the digital future of tax free shopping with Pie. Download the Pie VAT app before your next trip to Denmark, Norway, Sweden, Germany, or Japan.

Get the Pie VAT App Today!

Ready to take control of your tax free shopping download the pie vat app and sign up in seconds to access rapid refunds, discounts, exclusive offers, and a smoother experience abroad..

• Visit Barcelona

Professionals

• Barcelona Convention Bureau

Barcelona Shopping City

If you live outside the European Union, you can claim your VAT refund in the city center. Now it is possible to process this refund in the very heart of the city;

Plaça Catalunya tourist information office Plaça de Catalunya, 17-S

Cheques de Travel Tax Free and Innova Tax Free Daily, from 8.30 am to 9 pm

Cheques de Global Blue and Planet From monday to saturday, from 10 am to 8 pm

For more information:

• VisitBarcelona Tickets
• Affiliate VisitBarcelona Tickets
• Barcelona Access
• Barcelona Card
• Turisme de Barcelona Professional
• Barcelona Premium
• Barcelona Weddings

Smart Shopping

Shop at the best brands and get your tax refund

Standard Tax Free

Tax Free Shopping in Three Simple Steps

1 Ask for it

Ask for your tax free at the store, at the time of purchase.

2 Validate it

-If you are leaving the EU from a Portuguese airport, port or land border, scan your passport and boarding card at the E-TaxFree electronic kiosk to get your tax free validation.

-If you are leaving the EU from any country other than Portugal you must go to the customs counters with the printed check and request the customs stamp on the same document (in this case it is important that you ask for your printed tax free forms at the store or print it before going to the airport).

Get your refund in cash, at a refund desk or skip all the lines and get your refund via  Traveller Wallet.

Advance Refund*

Ask for your Tax Free in every store, before paying for the items.

Head to a  City Advance Refund Point  you’ll get your refund immediately.  Don’t forget , you’ll always need to validate your forms.

You will need a Visa or Mastercard (not issued in the EU) with a minimum validity of 6 months as a months as a guarantee.

*Not available in all stores.

Payment solutions Get my refund

Credit Card

• Get my VAT Refund
• Refund onto my Credit Card/Alipay
• Refund Locations
• Shopper FAQ
• Tax Free Solution
• Refund Solutions
• Intelligent Data
• Merchant FAQ

empower your Tax Free Experience with epay

Are you a Shopper?

Getting your Tax Free is easy, just keep in mind that the process starts at the time of purchase.

When paying for your purchases, ask store staff for an epay Tax Free Form. We recommend scanning the QR code on each Tax Free form to have all it at your fingertips.

Are you a Merchant?

We adapt to your needs by offering tailor made technological solutions. Increase your profits, encourage higher average sales and get more out of shopping tourism thanks to the epay Tax Free service.

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• Euronet Merchant Services

@ 2023 epay Tax Free. A Euronet Company

Only with Tax Free

Shop in Mexico and save money in taxes!

Master Tips!

What do I need for my return?

Travel Documents

Take pictures of:

• Migration form
• Boarding pass or cuise card

Purchase Documents

Upload documents:

• Voucher (if pay by card)
• Front of payment card(s)

Ask for a generic invoice for tourist with the following information:

• Your nationality
• Passport number
• Generic RFC: XEXX010101000

Money Limits!

• Minimum purchase $1,200 MXN in any form of payment without a maximum limit when buying with a credit or debit card.
• Cash purchase refunds cannot exceed $3,000 MXN per person.

Steps to refund success

1. create your profile.

Signup, complete your profile and start getting discounts of 9% on all your trips.

2. Register a new trip!

Through our platform upload your documents such as: passport, boarding ir cruise pass and migration form

3. Let´s go shopping!

Make your purchases in all the stores and brands that are our partners!

4. Register purchases

Use our platform to submit a tax refund for all your purchases, by uploading receipts, vouchers and invoices.

5. Get your refund!

Wait to get your tax back, you will be able to track your refund from your account in the platform.

Start saving now!

Get an 9% discount!

You do not have to wait! Get reimbursed for the purchases you made during your visit to Mexico. Use our digital platform to receive support and follow up.

Real time activity

Track the status of your process in real time!

Progressive Web Application

Works from any device and anywhere in the world!

Simple & Fast

The simplest and fastest way to get your refund!

Millions of refunded purchases

Since 2006, many happy customers around the world trust our service

Do you have questions?

Are you not sure about some terms or how to carry out your tax refund process for purchases made in Mexico?

Here are the answers to some of the most common questions we hear from our appreciated customers

The refund time depends on how quickly we can approve your submission.

We are required to submit all documentation to the Mexican government for approval of the tax return process. This means that we need personal information such as passport, boarding or cruise pass, migration forms along with invoices, receipts and vouchers for all purchases.

Once we receive all your documentation we carry out a rigorous evaluation process. If we find something missing or out of place, We will let you know when validating your purchases.

Once the process has been approved and your tax refund is underway, you can wait a period of 40 business days.

If you have additional questions, do not hesitate to contact our support center at [email protected]

A series of documents are required to validate your purchases in Mexico.

Our system is designed to easily upload photos and files of the required documents.

The necessary documents are:

• Passport: upload the pages where your signature and photo appear, making sure the passport number and validation dates are legible. For returning users, you will be able to use a previously uploaded passport photo, as long as the document is still valid.
• Boarding or cruise pass: The boarding pass or the cruise card and itinerary are documents that can make our validation process fast and simple.
• Migration form: a small green piece of paper that the immigration authorities give you upon arrival, as long as you have arrived to Mexico by air. Please make sure the tourist box is checked.
• Cash purchases must be verified with a receipt and an invoice.
• Purchases with a credit or debit card must be verified with a receipt, an invoice and a voucher.

Invoices must be uploaded as XML digital files provided by each store.

Please make sure you upload good quality photos and include all pertinent information.

Our team will have to review each document to validate your refund. You will be notified if something is changed or corrected, this could affect the time it takes to approve your refund.

All documents are important.

By law, we are required to provide all three documents for each purchase depending on the payment method.

Here we explain the differences between them:

• Receipt: is a bill of sale that details each of the items purchased. This is usually printed by the store and reveals each item in the checkout. It contains the price of each item, the total amount of the purchase, the store that makes the sale and the date of purchase.
• Voucher: is a document that is only generated when the purchase method involves one or more credit or debit cards. This is printed by the payment terminal or point of sale when you swipe your card to complete the transaction.
• Your full name as it appears on your passport
• Your passport number
• Your country of origin or nationality
• The following RFC code: "XEXX010101000" (Known as "Generic RFC")

If you have any problems getting the invoice, feel free to contact us for assistance at [email protected].

There is no upper limit on how much you can claim back.

However, there is a minimum of $1,200.00 MXN for each purchase.

Additionally, the government will only reimburse the first $3,000.00 MXN spent in cash per person.

There is no upper limit for the amount spent by credit or debit cards.

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