February 27th, 2014

Duty free system and Tax free

Getting the goods at home, we will automatically pay VAT (VAT) – VAT. For Russians, the rate is 18% today, for many Europeans and Scandinavians exceed 20% (in Belgium and Luxembourg, 21% in Sweden – 25%), and some types of goods fee is 40%. Meanwhile, legislation in some countries requires payment of VAT only its residents. Travel stimulates export trade, so why not encourage it? The easiest solution was to create networks of well-known stores duty free (tax").

They are in almost every international airport, cruise ships, ferries, aircraft and special TourCenter, ie wherever customers (including local residents, have already passed passport control and customs) and are guaranteed to leave the country as soon as possible. Duty free shops are free from all formalities related to making a purchase. Man pays the price, which does not include VAT, – and all. Only in certain cases, such as when visiting the mall duty free, located in the city, itself should have a passport and a ticket: the right to buy is usually limited to one day from the moment of crossing the border. With these centers are familiar guests Egyptian resorts.

Duty free system is extremely convenient, but it offers a very narrow range: watches, perfume, liquor, etc. It was therefore necessary to find options to expand access of tourists to the goods at bargain prices and clearly identify who and under what conditions is entitled to use the service. As a result, most countries have established very similar rules. First, the system of VAT exemption (or tax free) are available only to non-residents and only in the framework of the visit to 90 days. Some states have reduced the term of export items to one month from the date of purchase (Switzerland) or up to two (Italy). Thus, even those who are not citizens of the country, but have a residence permit, work permit or student visa tax free can not count.

Ethnicity plays no role: Poles, became an American citizen, while shopping in Europe can claim a tax refund. In the EU as a general rule: whatever resident EU countries you may be, the right to tax free you do not on the whole of the EU. Second, the tax free does not extend to all goods and services. The list in each state their own, but almost everywhere it excludes tobacco and alcohol products. Third, the bill for purchases made at the same time (ie in one shop and at the same time) must exceed a certain minimum. Somewhere, this amount is small (in Germany – 30 euros), somewhere – is solid enough (in Switzerland – 340 euros).