A nice advantage of shopping overseas is getting the tax you paid reimbursed back when returning home. This can make the cost of buying certain goods (think luxury items) more cost effective. However, to get that cash back into your hands can be a bit confusing and cumbersome. I have gone through this process just last week, and I have several pointers to share with you.
First, I just want to briefly walk you through the steps of the entire process so you are aware of them. When shopping in a foreign department store or luxury shop, if you spend over a certain amount of money (something like $150 USD) you are eligible to get the tax back on the purchase.
The store that you buy the goods from will need to give you a tax refund form and will need to attach an original invoice/receipt to it. On the day of your return flight home, you need to get the form stamped at the customs office in the airport. Finally, you take that stamped form to a money kiosk to get cash back or mail it in to get a credit back on your credit card.
To help you have a smooth experience, here are my top three tips to consider:
1. Carry ID documents when shopping: If you are in the market to buy something expensive, remember to always pack your passport or take a photocopy of it with you on your day of shopping. Most stores will not give you a tax refund form without having the proper documentation to enable them to fill out the forms. The cost savings can be fairly substantial (sometimes 20 percent or more) so this is not something you want to miss out on. On occasion, I have had some stores give me the forms when I had forgotten my passport in the hotel, but this is not typical.
2. Carry the goods with you: The day you fly home, make sure that you do not pack the goods you are getting tax reimbursement for into your checked luggage. The customs agents may ask to see the goods in order to inspect them before they will give you a stamp on your forms.
3. Plan connecting flights carefully: The tax reimbursement process (the visit to customs and getting your stamps and money) can only be done on the flight you take that will lead you back to your home country. For instance, I had purchased some goods in Hungary, then flew to Greece for a few days to visit friends, and finally ended up connecting through Paris to get back home to New York. I had to do my tax reimbursement process in the Paris airport (not Hungary or Greece). Thankfully, I had a 5-hour connection that gave me plenty of time to figure out where I needed to go to handle this. In fact, I had to go to another terminal in the airport to find the customs office. Make sure you factor these logistics in when scheduling your return flights. I would budget at least two to three extra hours to deal with this paperwork. Lines can be long and you may get lost or need time to find all these different offices.
As always, I wish you all the happiest of travels!
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