How to Claim Tax Refunds on Shopping in Europe, Japan, Korea, Taiwan, Hong Kong, Malaysia
If there is an outlet mall at just about any popular tourist destination overseas, chances are you will find Singaporean tourists there.
Shopping overseas is one of Singaporeans’ favourite hobbies. It’s not that we don’t have enough malls back home, but rather that many brands and products that we love tend to be cheaper elsewhere.
And if you claim a tax refund before you leave for Singapore, you get to save even more money. Here’s how to do so at some of your favourite travel destinations.
What is VAT?
VAT, or Value Added Tax as it is called in many countries, is a consumption tax that is levied on goods and services. Our own GST functions very similarly—although there are some technical differences between VAT and GST, to the consumer they are pretty much the same thing. At airport duty-free shops, there is no VAT or GST levied on goods.
In many countries, you can get a refund on the VAT on certain goods when you leave, usually at the airport. If you are making big purchases (like a Chanel handbag or a new camera), the VAT can be considerable.
What is Global Blue?
Global Blue is a company that helps tourists get tax refunds on their shopping in certain countries
They provide you with the necessary paperwork that needs to be filled up in order to get a VAT refund, thus saving you from having to navigate the VAT refund channels in each new destination you visit. In return, they’ll take a cut of your refund.
If you wish to use Global Blue, the process goes something like this:
- When you’re at the checkout counter, ask the staff for a Global Blue Tax Free Form.
- When you arrive at the airport just before you make your trip back home, hand the tax free form together with your receipts to the customs or VAT refund desk. Make sure they stamp your form. They might ask to inspect your goods, so make sure you haven’t checked them in with the rest of your luggage.
- Hand your stamped and filled out Tax Free Form to the designated Global Blue desk or office at the airport. The refund will be given to you in cash or through your credit card. If you’re in a rush, you can also mail Global Blue your completed form instead.
Global Blue is available in the following countries.
So, should you use Global Blue? Well, that depends on how much time and patience you have to navigate a foreign country’s VAT refund process. Our own GST refund process at Changi Airport is super easy, but the same cannot be said about other airports.
If you don’t wish to use Global Blue, read on to find out how to claim your VAT refunds.
How to claim for tax refund in Europe
Singaporeans flock to France and Italy to splurge on luxury brands and hit up outlet malls. Visitors to the European Union are entitled to refunds on VAT which ranges from 8% to 27% depending on the country.
The VAT in France is 20%, which means you could be saving $1,000 on that $5,000 Chanel bag. In Italy, it’s 22%, which likewise translates to lots of savings on that Prada handbag.
That doesn’t mean that all items are eligible for VAT refunds. That will depend on the shop, so look out for signs indicating that VAT can be refunded. When in doubt, ask.
When you are paying for your item, request a tax-free form at the counter and ask for assistance in filling it out. This form is to be stamped and submitted at the airport.
In rare circumstances (usually only at big department stores), you might be able to get a refund on the spot. Otherwise, you hold on to the VAT form together with your receipts until you reach the airport at the end of your trip. Ask for the customs desk for VAT refunds, get in line and submit your form, making sure they remember to stamp it. You’ll have to submit your receipts together with the form, and have your purchases ready as they might be inspected.
You can only get your VAT refund processed at your final destination before you exit the EU. That means that if you’re doing a multi-country trip through Spain, France, Germany and Italy, in that order, you will submit your VAT refund application in Italy.
How to claim for Japan tax refund
In Japan, the 8% consumption tax levied on goods can be waived for foreigners who’ve been in Japan for under 6 months. The good news is that the Japan tax refund process is relatively hassle-free in Japan.
You can get a tax refund if you’re spending up to 5,000 yen excluding tax. Do note, however, that they calculate the cost of “general items” (eg. shoes, bags) separately from those of “consumables” (eg. perfume, snacks). So you’ll have to spend 5,000 yen worth in each category in one receipt in order to get a tax refund for that category.
All you have to do is to ask for a tax refund when you’re paying for your items at the checkout counter. Make sure you have your passport with you, as you’ll need to prove that you’re a foreign tourist (and no, your lack of Japanese skills doesn’t count).
The tax refund will be given to you on the spot. That’s it.
How to claim for Taiwan’s tourist tax refund
Taiwan isn’t as generous as Japan or the EU when it comes to tax refunds. You can get a partial tax refund on certain big-ticket purchases, as well as some beauty products, so long as you’ve been in Taiwan for no more than 183 days.
You can only claim tax refunds on products bought in a shop that’s labelled as a Tax Refund Shopping establishment, so look out for the sticker or just ask the staff before buying. You must have spent at least NT$2,000 from eligible stores.
When you get to the airport before leaving Taiwan, head to the Tax Refund Service Counter, where you’ll be assisted with the necessary paperwork. Make sure you have your passport and receipts with you, as well as your purchases in case the customs officers wish to inspect them.
When your request has been approved, you will be issued with a receipt, which you can then exchange for your refund at the banks or cash counters indicated.
How to claim for tax refunds in South Korea
You can get a tax refund when shopping at stores displaying “Tax Free” signs. At some of these shops, the tax will be deducted from your bill right away upon presentation of your passport, so long as you have spent at over 30,000 won but under 300,000 won, including taxes.
However, if you have not received a tax refund at the counter for whatever reason, you can still claim your VAT at the airport. This is to be done before you check in your luggage.
At Incheon Airport, there is a kiosk machine where you can automatically get refunds of under 75,000 won. If your refund is worth more than that, you’ll have to queue up at the counter, do the necessary paperwork and get a stamp from the customs officer. Bring along your receipts and your purchases for inspection.
When you’re done, there is a refund counter located by Gate 27 in Terminal 1. Show them the receipt issued at the customs counter together with your passport to collect your refund.
How to claim for tax refunds in Thailand
You can get a refund of the 7% VAT on luxury goods that you’ve bought at shops that have joined the VAT Refund for Tourists scheme, so long as you leave Thailand within 60 days.
The total cost of your receipts must be at least 5,000 baht including taxes, and each purchase must amount to at least 2,000 baht.
When you’re paying for your purchases, ask the staff for a VAT refund application form and present your passport. They should attach your invoice to the form. When you leave Thailand, submit the form to customs officers at the airport’s VAT Refund Office.
How to claim for tax refunds in Hong Kong
Hong Kong does not have VAT. Yay!
How to claim for tax refunds in Malaysia
You can get a refund on GST paid when shopping at Approved Outlets in Malaysia so long as you leave the country within 3 months of your purchase. You need to spend at least 300 ringgit at each Approved Outlet in order to get a refund. You can accumulate purchases at the same shop on different days.
Do note that GST refunds can only be made at certain airports, including Penang International Airport and KLIA 1 and 2. So you won’t be able to get a VAT refund if you’re just driving across the causeway.
To claim your refund, present your passport when you’re paying for your purchases and ask for a tax refund form. Make sure they attach an original tax invoice to the form.
When you get to the airport, head to the GST Refund Verification Centre with your passport, boarding pass, GST refund form, tax invoice and purchases for inspection. Get the form endorsed, and then head to the Approved Refund Agent’s Counter to collect your refund.
Have you ever successfully gotten a VAT refund before? Share your experiences and tips in the comments!