Tax free - what is it? How do I place and receive it?

Today, Russians and citizens of other countries are increasingly traveling abroad to make some purchases there. At the same time, they leave the value-added tax not in the bins of their homeland. But a long time ago it is known that in the modern world every traveler has the opportunity to carry out a profitable operation, called the return of Tax free (a specific part of the VAT). For the first time, Tax free appeared in the 1960s in Sweden. Since then, citizens of many countries are actively using such an attractive opportunity to save money.

The essence of tax free

Tax free - what is it? As noted above, this concept implies a VAT refund. Everyone knows that the tax presented is aimed at the social provision of society. Thus, it is included in the final cost of absolutely any product or service. Typically, the value of VAT varies from 9 to 20 percent, which is completely dependent on the individual settings of a particular state.

Why return Tax free? The answer to the question is much simpler than one can imagine. The fact is that tourists who have made some purchases, while paying the tax included in the price, do not have time to apply its social mechanisms, since they stay in the country for a very short period of time.

Brief description of the process itself

When making a purchase in the territory of another state, the tourist has the right to receive a special check. When leaving the country (at the customs), this document must be stamped, specifically defined for the transaction in question, which will become an absolute confirmation that the goods are exported (Free tax filing). Only after carrying out the above operation, a citizen is entitled to recover VAT. Money can be obtained both after passing customs and on arrival.

It should be noted that such a profitable system extends to approximately 20 countries around the world. In addition, the procedure for the return of VAT in all countries is similar. Only the restrictions on the minimum cost of objects purchased in the territory of another state differ, as well as the validity of the check document.

Tax free - what is it? Current Tax free systems

It is important to note that the commissioning of absolutely all operations for the return of VAT is entrusted to the tax free system, endowed with a private character. They serve as an intermediary between tourists and a particular state. Each such system has in its structure several shops, united in one network, as well as a number of offices designed to return money to citizens. It should be noted that any such system retains a minimum commission, as a reward for the implementation of such an important operation. There are several systems in the world, the largest of which is the following.

Global tax free unites 36 countries (29 of them are in Europe), including Germany, Finland, France, Hungary, Iceland, Norway, Lithuania, Latvia, the Netherlands and others. It should be noted that only seven countries that correspond to the presented system are located in other parts of the world (Japan, Argentina, South Korea, and so on). Global blue tax free was founded in 1980 in Sweden. Its owner is the company Global Refund Group.

Other systems

The totality of the systems under consideration includes 3 more units in its structure, among which:

• Premier Tax Free, which includes 20 countries (15 of them are located in Europe), including Germany, Czech Republic, France, Great Britain, Switzerland, Sweden, Morocco, Singapore and others. The system was founded by the developers of The Fintrax Group in 1985 in Ireland.
• Tax Free Worldwide has only 8 countries: Denmark, Iceland, Ireland, Great Britain, Norway, Austria and others. It is important to note that more recently this system has merged with the one considered above, Premier Tax Free.
• Innova Tax Free consists of six countries: Portugal, China, Italy, Great Britain, France, Spain.

VAT return policy

The opportunity in question is valid for both foreign nationals and stateless persons, residence permits, work visas or refugee status in the country of purchase (they must stay on its territory for not more than three months).

A prerequisite for the return of Tax free is the conformity of the goods to a specific list, including industrial products: footwear, clothing, jewelry, household goods, electronics, household appliances, accessories, office, watches, and so on. It is important to note that the system does not cover the scope of services. In addition, exceptions are transport mechanisms, food, books, precious metals (in bars of the bank), precious stones that are separate from jewelry, goods for professional activities, as well as objects purchased through the Internet.

Registration of the receipt document

The check document issued by an employee of a foreign store indicates the total value of the goods, as well as the amount of the value-added tax intended for return. The data are filled in by the seller by hand or by means of a cash register. At the same time, it is not the duty of employees to fill in additional information about the client, but they are usually willing to do so. It should be noted that it is mandatory to specify the details of the bank card in the documentation if the client prefers to receive money exactly through this instrument. After completing the check by a foreign trade employee, you only need to verify the correctness of the data and sign. If possible, it is advisable to take a brochure in the store with information about the VAT refund system (for a certain system, for example, Tax Free blue)

It must be remembered that in any case there is a specific time period during which one or the other product must leave the country where it was purchased. The check document Tax free with a stamp of customs also has a shelf life.

Additional nuances

Return Tax free (what it is, see above) does not mean at all that the citizen will receive the amount of the specified value added tax in full, because a certain part of the money goes to the commission expenses to the intermediary and administrative matters. With respect to this provision, each country has organized an individual system of rules, which should be guided.

If the goods are purchased in one of the countries of the European Union, then it is not necessary to put a seal on the check document when leaving the country, but only when crossing the EU border. So, some troubles may arise if the citizen leaves the European Union through a transit stop. It should be recalled that EU countries include countries such as Poland, Romania, the Netherlands, Cyprus, Czech Republic, Austria, Bulgaria, Malta, Hungary, Croatia, Sweden and others.

Methods of refunding VAT

You can cash out checks by one of the following scenarios:

• Within the airport, which is the fastest way to receive cash.
• By postal organization. So, you need to keep a receipt document in the office of a certain system (Tax free in Moscow can be obtained from one of several operating systems). After a while, the money will go to the bank account or to the customer's card. It is worth noting that the presented operation is quite long, because the period of its implementation often reaches four months.
• Through any point of issue, as a rule, in the client's city of residence (however, this provision applies only to large-scale settlements). It is important to note that today it is possible to organize the operation in question even without leaving home, by means of Free online tax filing.

Interesting to know! Subtleties of VAT refund in different countries

It will be worthwhile to note several useful facts related to the registration of Tax free (what it is, we told at the beginning of the article) in different countries.

• On check documents filled in the territory of Poland, the money is returned exclusively in cash.
• When leaving Slovenia, two stamps are needed: on the check and on the Tax free form.
• To get a part of the value-added tax when buying woolen goods in Iceland, printing on a check is not required.
• In Holland, every tourist has the opportunity to return VAT even if purchased in a store that is not part of the Tax free shopping system. But an obligatory condition for this is a return to the country.
• In Norway, the stamping is done not at the customs office, but directly at the office of the system. In addition, it is the only country where a portion of the value-added tax is refunded for food that is more expensive than 285 kroons.
• At the airports of Germany, their requirements: you must first register, then just go to the customs. At registration it is necessary to warn the employee that the registration of Tax free is planned. Thus, the luggage will be registered, and then returned to its owner.
• In countries such as Norway, Croatia, Finland, Sweden and Denmark, individual national stamps are provided. Therefore, checks of these countries can not be used elsewhere. So, the tourist can get a part of the value-added tax only at the airport.

An important point in the event that a citizen suddenly forgot to put a stamp on a check document is the opportunity to do this on arrival at the embassy (consulate) of the country where the goods were purchased.