Travel can become really expensive. From flight bookings, hotel bookings to food and beverage, cable gifts, the combined costs are quite fast. Don’t forget the cost of currency conversion if you are traveling internationally as well as the sales tax you will have to pay for any item you buy while abroad. Ugh.
The good news is that there is something you may not do when traveling outside the United States and that is by being refunded the sales tax charged on any purchases you may have made while traveling abroad.
What is a sales tax refund?
Basically, a sales tax refund is a refund for the sales tax you paid for an item (namely, goods, not services). One way that foreigners attract tourists is to refund sales tax (also known as VAT) on goods purchased there. Due to sales tax refunds (which can be up to 25% in some countries), you can save a significant amount when buying some items overseas compared to in states. Typically, these savings are higher for internationally produced goods.
Here are some things to keep in mind to make sure you can get a sales tax refund when traveling abroad:
Find out if the country you’re from offers a sales tax refund
Most countries in the European Union offer sales tax refunds as well as some in Asia. You can confirm with the customs agent upon arrival at your destination.
Remember to get the necessary documents for all your purchases
To be eligible for sales tax refunds, you may need to have specific documents from the sellers where you made the purchase. Sometimes a purchase receipt is enough, however, in many cases, you may need to obtain additional documents – usually VAT forms – to submit to customs upon your departure.
You also want to keep all your receipts until you receive a refund. Don’t assume that any additional paperwork you get is a substitute for your receipt.
Request your refund before you depart
Be sure to request a refund before you board your flight home. Also, take enough time before your flight departs for customs to make a refund request. While you can still request a refund after departure, you’ll have to pay an international mailing fee to submit your paperwork.
Don’t sign up for purchased items before receiving a refund
Customs can ask to see what you purchased before approving the refund, so you may want to get a refund back before checking your baggage. Otherwise, keep items in your luggage.
If you don’t want to get a sales tax refund, consider shopping at the airport tax-free shopping mall after customs clearance, as sales tax on items you buy isn’t included.