A traveller’s 9-step guide to getting cashback on your overseas trips

Are you baffled by the numerous regulations surrounding tourist rebate schemes around the world? Have you been unsuccessful in getting a cashback rebate when buying something overseas – such as clothes, wines, duty free and souvenirs – or even been held up at customs for travel purchases that don’t meet the rules? Well, read on because this guide is for you!

Leading financial comparison site comparethemarket.com.au has done the research and uncovered the nine rules for Aussie travellers to follow if they want to successfully claim on tourist rebate schemes across the globe.

Foreign visitors can claim a rebate for GST and VAT (Value Added Tax) on particular items such as fashion, goods and technology. VAT is the equivalent to the goods and services tax applicable in some countries, that is assessed depending on their value. These purchases, however, must meet strict rules.

For instance, the Australian Tourist Rebate scheme enables Aussie travellers to claim GST and Wine Equalisation Tax for certain items purchased in their home country, totalling $300-900[1], and then taken overseas permanently. Claims can be made on purchases within 60 days of leaving Australia, you must have the original tax invoice, and must also be worn or carried as hand luggage on the aircraft or ship as you leave Australia[2].

Financial expert at comparethemarket.com.au, Rod Attrill says: “An estimated 11.1 million Aussies[3] returned from short stays overseas last year, and I suspect a significant proportion made the most of duty-free shopping. However, many tourists could be making additional savings by taking advantage of tourist rebates for goods bought both overseas and back in Australia. However, there are always rules and regulations that apply so it’s crucial for Aussie tourists to do their research into the specific tourist rebate schemes they want to claim under to ensure that they are getting the most bang for their buck.”

Comparethemarket.com.au shares the 9 rules that Aussie travellers need to be aware of before making claims on tourist rebate schemes.

1. Know the required minimum spend to be eligible for a tax rebate. In each country and region, there are specific minimum spend thresholds to enable you to successfully claim for a tax rebate. For example, in most countries in Europe, the minimum spend threshold is 175 euros ($284 AUD)[4], while in Australia it’s $300 AUD[5]. In the UK though, each store can also impose different spend thresholds for the VAT refund claim[6].
2. Know the required maximum spend to be eligible for a rebate. Overseas purchases that are brought back to Australia must not exceed $900 AUD (your ‘passenger concession’) if you want a rebate. However, you can combine the $900 purchase limit of all your adult travel companions to get your claim accepted[7]. For example, if you buy a laptop for $2200 AUD and are travelling with two others, your combined passenger concession is $2700 ($900 x 3) so you will still be eligible for a rebate.
3. Know the goods you can’t claim against in your country of travel. Every country has rules for which purchase categories tourists can and can’t claim against. In the UK, for instance, you can claim a 20 per cent VAT refund on most goods and services except for basic food items, books and children’s clothing[8]. In Australia, you can’t make claims on items such as alcohol, gift cards and vouchers[9].
4. Have your passport at the time of purchase. To be able to claim a tourist rebate, you will need to prove that you are a tourist. In countries such as Europe[10], UK[11] and Japan[12], you must have your passport with you at the point of purchase or provide your passport with any receipts and the items you have bought at the international airport.
5. Know where to claim in each country. Making claims at the right place and time is important because this differs from country to country. Foreign visitors to Japan can receive an 8 per cent tax exemption for purchases between 5,000 – 500,000 yen ($66 – 6000 AUD) when they are bought at a tax-free store. The tax exemption application must be filed on the day to be eligible for the rebate[13]. In many countries including Thailand[14], South Africa[15], Singapore[16] and Europe[17], you can only make a claim at a major or international airport.
6. Pay attention to the time of your purchase. In certain countries, you need to purchase an item within a particular time frame to be eligible for a rebate. In Australia, your item needs to be purchased within 60 days of departure[18]. In Europe, you must leave the EU with the goods you are claiming a rebate on within three months of purchase[19].
7. Know which stores offer rebates. Even if a country offers VAT refunds, you need to check with individual stores to find out of if they participate in the scheme.For example, in Thailand you can only make claims from stores displaying the ‘VAT Refund for Tourists’ sign[20]. Whereas in Europe[21] and the UK[22], you need to ask each store provider if they offer this service.
8. Find out if you need to take your purchase out of the country. Some countries base their rebate schemes on items that leave the country permanently, while purchases in other countries can’t be taken overseas if you want the rebate, period. In Australia, if you are buying a gift valued at over $1000 AUD, you can get your GST refunded which can be up to 10 per cent back[23], provided that the item does not come back into Australia[24].
9. You might be required to carry the goods in your hand luggage. Most countries require you to present the goods that you are claiming a rebate on or carry it with you. In Australia, the Tourist Rebate Scheme refund is only applicable for items that are being worn, or in your hand luggage[25].

 

[1] Australian Border Force – Tourist Refund Scheme, for travellers: https://www.abf.gov.au/entering-and-leaving-australia/tourist-refund-scheme/for-travellers

[2]Australian Border Force – Tourist Refund Scheme: https://www.abf.gov.au/entering-and-leaving-australia/tourist-refund-scheme

[3] Australian Bureau of Statistics, ‘Australia’s International Travel – 2018’: https://www.abs.gov.au/ausstats/abs@.nsf/featurearticlesbyCatalogue/961B6B53B87C130ACA2574030010BD05

[4] European Commission, ‘Guide to VAT refund for visitors to the EU’: https://ec.europa.eu/taxation_customs/individuals/travelling/travellers-leaving-eu/guide-vat-refund-visitors-eu_en

[5] Australian Border Force – Tourist Refund Scheme, for travellers: https://www.abf.gov.au/entering-and-leaving-australia/tourist-refund-scheme/for-travellers

[6] Visit London – Official Visitor Guide, ‘Tax Free Shopping’: https://www.visitlondon.com/traveller-information/essential-information/money/tax-free

[7] Australian Border Force – Tourist Refund Scheme, for travellers: https://www.abf.gov.au/entering-and-leaving-australia/tourist-refund-scheme/for-travellers

[8] Visit London – Official Visitor Guide, ‘Tax Free Shopping’: https://www.visitlondon.com/traveller-information/essential-information/money/tax-free

[9] Australian Border Force, Tourist Refund Scheme, for travellers: https://www.abf.gov.au/entering-and-leaving-australia/tourist-refund-scheme/for-travellers

[10] European Commission, ‘Guide to VAT refund for visitors to the EU’: https://ec.europa.eu/taxation_customs/individuals/travelling/travellers-leaving-eu/guide-vat-refund-visitors-eu_en

[11] Heathrow, ‘Your tax refund in cash when you fly home’: https://www.heathrow.com/file_source/Heathrow/Static/PDF/Airport_guide/vat-refund-leaflet_EN.pdf

[12] Japan Tax-Free Shop, ‘Japan’s Tax Exemption’: https://tax-freeshop.jnto.go.jp/eng/shopping-guide.php

[13] Japan Tax-Free Shop, ‘Japan’s Tax Exemption’: https://tax-freeshop.jnto.go.jp/eng/shopping-guide.php

[14] Bangkok.com.au, ‘VAT Refunds in Bangkok & Tourist Discount Cards’: http://www.bangkok.com/shopping-vat-refund.htm

[15] Siyabona Africa, ‘South Africa Tourism VAT Refunds’: https://www.gov.za/services/custom-duties/how-apply-vat-refund

[16] Visit Singapore, ‘GST Refund Singapore’: https://www.visitsingapore.com/travel-guide-tips/tourist-information/gst-tax-refund/

[17] European Commission, Guide to VAT refund for visitors to the EU’: ‘https://ec.europa.eu/taxation_customs/individuals/travelling/travellers-leaving-eu/guide-vat-refund-visitors-eu_en

[18] Australian Border Force, Tourist Refund Scheme, for travellers: https://www.abf.gov.au/entering-and-leaving-australia/tourist-refund-scheme/for-travellers

[19] European Commission, ‘Guide to VAT refund for visitors to the EU’: https://ec.europa.eu/taxation_customs/individuals/travelling/travellers-leaving-eu/guide-vat-refund-visitors-eu_en

[20] Bangkok.com.au, ‘VAT Refunds in Bangkok & Tourist Discount Cards’: http://www.bangkok.com/shopping-vat-refund.htm

[21] European Commission, ‘Guide to VAT refund for visitors to the EU’: https://ec.europa.eu/taxation_customs/individuals/travelling/travellers-leaving-eu/guide-vat-refund-visitors-eu_en

[22]Gov.UK, ‘Tax on shopping and services’: https://www.gov.uk/tax-on-shopping/taxfree-shopping

[23] Australian Taxation Office, ‘GST’: https://www.ato.gov.au/Business/GST/

[24] Australian Border Force, ‘Tourist Refund Scheme’: https://www.abf.gov.au/entering-and-leaving-australia/tourist-refund-scheme

[25] Australian Border Force, Tourist Refund Scheme, for travellers: https://www.abf.gov.au/entering-and-leaving-australia/tourist-refund-scheme/for-travellers