The Traveller Tax Refund: Are You Leaving Money Behind When You Travel?

Most people cite budget as one of the greatest determining factors on whether or not they travel, where they go, and how often they get away.  Did you know that many of these same people are leaving a significant amount of their money behind without even knowing it?  The Traveller Tax Refund, also known as Value Added Tax (VAT) Refund, is a benefit that is often misunderstood even by seasoned travellers.

If you’ve never heard of this benefit before, or if you thought the process was too difficult to bother with, I’m about to open a whole new world for you!

What is the Traveller Tax Refund and Why is it Offered?

The Traveller Tax Refund is a way you can receive some of the tax dollars on qualified purchases returned to you.  It’s best to think of it as a big discount only available to foreign tourists.  We’ll get into the details a bit later.

Countries offer these refunds to foreign travellers to encourage them to make purchases they might otherwise pass up.  Tourism dollars increase for their country, and travellers save money in the process.  Win, win!

How Does it Work?

In general, the Traveller Tax Refund system is an easy one to understand:

1. Make a qualified purchase
2. Prove you’re a visitor (a passport is easiest)
3. Fill out a form
4. Prove you’re leaving the country or region

Don’t be alarmed by the term “qualified purchase”.  Countries impose a lower limit on the amount that can be claimed on a per purchase basis.  Generally, they don’t want to be refunding the tax on every pack of gum a tourist buys.

It’s important to make note what this lower limit is.  As an example, you don’t want to make several $45 purchases only to find out that eligibility is based on $50 purchases.  Knowing in advance would make you consider bundling items you want in 1 shop rather than spreading smaller purchases over several outlets, or at least adding that pack of gum to your purchase to push you over the limit (it’s essentially free anyway when you get your money back).

What Are Some Participating Countries?

Many countries around the world offer some form of a Traveller Tax Refund program, so I’d highly recommend you look into the availability and the rules for your next destination.

Here are a few examples:

Canada: Visitors may be able to claim up to 50% of the GST/HST paid on the purchase of an eligible tour package.

Japan: Visitors who spend more than 10,001 yen on any single day qualify to get the 5% sales tax refunded.

Taiwan: Receipts showing a spending of NT$3,000 on any single day qualify to get the 5% sales tax refunded.

United Kingdom: Visitors with a minimum £30 GBP spend qualify for 20% Value Added Tax (VAT) refund.

European Union: Visitors with a minimum EUR 175 spend qualify for 20% Value Added Tax (VAT) refund (VAT rate and spending thresholds may vary by country).

Australia: Visitors with a minimum $300 purchase qualify for 11% Goods and Services Tax (GST) or 14.5% Wine Equalization Tax (WET) refund through their Tourist Refund Scheme (TRS)

Tips to Get the Most Out of Your Traveller Tax Refund

To give you the best chance of successfully getting your traveller tax refund, here are a few tips that really helped me navigate through the (sometimes confusing) process:

1. Take advantage of locations that offer the program.  Not every shop or hotel will be familiar with the traveller tax refund program, so it makes sense to ask before making larger purchases.

2. Gather the required documentation.  Many locations familiar with the program will have the required documentation ready for you after purchase.  Be aware of what documents you’ll need and make sure you have everything before you leave the store.  You may also want to read through the form(s) and ensure you are able to fill out all the required info.  Be sure to ask a customer service rep if you have any questions.

3. Factor in the time requirements.  Processing is normally done at border crossings or at airports, and can take some time to complete.  It’s also not always the easiest to find these locations, so try to figure that out before arriving or ask at an information desk if available.  Don’t arrive at the last minute assuming you’ll breeze through the line in 5 minutes and still make your flight.

4. Have the purchased items with you.  Some countries require you to show the purchased items in brand-new condition, while others will tell you that’s not necessary.  Be aware of the rules specific to the country you’re visiting – you don’t want to be denied a refund on your new sweater just because you’re wearing it.

5. When will you see your money refunded?  Try to see if there’s a way to get your refund immediately: either at the processing check-point or even in-store at time of purchase.  Some countries will provide your refund immediately while others will require you to mail your documents in (or use a 3rd-party service who charges a processing fee).  Even if you followed all of the rules, when you’re dealing with foreign governments it’s still possible to be denied for unknown reasons.

Is It Worth Doing?

The process can be a little complicated, and you may not be successful in your application.  If you don’t bother to try, you’ll definitely be leaving your money behind … and who wants that!  After consulting the rules for your destination country, if you think there’s a chance you’ll get some money back, I’d highly urge you to give it a shot.  At the very least ask the cashier about the program any time you make a purchase you think qualifies.  It may surprise you that it’s as simple as talking to a customer service representative, and that’s definitely worth your time and effort!

On a recent trip to Europe, my wife and I visited 4 countries over 3.5 weeks.  While touring Austria we began to get asked by some retailers if we were tourists and if we were participating in their Value Added Tax (VAT) Refund program.  We asked for more information and were told that we could receive a portion of our spend back before we left Europe.  What amazing news!

We immediately got online and learned the details of the program.  Each time we made a purchase over the remainder of our trip we were sure to ask for the necessary “VAT receipt”.  Once we got to the airport in Amsterdam (our departure for home), we went to the VAT desk prior to check-in.  We submitted our receipts with proof of purchases and were met with a nice refund directly to our credit card.  So simple, and very worth the small time and effort required.

If you got value from this post please share it with any friends who are about to travel.  I’m sure they’ll be grateful that you’ve made them aware of this potential savings.

Were you aware that these programs exist around the world?  I’d love to hear about your experiences with getting your traveller tax refund.  Let me know in the comments below!

Was this helpful for you?  If so, please share it with a friend who you think would get value!

Be sure to comment below and let me know what you’ve experienced with the traveller tax refund!

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