VAT tourist refunds
Many tourists are clueless about VAT refunds and how to claim them. Every year, tourists leave behind thousands of dollars in unclaimed refunds because they are unaware of VAT or think the system is too cumbersome to apply. The process is similar in many countries, so read on if you shop like I do when on vacation and take advantage of the VAT benefit. This blog post will discuss the VAT refund process here in Thailand.
What is a VAT refund?
Many businesses offer the Value Added Tax refund or VAT. VAT, a reimbursement of the value-added tax placed on goods and merchandise purchased by a non-resident who can be claimed when leaving the country. The VAT rate varies by country and can be anywhere from 5% to 25%. If you visit a country and plan to make purchases, check if the retailer offers VAT refunds.
How to claim VAT refund?
*Ensure the retailer you are purchasing from offers VAT refunds, as not all retailers do.
*Have proof of residency available. You need to have your proof of residence available to initiate the process. Please note that you do not have to carry your passport with you; a copy should suffice.
*Complete the paperwork with the retailer and make sure the information is correct. You will file your claim at the airport, and if incorrect information is on the paperwork, your effort will be in vain. Also, make sure you have the original receipts of items purchased.
*In some cases, you must show the item to customs if the value of the item purchased is over a certain amount. Therefore, travelers should carry high-value items in their hand luggage. If unsure, take your luggage with you before checking in for your flight in case the purchased items are requested to be shown. The VAT refund office is usually located around the check-in area.
*The items must be new and unused and match the receipts presented. In addition, luxury items like jewelry, watches, purses, etc., may have to be shown upon request.
*In most cases, you can request your refund in cash and get it immediately from the customs office. In other cases, if you request a refund by check or by bank transfer, it can take longer.
Is the VAT refund worth the hassle?
If you have just purchased a few trinkets, then the effort may not be worthwhile, but if you spend a significant amount, the effort is worthwhile. For example, in Thailand, the VAT is 7%. For purchases to qualify for the VAT refund, a single purchase must be at least 2,000 baht for a VAT refund. A VAT refund fee of 100 baht (approximately $3 at today's exchange rate) will apply. Cash refunds are available if refund amounts are under 30,000 baht, and if over that value will be refunded by check, bank transfer, or credit to your credit card account.
Were you aware of the VAT refund? Have you ever applied for VAT? Drop a comment; I'd like to know.
