Many tourists are unaware of the VAT refund and how to claim it. 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 want to 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 is a reimbursement of the value-added tax placed on goods and merchandise purchased by a non-resident that can be claimed when leaving the country. The VAT rate varies by country and can be anywhere from 5% to 25%. That means if you are visiting a country and plan to make purchases, check to see if the retailer offers VAT refunds.
How to claim a Vat refund?
- Make sure 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. Your will k at the airport e 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 receipts of items purchased. You must have the items with you in some cases if the value is over a certain amount or if asked by the customs officer. Therefore, travelers should carry high-value items in their hand luggage. The VAT refund office is usually located around the check-in area. If unsure, take your luggage with you to the office if the purchased items are requested.
- 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 officer. 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%. 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). Cash refunds are available at the airport 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 VAT refunds? Have you ever applied for VAT? Comment below; I’d like to know.
0 Comments