Duty free travel shopping : everything you need to know
Are you getting the best deals when you go duty-free shopping? Is duty free the best way to shop smart when travelling?
What is duty-free?
Duty free stores are retail outlets, which sell goods to international travel shoppers. You can take advantage of low prices, which are achieved due to the exemption of local or national taxes. These goods are sold on the condition that they’re carried across the border. therefore duty free shops or stores are usually found within international zones such as ports, airports and train stations, or onboard planes, ships or trains.
The type of goods which are sold are determined by that particular nation and prices vary depending on the country and store. Duty free goods typically include clothing, electronics, jewellery, fragrances, beauty products, alcohol, and tobacco based products.
The World’s first duty-free store opened at Shannon airport in Ireland in 1947, and due to its success the concept has been replicated worldwide.
What documents do I need?
Duty free is available throughout Europe for non EU travellers. Duty free was once available across Europe for European tourists. This was scrapped in 1999. European travellers can shop duty-free when travelling outside of the European Union, to the Channel Islands, Gibraltar, or the Canary Islands..
You are required to present your passport and a valid boarding pass each time you make a purchase in a duty free store. Without these documents you won’t be able to make a purchase.
How does duty-free differ from tax-free shopping?
When you shop duty-free all local or national taxes are deducted from the price, no tax (of any type) is paid at the point of sale.
When shopping tax-free, the customer must initially pay the all taxes. They then have the right to recover the value added tax (VAT). This is done with the support of the store and a tax-free operator.
The tax free law in Spain has changed! In July 2018 the minimum spend was scrapped. Now tax-free shopping inclusive for all non EU residents.
In January 2019 another law change made it compulsory for all Spanish retailers to support travel shoppers in the tax-free refund process. Tax-free shopping is now available throughout Spain. It’s not restricted to international zones, which is the case for duty free.
What are my duty-free limits?
Your duty-free limits (also known as personal exemption) vary depending on the country. There are restrictions on the total value or quantity of goods which you may carry back to your country.
If you exceed your duty free allowance then you may have to pay taxes on these goods. Goods may be subject to confiscation and fines at customs when returning to your country.
Does it mean I will always get the best price?
Shopping duty free may seem like a guaranteed way to get the lowest price on the market. This is not always the case!
With the absence of the competition, stores within international zones often sell goods at inflated prices. Even with the exemption of these taxes prices can remain high. It’s often the case that the same item can be purchased for less on the high street, in shopping centres or online. Convenience also plays a part in driving up prices.
Retailers are not obliged to pass on these savings to their customers. Prices are normally set slightly lower than high street levels. Stores can benefit from much higher profit margins due to the exemption of duty and taxes.
A survey conducted by travel agency eDreams asked 2,000 people about their views on duty-free shopping. The report found that only 6 percent believe that duty-free offers the best price. Also, 52 percent thought that they could find a lower price on the high street or online.
Do your research before shopping duty-free for more expensive items such as clothing, electrical goods or beauty products. Conducting a price comparison can help ensure you get the best deal. Now tax-free shopping has no limits.
You may find better deals on the high street so don’t pay more than you have to!