South Africans are throwing away millions in tax refunds while travelling abroad and this needs to stop!

2019-02-23 06:30 - Selene Brophy
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If there is one thing any South African knows, it’s that our rands don’t hold the best purchasing power when it comes to visiting Europe.

The currency has fluctuated between R16 to R17 to the Euro, over the last year alone.

Yet, trip after trip we’re paying R80 for a couple of cups of coffee, while leaving behind anything between 8% to 25% in tax on everything we spend, depending on which European country you’re visiting. Keep in mind that exact rates change (and vary with the type of goods being purchased); you can double-check with merchants of the country you're visiting.

After a recent visit to Spain, where the tax is as much as 21% (suddenly our recent 1% vat increase doesn’t seem so bad, does it?), I realised all the palaver one has to go through to collect the tax works more in the European Union’s (EU) favour than our own.

READ: SARS requirements for declaring valuable goods travellers need to know about

Sure, collecting it on coffee and meagre purchases are more trouble than it's worth, but if your visit happens to coincide with the famous end-of season-sales across Europe, you may just want to go through the effort of getting back your tax. Consider this, you find bargains at less 75%, add together with the reclaimed 21% in tax (when you get it) and you could well score the item for next to nothing. In principle, that is.

Here’s what you need to do in order to practice getting your tax back during your 'shopping spree' in Europe:  

First and foremost, bring your passport along on your shopping trip. My attempt to claim my tax back at Santiago’s International airport turned to naught because while I had my slips I did not have the correct slips.

You need to show your passport to the tellers and ensure they give you the required receipt - with a special bar-code in Spain's case - that allows for easy processing of your tax refund.

You’re not entitled to refunds on the tax you spend on hotels and meals but you can get back most of the tax paid on merchandise such as clothes, shoes or electronics. According to the South African Revenue Services (SARS), you are allowed to bring in new or used goods into South Africa to the value of R5 000, in addition to personal effects and duty-free allowances.  

READ: SA travellers' 5 favourite European escapes according to Schengen Visa applications

It’s also important to keep in mind that some countries have a minimum spend before foreigners can claim their tax back. It used to be €90 in Spain but this was waived in July 2018 to allow claims on any amount, making it easier to get your tax back.

So what do you do if you don’t have the proper receipt issued?

Well, there is a 90-day grace period within which to get the correct receipt issued from the retailer and then stamped by Customs. The only catch is that you will have to have all the items detailed on the receipts with you and unused. This is a bit hard to do if you’re travelling to SA, even with a multiple entry Schengen visa, so make sure you get the right receipts first time round.  

READ: Foreign currency jingling in your pocket? What you need to know about exchanging Forex in SA

Generally shops that are popular with tourists know the ropes and even have a sign at the till displaying the option to request a tax-free form. Some of them can even refund the tax right there. However, always attach your receipt to the tax-free form as soon as you complete your purchase. Store them all in one, safe place – making the process for stamping easier at the airport. 

You also have to arrive earlier than usual at the airport if you plan on getting your claims stamped.

It took me quite a while to locate exactly where the customs offices were. Because you need to show your purchases as per the receipts you submit, you should submit your claims before checking in your luggage. Also, the items need to be as bought, so don't wear any of your purchases to the airport. 

Travel TV Show host Rick Steyn suggests getting your refunds processed at your last stop in the EU, if you travel through more than one country, regardless of where you made your purchases.

“So if you buy sweaters in Denmark, pants in France, and shoes in Italy, and you're flying home from Greece, get your documents stamped at the airport in Athens. (If the currencies are different in the country where you made your purchase and where you process your refund — say, pounds and euros — you may have to pay an extra conversion fee.) Don't forget — Switzerland, Norway, and Turkey are not in the EU, so if you buy in one of those countries, get your documents stamped before you cross the border.” 

Once you get your forms stamped by customs, you then have to submit them for processing. If your purchases were bought from a merchant who works with a refund service such as Global Blue, you can find their offices at the airport and get the refund immediately - however they will take a cut as part of their service.

Other retailers will require you post your approved slips to them for a refund. This means it could take a while to be processed. Expect your refund in the currency of the country from which you depart. Otherwise, refunds will reflect on your credit card, within an estimated 60-days, so keep an eye out for it. 

All in all, the process is not easy but - if you've spent quite a bit - it could be well worth all the effort. 

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