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Ever come across the terms ‘Tax-free’ or ‘Duty-free’ when you shop overseas?  Can you tell the differences between them?

Let’s play a quick game of this or that to see if you know your stuff! If you don’t, no worries – the information you can gain here could come in handy for your future travels. There’s no better time to learn the differences between tax-free and duty-free shopping or perhaps what VAT stands for versus GST – especially with travel going into high gear.

Please hover or tap one of the options to select your answer. Ready? Let’s go!

Question 1: Where can you shop tax-free?

Airport Transit Area
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Shopping Malls

Learn why:

Duty-free shops are located in airport transit areas as well as other international zones such as cruise ships. Most tourists usually visit duty-free shops at the airport just before they depart. 

Meanwhile, you can shop tax-free in stores and malls in the city. However, this only applies to stores that participate in the tax refund scheme. You can check with the retailer whether your purchases would be eligible for a tax refund.

Question 2: What refund are tourists entitled to claim for their tax-free shopping?

Value Added Tax (VAT) or Goods & Services Tax (GST)
Customs Duty
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Learn why:

Tax-free shopping allows tourists to receive a refund of the Value Added Tax or VAT paid for goods purchased. The term Goods and Services Tax or GST is used in some countries.

This process of obtaining a VAT/GST refund enables an individual to receive the benefits of exporting goods out of a country. It also allows retailers and countries to promote shopping. The VAT rates in countries where tax-free shopping is available also differ.

Meanwhile, duty-free excludes all taxes such as liquor tax, tobacco tax, and customs duty in addition to VAT/GST.

Question 3: When does the tourist enjoy exemption of VAT/GST for their tax-free purchases?

Point of Purchase
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Point of Departure

Learn why:

The key distinction between tax-free and duty-free shopping would be the payment of tax when purchasing goods. Tax-free shopping requires you to pay the full price of the item including VAT/GST at the point of purchase then claim your tax refund with a Tax Refund Operator when leaving the country.

For duty-free, you do not have to go through the process of claiming your tax refunds as VAT or GST is not included in the price of the goods upon purchase and is generally done after crossing immigration.

Question 4: Which of these countries can you shop tax-free?

United Kingdom (UK)
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United Arab Emirates (UAE)

Learn why:

You can shop tax-free in more than 50 countries including Singapore, France, Italy, Germany, South Korea, Thailand and the United Arab Emirates (UAE). 

While the UK used to have a tax-free shopping scheme, it has since been abolished in 2021. 

Question 5: Which scheme do you get rewarded for?

Tax-Free Shopping
Duty-Free Shopping
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Learn why:

Yes, you can be rewarded for your tax-free shopping! utu recognises the lack of rewards in the VAT refund space and realises the potential to offer tourists more value when you shop tax-free. Tourists receive about half of their tax refund once it has been processed by the Tax Refund Operator and utu aims to give back more of what tourists deserve. 

With utu Tax Free Card, be rewarded for your tax-free shopping and get back more of your tax refunds! The utu Tax Free Card is a 16-digit virtual card that rewards travellers with 25% more on their refund value – for a USD100 tax refund, you’ll receive USD125 instead! 

How does it work? Simply ensure that your refund is received to your utu Tax Free Card number. This can either be done by informing the shop who issues the form or telling them you will fill it in yourself later. The virtual card will also be personalised with your name on it so you won’t have to worry about some shops’ requirements for the card used on your tax-free form. What more, you can unlock the ability to earn rewards on your tax refunds! 

Were you able to get the questions right?  (If you did not, read our ‘Tax-free vs Duty-free Shopping’ blog to clarify any doubts you might have.)

Great! You are well on your way to learning the differences between tax-free and duty-free shopping. Next, dive into the intricacies and procedures of tax-free shopping.

With this knowledge gained and utu Tax Free Card, you’ve leveled up and are about to avail yourself of the best of both worlds of refunds and rewards. Download the utu Tax Free App today and start being rewarded for your Tax-Free Shopping!

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