After countries go thru all the trouble of taxing imports, why then would they allow ppl to just buy whatever they want duty free? Why do these shops exist? What benefit do they serve? And why are they only at airports?
In: 390
Most tax systems don’t levy taxes on goods that are going to be exported. Doing so places them at a disadvantage to goods from other companies. Why would someone buy an imported widget that is artificially more costly than it needs to be?
Similarly, there are countries where, on your way out, you can get a refund of at least some of the VAT you paid while there, as long as you can substantiate it. Japan is an example of a country with duty-free shops outside the airport. If you drop a lot of yen at certain stores and show them your passport, they will lop off the VAT.
Duty free is available all over the place, look for the little sticker at the entrance. I worked in a store on the outskirts of a larger city, not a place tourists would really frequent unless they were visiting a local, or chose to rent a car and drive around and randomly stumbled upon the place. It wasn’t often we had duty free shoppers, I had 2 in 10 years. We would just fill out a form, give it to them, then they could get the dues refunded at their departure port, pretty simple.
Just a small correction, duty free stores are no only found at airports, they are found at most exit points for a country. So, for example, you will find duty free stores on the land border between Mexico and America.
The “why are they only at airports” part is probably because international airports are technically treated as little stateless enclaves within their host country for legal purposes.
In Japan, you can buy duty free at random stores throughout the country, not just the airport.
High margins for airport stores for last minute buyers. Waives some of the taxes, bit often it’s cheaper to pay local tax. I sometimes buy cigarettes in the US. They are so marked up at duty free, I just but them at a store, pay the local tax. Some US states have no sales tax so there’s no benefit.
It’s worth noting beyond what others said that when in an airport security zone from an international flight, you are sort of outside of the direct jurisdiction of any country and are in a sort of international area. It’s also why some people who were wanted by certain countries or stateless end up living in the security area of an airport. It’s a rare thing, but it does happen.
If you find yourself in a place where the country the airport is in is unwilling to grant you a visa, and where you flew from won’t accept your documents for a return flight, you have basically nowhere to go, and leaving airport security areas would be illegal border crossing.
Wow, I guess I’ve been missing out on some border-crossing shopping sprees! Thanks for the tip!
Latest Answers