Why do airports have tax free areas in between although they are on a country’s land and are selling goods which should normally be taxed outside?
In: Economics
Most tax systems have rules stating that goods to be exported are not taxed before export. This is to avoid giving a disadvantage to exported goods when compared to other exporting countries.
Duty free shops in airports are set up on this basis – they are only available to _outbound_ travellers who will technically be exporting the goods. This is why you have to show your boarding pass at these shops, to prove you’ll be leaving the country.
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