Duty Free Shopping
 

When a store advertises that it has duty free shopping, what exactly does this mean?

Thanks

pretty much nothing

It's supposed to mean that for some regulatory reason, they aren't required to add the local country's VAT (or local taxes in the US) onto purchases. I don't understand how the stores that advertise that which are in-town manage it. However, the prices aren't regulated so they can just charge more.

The shops away from the airport can offer duty-free shopping only on purchases over a certain (fairly high) amount. At the airport all the prices are free of duty, but that doesn't mean they're cheap: renting space at the terminals is very costly.

Question? Hasn't the EU eliminated this practice? Duty free now seems to mean that you can recover the tax portion of the purchase price if you are not a country native and you will be leaving that country in a short time. Inquire.

Hi

To a Norwegian Duty free shopping is equal to cheap alcohol and cigarettes :-) The EU has more or less gotten rid of this but only when travelling inside the EU. If I stop in Copenhagen there will be one price on stuff for people travelling to another EU destination and another price for me when travelling to Norway (which is still not a member of the EU). But I guess Duty free shopping only means that you don't pay VAT for the goods. But this is not equal to great bargains...the shop can still choose to price the product to whatever they want.

Regards
Gard
Stavanger, Norway
http://gardkarlsen.com

Customs duties and VAT (value-added taxes) are two entirely different things.

Duty-free used to mean you could bring the goods INTO your country and they would be exempt from Customs duties, which is, of course, not true if you bring in more than your country allows..whether it was sold to you "duty-free" or not.

Hi K,

What country?

A duty free store is one authorized by a country's government to sell goods to people who are leaving the country (or who are transients at the airport) without paying the usual import duties.

So the duty free store has a pricing advantage over the competition because their products don't have the duties tacked on. This CAN be a good deal for shoppers (I've seen some great prices on booze some places.) However, do check the prices as there are some duty free stores that just jack the prices up and pocket the extra profits.

Also, the goods are only duty free in terms of that country's laws. When you return to your home country, you might have to pay duty if you are over the dollar or quantity limits set by your country.

You've posted this on the European board, so preumably you're asking the question in a European context.

Actually, import duty is close to non-existent in the EU. It's never charged on imports between EU countries,on imports from most of the countries that surround the EU, or from the poorest 90 countries in the rest of the world. And even on imports from rich countries or strong competitors like China, EU import duty is typically half or less the levels the US charges on imports from the rest of the world.

So what "duty-free" shops (and I can't remember seeing any in Europe outside ports, airports and borders)do is to charge prices without VAT or special excise duty. It's the special duty that makes booze and cigarettes so expemsive in northern Europe - irrespective of whether the booze or tobacco is imported. Savings at ports and borders on duty-free booze can be impressive in northern Europe

Shops in Europe (the laws might be different outside the EU in countries like Russia) can't - and don't - claim <b> duty free </b>shopping, since you always pay excise duty on booze etc. What city-centre shops often offer is <b> tax-free</b> shopping. That is they enable you to reclaim the VAT. This is different from the duty-free shops you see all over Asia.

&quot;Tax-free&quot; shopping outside ports or airports merely offers prices without VAT. Since this is never more than 20%, and since a charge is made for the service, you're not going to save a great deal.

Incidentally, in Britain and Ireland it's a myth that airport prices are inflated by merchants. Both BAA and Aer Rianta make it a condition for all merchants in their airports that prices should never be higher than their city-centre prices, less VAT, less excise duty.

You can find duty-free shops in a lot of places, I think a lot of airport shops use that term because they know it draws shoppers. YOu find that term in the US in airports (I know you do at Dulles). I've seen it in other countries outside US and Europe, also. I've never bought anything in there but I think at Dulles it's supposed to mean Virginia sales/tobacco taxes aren't applied to the product.

All I know is that I've perumed the duty-free airport shops in every place I've been and have never found perfume, in particular, cheaper at the airport duty-free shops than at home or in town. I check perfume for a couple brands I like which are rather expensive, so I know about that. The bottom line is you have to know the price of the items you are considering buying in order to know if it's a bargain (I've never priced tobacco, that could be a good deal as those taxes can be very high).

I don't remember duty-free ever meaning you didn't have to pay duty on the items to customs of your own country, if required, as Topman says.

Good points, FLanneruk, but I know EU shops that advertise &quot;duty free&quot; that aren't at the airport. Here is an example of that term used by a Paris in-town perfume shop, and the term is even used on the official Paris Tourist Office's web site:

&lt;&lt;Office de Tourisme de Paris Adherents / Members:
MICHEL SWISS
16, rue de la Paix
75002 PARIS 42 61 61 11
Telecopie / Fax: 49 27 94 47
Activite / Activity: Boutique Hors Taxe / Duty Free Shop&gt;&gt;

So some French shops translate &quot;hors taxe&quot; into &quot;duty free&quot; in English. I'm not sure what distinction you are making between duty-free and tax-free, as duty is a tax. I think you are saying something that only applies to alcohol and tobacco? I have most often seen the term &quot;duty free&quot; on perfume or cosmetic shops in France (duty-free shops in-town). I have not bought anything at Michel Swiss so I don't know if they are doing something different than just saying you can get a VAT refund.

THis is the CDG Airport's web site statement on what this means (in the airport shops):&lt;&lt;international flights to countries outside the European Union or the French Overseas Dependencies and Territories can purchase goods exempt from VAT (excise duties in the case of alcoholic beverages and tobacco).&gt;&gt;

As for the law that shops can't claim that, here is a web site of a UK shop that names itself that:
www.dutyfreeperfume.co.uk

Now from that website, it sounds like they just want to use that name but are really just selling perfume that they claim is at a discount price. I don't think that law is enforced very well if this can happen, even if it's just the name they are using.