When traveling abroad, you may have heard the term tax refund, which is the process of getting back a portion of the tax you paid when purchasing goods and taking them out of the country. This article will explain what a tax refund is, how the procedure works in two popular countries, Singapore and Indonesia, and tips to ensure the process runs smoothly.
What Is a Tax Refund?
A tax refund is a facility that allows foreign travelers to reclaim consumption taxes (such as VAT or GST) paid when purchasing goods in countries that implement such a scheme. The purpose is that when the goods are exported abroad with the buyer, the tax charged can be refunded partially or in full.
Tax Refund Singapore
In Singapore, tourists can use the Electronic Tourist Refund Scheme (eTRS). You must be a foreign visitor at least 16 years old and not a permanent resident. Purchases need to be made at stores participating in the eTRS with a minimum value of SGD 100 including GST, which can come from multiple receipts in a single day.
Upon departure, visit an eTRS kiosk at Changi or Seletar Airport before check-in or after immigration, depending on whether the items are in checked baggage or carry-on. Scan your passport and transaction details to validate your claim. After that, you can choose the refund method: cash, credit card, or e-wallet such as Alipay. Claimed items must be taken out of Singapore within the specified time for the refund to be approved.
Tax Refund Indonesia
In Indonesia, the “Tax Refund for Tourists” scheme is managed by the Directorate General of Taxes. Eligible tourists are foreign non-residents who have stayed in Indonesia for less than 60 days since arrival. Purchases must be made at stores displaying the “Tax Refund for Tourists” logo and within a maximum period of one month before departure. The minimum tax value is IDR 50,000 per receipt, with a cumulative total of IDR 500,000.
If you don’t want the hassle of handling a tax refund, you can choose to vacation in countries with duty-free shopping policies, making shopping more convenient.
Tips for a Smooth Tax Refund Claim
Keep all purchase receipts and make sure the stores you shop at display the tax refund logo. Pay attention to the purchase deadlines and ensure that the items have not been used and will actually be taken out of the country with you. Arrive at the airport early to avoid long lines at the validation counter, and check the available refund methods, cash, credit card, or transfer, for a faster and more convenient process.
