Archive for the 'Cross border shopping' Category

Jun 23 2009

Can Canadians claim tax refund from US shopping?

Published by under Cross border shopping,Vat Refund

I was asked the question:

Can Canadians claim back the tax they paid on clothing items…etc when cross boarder shopping? If so, how can I claim this?

The answer is “depending on the country and depending on the goods”.

For instance, if you’re cross-border shopping in UK, you can claim back the VAT (Value Added Tax) you paid in UK stores. There’s a HMRC offices handling VAT refund in major UK airports, e.g. Heathrow and Gatwick. You can claim VAT refund by bringing the receipts, your passport and the goods (to prove that you’re taking them out of the country). There is a leaflet you can get from HMRC at the airport.

Most other European countries offer similar VAT refund programs. South Africa also has a similar VAT refund program for tourists. Here’s a more complete list of countries which refund VAT to varying degrees.

Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Monaco, Netherlands, Portugal, Spain, Sweden, and the United Kingdom), Canada, Croatia, Czech Republic, Estonia, Hungary, Iceland, Japan, Liechtenstein, Luxembourg, Norway, Slovenia, South Africa, South Korea, Turkey, and Switzerland.

The main idea behind VAT refund is that governments do not charge the tax on exports of goods to other countries. So naturally, you cannot claim back the VAT on goods and services you consumed within the foreign countries, e.g. gas, car rental, meals and hotel etc.. However, VAT refund may apply to some services used by business travelers.

One thing to watch out for in VAT refund is the minimum spend. Most countries specify a minimum amount you must spend in a specific shop or chain store to claim a refund. The minimum amount ranges from US$ 25 in Sweden to US$ 340 in Switzerland.  Because of this rule, mos tof my spending are not qualified for VAT refund.

Sadly, Uncle Sam does not offer any VAT or sales tax refund. Each state in US charges their own rate of sales tax. The tax is not refundable when you leave the country.

15 responses so far. Leave a comment

Jul 07 2008

Class action against FedEx Trade Networks

Published by under Cross border shopping

I’ve been amazed by how FedEx Trade Networks (and other couriers) could charge a hefty brokerage fee for very little service and get away by doing so like an unalienable right.

Well, Mr. Matt Blackman of North Vancouver, British Columbia decided to stand up and filed a class action against Fedex Trade Networks and Fedex Ground Package System. According to the statement of claims (No. S066949 dated 01/23/07) in the Supreme Court of BC, Mr. Matt Blackman ordered automotive accessories from Santa Monica, CA, which were delivered to his home by Fedex.

Subsequent to delivery and by a letter dated June 16, 2006, Fedex demanded payment from the Plaintiff of the following Improper Charges:
(a) Brokerage fee: $27.00
(b) GST calculated on brokerage fee: $1.89
(c) Disbursement fee: $5.75
(d) GST calculated on disbursement fee: $0.40
(e) Total Improper Charges: $35.04

… The Disbursement fee of $5.75 amounts to interest charged by Fedex on the funds advanced for the payment of GST and PST calculated on the value of the goods shipped and represents a “criminal rate” of interest as set out in s.347 (2) of the Criminal Code in that it substantially exceeds 60% which is the maximum annual rate of interest allowed to be charged on credit advanced.

All BC residents being charged by Fedex for disbursement fees can be part of the class action. You can read the court filing here.

Leave a comment

Jun 14 2008

Canadians still pay more

Published by under Cross border shopping

Over 8 month back when “Better Value in Dollar” site was being built, I thought we Canadian will soon get the good prices of Americans. Sadly, this is not true, after a strong show of Canadian economy and the Lonnie.

Douglas Porter, deputy chief economist at Bank of Montreal, published another survey result of 19 essential daily products (coffee, doughnuts, books, and handbags, etc.) yesterday. Canadians are still paying 18% more than US counterparts, before taxes are calculated. This gap is better than a year ago at 24%. Your dollar has better value south of the border.

We have found a different way to get a good bargain. You can mail order (usually cheaper than regular store price) and deliver to the border for pick up. Read our article here.

BTW, though Americans are screaming for high gas price, they are only paying a national average of US$1.07/liter (US$4.05/gallon), comparing with Canadian national average of CA$1.31/liter). Well, fellow Canadians, it may be worthwhile shopping for gas across the border.

3 responses so far. Leave a comment

« Prev