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Travels abroad have recently become even more comfortable and neat for citizens of Saudi Arabia and especially for local shopaholics — mainly because of the TaxFree4U, the tax refund operator that helps to refund up to 19% of the value-added tax (VAT) included in purchases in the European Union. Currently TaxFree4U service is available for non-EU citizens around the globe. The service returns VAT for purchases in Italy, Spain, France, Germany and the UK.
The service was established in London, UK in October 2015, and the Head of TaxFree4U Development Department David Shengart says that “establishing the scheme of mutual financial responsibilities between an EU state and a client was the first serious challenge at the time the project's creation.” Yet over the past 1.5 years the company has been dynamically developing and now has partners in more than 30 countries cooperating with banks, travel agencies, airlines and mobile operators. More than 90 employees work in its regional offices in Europe and Asia. The TaxFree4U service is available for non-EU residents around the world but the company pays special attention to Russian, Belarusian, Middle Eastern and Asian markets. As of today, TaxFree4U mobile application has about 20,000 active users around the globe and the number of the users is constantly increasing. The number of Ukrainian and Russian users doubled during the past two months, the company representatives say.
This year Finland and in 2018 Austria, Portugal and Poland will join the list of countries where one can take advantages of the TaxFree4U shopping. The main goal of TaxFree4U is to become a global service for non-EU residents in the UK and the EU member states.
What is tax refund and how to get it
In the EU prices for goods include a VAT which can be described as sales tax added to the price. In Europe, the VAT generally varies between 19—24% but tourists who are not EU citizens and live outside its territory may claim a VAT refund.
The easiest way is to get a tax-free shopping receipt which then has to be given to the customs officer when leaving the EU. The customs-stamped receipt gives an opportunity to get immediate VAT refund at the service's airport desk or a border kiosk.
Another way to get the tax back is to get a refund directly from the shop where you make purchases. To do that, you need to request a VAT refund form, have it stamped by a customs officer and then it has to be sent to the store.
Another way to save on the VAT is to pay with a credit card and ask a shop assistant to make two charge slips — one for the amount without a VAT and another — separate including only the VAT.
After the VAT refund form is stamped by the customs, it has to be sent back to the store where the VAT charge slip will be destroyed without submitting it.
However, it is easier said than done.
In reality a tourist needs to find points with VAT refund-operator signs at the airport. Shops may work with different refund operators, which means standing in several lines to receive a cash refund which many tourists decide to skip due to the lack of time before departure.
Mistakes made while completing the declaration form is another reason why tourists cannot get VAT refunds. Bureaucracy is inevitable, because VAT is refunded by the tax authorities of each country. Tax service returns VAT only to the subjects of tax relations — VAT payers among shops or refund operators. And tourists can get their money back only through either shops or refund operators.
Why choose TaxFree4U?
Convenience
By using the TaxFree4U service a tourist does not need to fill in VAT declaration forms — the mobile application program will do instead of the client. Besides, to confirm the EU non-resident status it is enough only to have a photo of the passport or another national ID card.
The service also makes it possible to combine several receipts in one declaration allowing to overcome the established minimum purchase price for VAT return.
Best service dispatch
Unlike ordinary tax refund operators, the TaxFree4U works with all the shops-VAT payers which means that a client would not need to stand in several lines in an airport to receive cash refund separately from different refund companies.
Saving more money
TaxFree4U mobile application helps to refund up to 19% of VAT while other refund operators generally return not more than 8% of VAT. Moreover, the service has the lowest commission which helps clients to get on average 3-4% more refund compared to traditional services.
Fast refunds
With the TaxFree4U mobile application tourists can return the tax within 48 hours from the moment of receiving the original documents tax on a credit card. For TaxFree4U users who are clients of TaxFree4U partner banks, the refund could be processed even faster.
24/7 online client support
Online support provides hints on customs requirements of each country and navigates in the airport of departure to the special TaxFree4U boxes where once can drop receipts and stamped VAT refund documents.
Useful tips on how to use TaxFree4U service
First, you have to download TaxFree4U mobile application which serves as a refund tool for tax refund and is available on iOS and Android platforms. Then tourists have to save and photograph receipts of purchases done in European stores.
Finally, photos of receipts are downloaded into the application. To prove the non-EU residence, users need to upload photos of the passport or another national ID as well as photos of the pages with Schengen or UK visas to the application.
It's better to do this in the period of at least 24 hours before leaving Europe as the customer support service needs some time to process and prepare your VAT declaration form. Anyway, the TaxFree4U will provide you with a properly completed VAT declaration which the tourist should print out and stamp at the customers' office in the airport. The receipts with the stamped VAT declaration can be dropped into a special TaxFree4U box in the airport or the documents may be transferred to the service partners — the client support service officer will help to choose the best way to deliver the papers.
Within two days after the documents are received by TaxFree4U service, the refund is provided via banking transfer to the credit card. It can take up to a week until the company gets the documents and makes the tax refund.
The TaxFree4U business plan goals
The TaxFree4U entered the VAT refund market in October 16, 2015, and since that moment offices in five EU countries were opened. The company participated in 28 finance-tech summits in the United Arad Emirates, Lebanon, Portugal, Russia, the UK and other countries. In 2016, the service became the winner in the Innovators category on the Finnext-2016 forum in Moscow, Russia — the event for bankers, investors and startupers devoted to financial innovations.
The company sets a goal to modify the procedure of obtaining the VAT through digital service. In the future the algorithm will look like this: a user loads receipts and photos of its passport into the application and shows the passport, receipts and purchases at the customs. The customs officer sees an electronic declaration, puts a digital signature or stamp on it and sends it to the refund operator. With the properly organized process it will take only a few hours to transfer money to a client's card.
The service has expanded to Ukraine, Russia, Moldova, Kazakhstan, Azerbaijan and Georgia. It also has partners in China, India, Singapore, Saudi Arabia, the UAE, Bahrain, Qatar and Kuwait. The TaxFree4U is considering expansion to Japan.
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