What is Duty Free?

Tax Free Wording & Calculator on Chalkboard

Duty free is an expression used to describe merchandise sold in a shop, airport, or other location where the purchaser will not be charged duties and taxes on import. Therefore most duty-free goods are cheaper than they would be elsewhere.

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1. What are some of the benefits of shopping duty-free?

Products may be cheaper than in a regular store as duty-free shops do not have to pay customs and excise taxes when bringing items into the country. 

This is only limited to things that aren’t supposed to require these fees, such as food/drinks/medicines and personal hygiene goods 

Some products also come with extended warranties, which cannot be provided by regular stores.

The difference in price between duty-free and regular products can be quite significant. A recent example is a $15,000 watch that can be purchased for approximately $7,500 in a duty-free shop.

2. Are duty-free products the same as counterfeit?

No! Duty-free shops are legitimate retailers and sell authentic merchandise. However, it is common for people to sell counterfeit items outside of duty-free shops and even inside of some terminals. 

For example, Europe’s biggest fake goods market is at the Istanbul Airport, where salesmen from all over the world gather to sell knockoffs of everything from electronics to clothing to perfume at prices far lower than in retail stores.

3. Can I be arrested for purchasing counterfeit products?

You may have to pay a fine and the merchandise will be confiscated, but you are unlikely to be arrested. As long as you haven’t been explicitly told it is fake (these salesmen are good at their jobs) you have every right to purchase anything from a duty-free shop. 

Even though you may find the prices too good to pass up, remember that if something looks too good to be true, it probably is! Don’t take any chances  just buy your items at the store!

4. What is the difference between a duty-free shop and a tax-free shop?

The terms are often used interchangeably, but there is one primary difference. Sales made in duty-free shops are exempt from taxes but not customs fees, such as excise tax and VAT. Sales made in tax-free shops are exempt from customs fees but not taxes; for example, a country’s national income tax.

5. What items cannot be purchased from duty-free shops?

Certain items must always be purchased outside of these stores – in international airports the list includes liquor, tobacco products, perfume, electronic cigarettes and cameras.

6. What items can be purchased in duty-free shops?

Any item that is not on the prohibited list can be purchased in duty-free shops. The only restrictions are on the amount of money or goods that may be brought into the country. All other duties and taxes (customs, excise tax and VAT) will still apply.

7. Where do I find information regarding my individual country’s import rules?

You can find this information by visiting your country’s customs website: customs.gov, or by looking up your local Customs office in the telephone directory or using a search engine to search for them such as Google Maps (can also try “Customs offices” see if they show up).

Travelers should also consider purchasing a copy of the current “International Air Transport Association (IATA) Tariff Regulations for the Unaccompanied Baggage of Passengers and their Bags” (5th edition). 

8. What should I do if I find a problem with a purchased item in my duty-free bag?

Some shops have policies in place that protect against this, but you should contact your airline and the customs office at the airport where you purchased your items. If the problem cannot be resolved, contact your carrier in advance of your return home and they will supply you with a log at no cost. 

9. If I’m buying cosmetics, should I also buy tax-free items?

No!! Most cosmetics are duty-free through the use of a “tax-free sticker” which is placed on the package prior to delivery. It is imperative that you keep this sticker next to your purchase receipt for proof of duty free sales. 

If you do not have this sticker, the cosmetics are still duty free – just not through customs as it does not show up on the receipt and instead requires an invoice with value for customs payment (they may ask for an additional form that is written in German).

To avoid having your cosmetics confiscated, you may also want to hang onto the receipt in case the customs officer tries to claim that it says “tax-free” when, in fact, it does not and you are obligated to pay customs tax.


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