tax-law
GST/VAT tax. Why some countries return tax to tourists?
<p>Some countries return tax to tourists in airports.</p>

<p>I don't understand it. Why is it happening? What was the logic behind the decision? Why is it only related to purchase tax and not to income tax? Why is it so important to preserve original packaging?</p>

<p>It is obviously a sort of segregation and nationalism. Why did people vote for it?</p>

<p>I have heard that European countries are doing it along with Japan, Australia, and maybe some other countries are doing it as well...</p>

<p>The law obliges businesses to charge  GST/VAT when the goods/services are delivered <em>within</em> the country. There is no such obligation on export, which means that foreigners can pay less.</p>

<p>Why? Because taxes of country X are generally supposed to be paid by tax residents of country X, not by everyone all over the world. Not imposing GST upon foreign shoppers makes the country more competitive and stimulates export which is good for the economy.</p>

<p>At airports the government returns GST because shops can't sell without GST to just anyone who promises to export the thing. If you export, you get GST back. If you don't, you don't.</p>

<p>Items need to be in original packaging because otherwise frequent travellers could exploit the scheme getting GST for their laptops every time they fly overseas.</p>

<p>Income tax and nationalism are not relevant here at all.</p>

<h2>Because that’s the law</h2>

<p>If you want to know why the law is that way, that’s a political question not a legal one. Post the question on the politics SE site.</p>
