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  #1  
Old 11-19-2001, 01:51 AM
Kayeby Kayeby is offline
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Join Date: Feb 2001
My sister is going overseas for Christmas, and we're going to go Duty Free shopping - I desperately want to buy a digital camera and Gucci glasses but Cath is less than happy about the prospect of lugging my stuff around for her trip.

Now I have a vague idea of how Duty Free shopping works (I think). You go with your plane ticket to the Duty Free store and you get substantial discounts on cigarettes, perfume, sunglasses, electronics, etc. As soon as you take the items out of the country and you can unwrap them.

What I don't understand is why the discount is given in the first place. Does it have something to do with the VAT? And why do you need to take the item out of the country to open it?
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  #2  
Old 11-19-2001, 02:26 AM
Hemlock Hemlock is offline
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Join Date: Nov 2001
Check local prices before you go and compare them with overseas "duty free" prices.

How much duty is payable on a digital camera or Gucci glasses in your country?

If you live in a country with very high tariffs on foreign products (typically a 3rd world dirtbag type country) or very high prices (Japan), picking up duty free things when overseas makes sense. But if you live in the US or somewhere, there are not many real bargains to be had buying "duty free" goods these days.

There are exceptions - women I know rave about perfume at Dubai Airport - and tobacco and alcohol are obvious items. You just buy them at the airport before you leave for home.
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Old 11-19-2001, 04:02 AM
TheLoadedDog TheLoadedDog is offline
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Kayeby, your sister might be able to pick up some stuff duty free at Tullamarine on the way back. I'm not sure about Melbourne, but in Sydney you can do that. It's also possible to buy it on the plane itself. Granted, it might not be the very cheapest duty free you'll find, but it will save lugging stuff about overseas. If she's going to Asia though, it might even be cheaper to buy stuff at a regular shop. The airport stores there are as pricey as here. It's difficult these days, you really need to shop around.

A related anectdote: a friend of mine recently had a visit from his mother in England. She asked him if he'd like a gift, and he told her he'd love a bottle of duty free Scotch. Trying to be helpful, he said, "Mum, don't worry buying it at Heathrow, you can pick up a bottle duty free in Sydney after you get off the plane".
So he's there waiting for his mum, and she finally turns up in the arrivals hall already having been through immigration and customs, gives him a kiss on the cheek and says, "Right. Where's this duty free shop then?"
All together now: D'OH!!
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  #4  
Old 11-19-2001, 04:11 AM
Mersavets Mersavets is offline
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The idea is that a country will benefit if you a buy a product in that particular country. Since you are going overseas, you will be more likely to buy it where it is cheaper. One way to make it cheaper is to remove the taxes due on the product. Even thou gh you don't directly pay a tax, the owners of the store will pay a corporate tax and its employees will pay income tax. So governments figure something is better than nothing.

In reality, the savings are very small especially here in Australia. Duty fre e shops usually just hike their prices accordingly. There are 2 exceptions; alcohol and smokes. This is because we tax the hell out of these products in this country.

I buy to the limit on both of these, drink one and sell or bribe with the other.

VAT =GST for us although it is much higher in the UK but yes, this is one of the duties the products are free of.

You need to take the product out of the country to ensure the nation of purchase isn't missing its fair tax revenue on the item. Some shops will allow you to use the product until you are ready to leave the country and then they will bond the goods for you. This is supposed to be very off the record though.
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  #5  
Old 11-19-2001, 07:43 AM
HeyHomie HeyHomie is offline
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I Still Don't Get It

Let's say I want to buy a bottle of XYZ Liquor when I'm in Paris. At Pierre's Shoppe de Liquer it costs, accounting for exchange rates and taxes and what have you, $40. Had it not been for the taxes, it would have cost $35. OK, so I go to the duty-free shop. No taxes, but the shopkeeper charges $40. Where's the savings?
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  #6  
Old 11-19-2001, 08:28 AM
geepee geepee is offline
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Join Date: Aug 2001
You are shopping at the wrong stores for duty free and oh the EU parliment scrapped duty free in the EU you can only get it if traveling outside the EU . However for ciggies US is dirt cheap anyway by the carton and AUS$ is 1 = $3AUS
which makes your 1 go a very long way.
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  #7  
Old 11-19-2001, 08:41 AM
Spoons Spoons is offline
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Mersavets has put it nicely--you must take the product out of the country to ensure that the nation where the item was purchased isn't missing out on the tax revenue it would have had if the product had been purchased and used inside the country. "Tax" or "duty" in this sense refers to hidden-in-the-price excise and/or VAT taxes as well as any sales taxes at point-of-purchase, which is why tobacco and alcohol are usually the best buys.

Although you won't see it on cameras and perfume and other gift items, you will see this foreign use stipulation mentioned on some tobacco products bought at duty-free stores. If you buy American cigarettes at a US duty free, you'll see "US tax exempt. For use outside the US" on each package. On duty-free cigarettes bought in Canada, the words "tax exempt" appear on the cellophane seal. This is so that if you re-land the items in your home country, the customs officer knows.

Yes, sadly, any goods that you (or your sister) bought at a duty-free store before leaving must be declared if (or when) you bring them home. They can make up part of your non-taxable allowance, but generally, if you bought them at a duty-free before leaving home, and you return them to your home country, you have to declare them to your home country's customs officers.

Tobacco and alcohol are generally heavily excise-taxed, so they can be good buys at duty-free stores. Sunglasses and digital cameras probably are not as heavily excise-taxed. So it might not be worth risking your sister's ire to have her lug around these items for you--especially since, when she brings them home, she will have to declare them and possibly pay tax on them anyway. Do a little research on these items at regular prices and at duty-free prices, and see what arrangement works best for both you and your sister.
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  #8  
Old 11-19-2001, 09:59 PM
Kayeby Kayeby is offline
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Join Date: Feb 2001
Thanks for the answers guys. I'll definitely do a bit more research before I part with my lovely, lovely dollars.
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  #9  
Old 11-19-2001, 10:15 PM
lawoot lawoot is offline
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This last summer my family took the ferry from Port Angeles, WA to Victoria, BC. We got to the ferry a few hours early, so we went to the duty free shop. US citizens had to keep their items out of country for 48 hours, but could then return with them. Cigarettes were limited to one carton per person, so my sister (the lone smoker) bought five cartons (one for eachadult in our family). No problems, and Customs didn't even ask about them when we returned.
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