Global Blue collaborates on Chinese VAT refund scheme
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Tax-free specialist Global Blue has partnered with the Bank of China to launch a VAT refund service to overseas tourists in Shanghai.
Travellers in Shanghai are now able to save 9% on their purchases as China has introduced its first tax-free shopping scheme for foreign visitors. The scheme will be among the first of its kind in mainland China, allowing eligible travellers to reclaim the VAT imposed by the Chinese government, when making purchases within the country.
For travellers, eligibility for VAT refunds will be based on a set of simple criteria. These include possession of a non-Chinese passport (or specified ID from Hong Kong, Macau and Taiwan), receipt of purchase showing spend of over RMB500 ($72) in one store on the same day, and proof that the traveller has remained in mainland China for no more than 183 consecutive days.
If these eligibility criteria are met, merchants simply have to provide a VAT invoice, then issue the shopper with a Tax Refund Application form provided by the Chinese Government, which includes the description of purchased goods and the traveller’s details.
Global Blue will work with Bank of China to encourage local retailers to sign up to the scheme. It will also provide licensed retailers with ongoing training to sales staff and consult on the processes surrounding the issuing and completion of VAT refunds.
Already almost 200 stores in Shanghai have already signed up to the tax-free shopping scheme, including major department stores [e.g. Takashimaya, Pacific, Parkson and Bailian (Group) Department Stores], luxury brands (e.g. Chanel, Hermes, Tiffany and Louis Vuitton), high street names (e.g. Zara, Bershka and Marks & Spencer) and local retailers (e.g. Silk King, Lao Feng Xiang Jewellery and Chow Tai Fook Jewellery).
“Bank of China will operate refund counters from 10 branches throughout China, making it easier for Chinese consumers to claim overseas refunds back home.”
Global Blue CEO Jacques Stern commented: “We are excited about launching this partnership with Bank of China, a true market leader in the international banking space. The VAT refund service represents a great opportunity for merchants in Shanghai to attract high-spending international travellers and encourage higher spend in-store. For visitors to the city, this scheme will bring obvious benefits, allowing them to shop and spend with leading Chinese merchants for less.”
Bank of China vice president Mr. Wang added: “This is a very exciting period for Shanghai’s retail sector and we are confident the introduction of these services will be a powerful tool in helping businesses connect with valuable international shoppers. Global Blue’s experience of promoting and supporting Tax Free services around the world make it a valuable partner and we look forward to a long and happy working relationship.”
In addition to merchant support, Global Blue will manage marketing activities inside and outside of China to increase traveller awareness of the VAT refund scheme. Promotional channels will include Global Blue’s website, app and a wide range of traveller focused collateral including SHOP Maps and point-of-sale materials. The partnership will also see Global Blue collaborating closely with local governments’ tourism departments.
In addition to VAT refund services in Shanghai, Global Blue has also named Bank of China as a banking refund partner for returning Chinese shoppers across the country. Bank of China will operate refund counters from 10 branches throughout China, making it easier for Chinese consumers to claim overseas refunds back home.
Questions & Answers
Q.Which types of retailers in Shanghai have signed up for the new tax-free shopping scheme?
Which types of retailers in Shanghai have signed up for the new tax-free shopping scheme?
Almost 200 stores in Shanghai have joined, including major department stores, luxury brands like Chanel and Louis Vuitton, high street names such as Zara and M&S, and local retailers like Silk King and Chow Tai Fook Jewellery.
Q.What is the minimum spend required for a traveller to be eligible for a VAT refund?
What is the minimum spend required for a traveller to be eligible for a VAT refund?
To be eligible, a traveller must show proof of spending over RMB500 ($72) in a single store on the same day. This amount applies to purchases made within the country that are subject to the VAT refund scheme.
Q.What specific criteria must overseas visitors meet to qualify for a VAT refund?
What specific criteria must overseas visitors meet to qualify for a VAT refund?
Visitors must hold a non-Chinese passport (or specified ID from Hong Kong, Macau, Taiwan), spend over RMB500 in one store per day, and have stayed in mainland China for fewer than 183 consecutive days.
Q.Beyond Shanghai, how else is Global Blue partnering with Bank of China?
Beyond Shanghai, how else is Global Blue partnering with Bank of China?
Global Blue has also designated Bank of China as a banking refund partner for Chinese shoppers returning home. Bank of China will manage refund counters at 10 branches across China for these overseas refunds.
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