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).
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.