Duty free shopping guide
01/11/2022
Duty-free shopping started in the 40s at Shannon Airport in Ireland. The service quickly gained popularity by catering to trans-Atlantic flight passengers during refuelling stopovers, marking the beginning of the travel retail industry as we know it today. Read this guide to understand how duty shopping works and learn some useful tips.
What does duty free shopping mean
Duty-free shops waive local taxes and duties on merchandise when sold to travellers who will immediately take the items out of the country.
These shops are typically found after security checks in international airports, train stations, sea ports, land border crossings, or on board aeroplanes and cruise ships. By operating in such specifically designated zones, duty free retailers can legally avoid national tax levies.
The products and quantities eligible for tax exemptions vary by country.
Best things to buy in duty free shops
Traditionally the best items to buy duty-free are cigarettes and alcohol as they are levied with high taxes in most countries.
In general best duty free purchases fit the following criteria:
- small enough to be carried as hand luggage on your flight
- valuable enough so as to offer significant tax savings
- common enough so that the average traveller would want to buy them
This is why most airport retailers tend to look the same, selling products such as perfumes, make-up, sunglasses, gadgets and Swiss watches.
What is duty free allowance
Usually international travellers can bring with them goods upto a certain total value without having to make a customs declaration or pay taxes. This duty-free allowance only applies for goods carried in the traveller’s personal luggage and is typically higher than the duty free allowance on goods delivered commercially, such as by post (i.e. cross-border online shopping).
If you exceed the duty free allowance for your destination country, you would need to pass through the red channel on arrival, declare the goods to the customs officer and pay any local duties and taxes due. If you are travelling to the UK you can make the customs declaration online, learn more here. Keep your purchase receipts in case you need to evidence the value of your goods to customs officers on arrival.
Duty free allowance by country:
| Cigarettes (number of sticks) | Alcohol (spirits, in litres) | Total allowance for other goods | |
|---|---|---|---|
| USA | 200 | 1 | US$800 |
| China | 100 | 1.1 | ¥5,000 |
| Russia | 200 | 3 | €1,500 |
| Australia | 25 | 2.25 | AU$900 |
| Malaysia | 200 | 1 | RM700 |
| Canada | 200 | 1.14 | CAN$800 |
| UK | 200 | 4 | £390 |
| India | 100 | 2 | Rs50,000 |
| Ukraine | 200 | 1 | €1,000 |
| Singapore | 0 | 1 | S$500 |
| EU | 200 | 1 | €430 |
| New Zealand | 50 | 1.125 | NZ$700 |
| Hong Kong | 19 | 1 | N/A |
| South Africa | 200 | 1 | R5,000 |
How to make the most of your duty free allowance
- Duty free allowance applies per person. If you are travelling as a family, each member would be entitled to their own allowance increasing the joint value of goods that you can import together.
- Underaged children, typically below 18 years old, are not allowed any tobacco or alcohol and can sometimes have a reduced personal allowance for the value of other goods.
- Some countries may have lower limits for travellers by sea or land relative to those arriving by air transport.
- Reduced limits can also apply for shorter stays/trips of less than 2-3 days so as to avoid abuse by frequent travellers or commercial traders.
- There is also a minimum time period, e.g. a calendar month or similar, that must pass before the allowance can be used again.
- If you exceed the tax fee allowance you might be taxed on the total value of all goods and not just the excess - do check this point for your destination country as it varies by country.
Difference between duty free and tax free shopping
Duty free shops sell their products without local duties and taxes because their customers are usually about to leave for another country and, therefore, automatically meet the export criteria on their purchases. That's why international zones of airports are an ideal location to serve passengers before their departure abroad in order to meet the special legal status of a duty free store.
By contrast, tax free shopping is done at any retailer provided they can issue the required documentation to the traveller. In this case the retailer makes a normal domestic sale, inclusive of local taxes, and the traveller can later claim the tax amount back subject to proving that the goods were exported.
Is duty free shopping cheaper
Not necessarily! Simply because products are sold without local taxes does not automatically mean that they are cheaper than on the high street. In fact, there have been reports of airport duty free retailers often charging unsuspecting passengers price mark-up that more than offset any benefits of tax deductions.
So next time make sure to do a quick Google search before making a purchase as it might make more sense to buy the same items online or from a normal shop when you make it to your destination.
Can I buy duty-free online
Yes, you can if any of the duty free retailers at your departure airport offer the online service. However, you would need to pick up your tax free purchases in person after passing through airport security or have them delivered to your departure gate.
Some airlines also offer a similar duty free shopping experience whereby you can buy online and collect the purchases just before your flight.
In all cases the general rule for online duty free shopping is that you can’t buy duty free without flying but you can pre-order your duty-free products online for collection at the airport.