Development in Tax Refund Options Broadening Possibilities for Chinese Tourists in Europe
Chinese outbound tourists have developed a reputation as the highest spending travellers in the world and shopping is still seen as a fundamental aspect of the experience of going abroad. So renowned has Chinese tourists’ love of shopping become that the Japanese have coined a word, bakugai, to describe the ‘explosive’ consumption tendencies of Chinese visitors. For Europe, recent forecasts speak of around 8% growth of spending on luxury goods in 2017 by Chinese tourists.
That is not to say that Chinese tourists do not like a bargain. Tax-free shopping thus holds a particular allure to travellers to the EU, as it allows shoppers resident outside of the bloc to reclaim around 20% of the total purchasing amount once they take their goods home at the end of their trip. Tax refund services have long been dominated by two companies in particular: Global Blue and Premier Tax Free. However, the procedure for claiming tax back is often cumbersome and difficult to use, while VAT can only be refunded from shops that have agreements with one of these companies. Tourists are also often unclear on the role of these companies and how the tax refund process actually works.
Earlier this month, a Chongqing-based company called Zapptax released an app in a bid to provide a more transparent alternative for travellers wishing to reclaim their VAT on goods bought while on holiday or on a business trip. Currently operational in France, the UK, Spain and Belgium, Zapptax could become a new and very disruptive presence in the tourism tax refund industry.
The app, which can be downloaded at Zapptax.com, is different in that it can be used in any shop where goods that are eligible for VAT refunds are sold, unlike competitors’ services, which require retailers to have an existing agreement with their company. Zapptax notably offers a higher rate on refunds with no hidden charges, while the availability of constant support, via a 24 hour in-app chat function, has the potential to revolutionise how shoppers are informed on the tax refund process.
As outlined in last week’s COTRI Weekly, Mainland Chinese visitor numbers grew 14% to destinations outside Greater China in the first half of 2017. This fact combined with Zapptax’s plans to soon venture into additional EU countries mean that the release of this app could be very good news for European retailers and Chinese travellers alike.
by Michael Devane,
The COTRI Weekly, 22 August 2017, 11:55