Saturday, 12 October 2013

Paying "duty"

I am soon to be returning to Canada and since I travel back and forth between France and Canada, I am at the mercy of airport personnel questioning me about my claims of purchases and possibly some of my high end products. I have a story about a fellow, who traveling from the USA to Canada, was questioned about his cashmere luxury brand sweater. The customs agent asked why he did not "claim" the sweater on his list of purchases. The sweater was not new. Still the agent had the authority to charge him since the traveller had no receipt. And in fact the agent was about to do exactly that. However, the sweater was old enough that the fellow had kept no receipt and so instead of paying a charge, he took the sweater off and asked the agent to throw it in the garbage. I imagine he was saying to himself, this sweater owes me nothing and he wanted to demonstrate to the customs agent, I would rather dispose of the sweater than oblige to your insistence. If he had the receipt at home, he could have paid the charge and then applied to the Canadian authorities for a refund. Here is a case where you are guilty until proven innocent.

But so it is when dealing with any customs and immigration. I understand the necessity for the authority they must posses but when it comes to sweaters and purses and shoes, sometimes I think the customs officer must be bored to be so preoccupied with such frivolous items. 

Because we travel regularly between Europe and Canada, I do not want to be red-flagged and so I am impeccable with my list and with receipts although I am still perturbed with some of the requirements expected of the traveller. I have debated this issue with a Canadian lawyer and with an accountant with Revenue Canada. I always lose the debate. The law is the law and no matter what my rationale is, none of my points are going to make a difference to the customs agent who is only doing his or her job. Therefore I defer to being meticulous with my expenses and my list.

In Europe, there is a VAT (value added tax) that can be up to 19% on certain categories of items. Store policies vary but a general rule is that on any given day, you must spend at least €175.00 and ask for a tax return document, which the shop personnel must complete. I did buy from a shop called Sandro in the Marais just last week and the "form" came from the cash register in the same format as the receipt. Now I don't know if all shops have this capability but this is definitely a recent innovation, making the process easier for both the shops and the consumer.

You need to offer passport information in this process and then you must have the purchase verified before you leave the country (go through security). This requires that you must have the receipts as well as the actual items. In Paris, if your items are in your checked baggage and you go to the tax kiosk after, you will be out of luck. They need to see the actual items. I was in Charles de Galle airport just last week and the agent did not ask to see my item however most other times I have been required to show what I bought. I wouldn't risk not putting those items in your carry-on. 

After that process, you can then check in and drop the document in the post. You will receive the tax back as a credit to your credit card account. Or you can walk a few meters to another kiosk and if you pay a commission of just over 10% you can get Euros or whatever currency at the airport. I bought an item for €195. and received €20. and change back. The actual tax was €23. and change for the purchase.

In the past, the issue here too can be that this service by shop-owners can be inconsistent - some have the forms, some don't; some have lower or higher minimal purchases and the whole process can be annoying for both sales personnel and customer. However, I do not know if all shops have the new cash register receipt form that I encountered in Paris this year. The best service for tax returns, of course, is in the department stores and in luxury brand stores. One more thing, you must have your passport for this process.

The only advice I can give, and I do follow it, is to keep all receipts  and be aware of the necessity for receipts of high end items, no matter how old, particularly when you may have already paid duty on them. 

Echoes from the voices of my mom and my Girl Guide leader are in my head, "honesty is the best policy" and "be prepared".

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