Bank of China and Global Blue to manage VAT refunds

By Doug Newhouse |

Chinese shoppersFollowing China’s introduction of its first tax free refund service for overseas tourists to reclaim 9% on all purchases in Shanghai, the Bank of China (BOC) has announced a new partnership with Global Blue to help manage the process.

 

At the same time, the BOC has is now Global Blue’s new banking refund partner for returning Chinese shoppers. Jacques Stern, Global Blue CEO 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 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.

 

Chinese account for third Tax Free

Chinese travellers are now said to account for a third of all tax free shopping.

 

BOC WILL OPERATE REFUND COUNTERS

“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 all this, Bank of China will also operate refund counters from 10 branches ‘throughout China’, with the aim of making the process for Chinese consumers claiming overseas refunds at home much simpler.

 

 

Global Blue adds that this will be the first agreement of its kind in Mainland China, allowing eligible travellers to reclaim the VAT imposed by the Chinese government, when making purchases within the country.

 

SET CRITERIA FOR REFUNDS

Eligibility for VAT refunds for foreigners will be based on travellers meeting a simple set of conditions, which will include possession of a non-Chinese passport (or specified ID from Hong Kong, Macau and Taiwan), receipt of purchase showing a spend of more than RMB500 ($72.46) in one store on the same day, plus proof that the traveller has remained in Mainland China for no more than 183 consecutive days.

 

Chinese shoppers are still very much on Global Blue’s radar, despite fears of an economic slowdown in China

The refund scheme is now another added incentive for ‘foreigners’ and Chinese to buy tax free goods while travelling.

 

Provided all these criteria are met, merchants then provide the shopper with a VAT invoice and a Tax Refund Application Form from the Chinese Government, which includes the description of purchased goods and the traveller’s details.

 

ROLL CALL OF PARTICIPATING RETAILERS AND BRANDS

A total of nearly 200 stores in Shanghai have already signed up to the scheme, including major department stores who include Takashimaya, Pacific, Parkson and Bailian (Group) Department Stores.

 

Luxury brands who are also onboard include Chanel, Hermès, Tiffany and Louis Vuitton; while High Street name such as Zara, Bershka and Marks & Spencer, plus local retailers Silk King, Lao Feng Xiang Jewellery and Chow Tai Fook Jewellery are also participating.

 

In addition, Global Blue management says it will work with Bank of China to encourage local retailers to sign up to the scheme, besides providing licensed retailers with ongoing training for sales staff and updates on the processes surrounding the issuing and completion of VAT refunds.

 

Significantly, Global Blue will manage marketing activities inside and outside of China to increase traveller awareness of the VAT refund scheme.

 

 

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