Seoul Useful Tips: Tax Refund

Singaporeans love to shop, and if the collective wisdom of our shoppers are right, everything outside of Singapore is cheaper and worth every effort to shop for.

Well I was down in Seoul and had done a fair share of my shopping. The amazing thing about Seoul (and places like Taipei) was that despite the low prices, non-existent of customers (the cafes are always homey and empty), the stores still remain open, if not have multiple outlets along the same stretch of street.

Admittedly, claiming tax refund had never been my thing. I had either shopped at 3rd world countries like Nepal (and claiming tax for things that cost that low? Hmmm…) or didn’t spend enough on luxury goods, like I did in Paris.

So this trip to Seoul actually marked my first time claiming tax refund and as my brother N was as totally clueless, I thought there really should be a step-by-step guide to claiming tax refund for every country. And why should it not be my personal mission?

Basics

First things first, do note that there are currently 6 tax refund agents. My entry and examples will be based on Global Blue and Cube Refund because they were what the stores I visited offered.

My tax refund examples were issued by outlets from Nature Republic, both along the same street in Myeong Dong, but they offered different companies and I didn’t realize the difference until I tried to claim from one with the other. *Note: This is the first reason why I wanted to offer a guide for tax refunds.

Granted, there should be a way to figure out which agent, coupled with the right store, would offer the most discerning shopper the ‘best deal’. However, as a lone, male traveler whose main aim is to enjoy the travelling, saving costs is a must, but not the utmost priority. That would be left for people who travel to source for goods for business needs.

The practical scenario for a savvy traveler would more likely to involve one entering a unique, non-franchise store, that happened to be along the way to another tourist destination.

Other important, but negligible (for a seasoned traveller) criteria include:

  • Traveller staying in Korea for 6 months or less.
  • Purchase is made within 3 months from departure.

Before Purchase

With the basic premise in mind about not nitpicking for the companies, the first thing to note before making a big-ticket purchase would be to find the logo that says “Tax Refund”. This could be simple and intuitive, but it’s also most easily overlooked.

Do note that only purchases of more than 30,000 KRW in a store are eligible for tax refund. Therefore, it makes more sense to collate purchases within the traveling group or to collate all the intended purchases to a single store. Impulse buying is definitely not recommended.

The tax claimable would mainly be 10% Value Added Tax, with the rest being luxury tax.

On Purchase

During payment, ask for a tax refund slip, as it is not the cashier’s default task.

One way to confirm that you have received the right form is that the receipts would be presented to you in an envelope of a tax refund company.

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A sample of the tax refund slip, which is a separate slip of paper from the receipts.
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The envelopes to contain the papers. Instructions and maps are also drawn on the envelopes. In the case of “Cube Refund”, they issued separate leaflets too.

The directions to claim refund in the airport(s) would be printed on the envelope, or on the attached leaflet. My focus would be on claiming tax in Seoul and Incheon International Airport.

Downtown Claim

To the uninitiated, tax claims usually involve the confirmation that one is departing the country in the near future (usually set at 3 months) to prevent frauds. This would mean ensuring that one checks in with the tax refund companies after clearing the customs. Therefore, although the companies provide the convenience of making claims downtown, this is more for visitors to have more cash on hand to do more shopping, than for other value add.

As mentioned earlier, the envelope would have contained the name of the refund agent, and in the case of Myeong Dong, which is a popular shopping district, the map of the nearest downtown agent. This is where taking note of the agent is important. Don’t make the mistake I committed!!

Remember to bring along your passport (I know, as a frequent free and easy traveler, there is a higher chance of losing the passport when you bring it around), and a non-local credit card in addition to the receipts and forms. The handler would take care of the rest.

The downtown claim is only the first part of the claim process. In particular, you only receive around 45% of the tax claimable, with the remaining credited into the credit card produced after leaving the country.

This is where Part 2 comes in. The handler would provide a form for you to produce at the tax refund counter in the Departure Hall of Incheon Airport. If you fail to do so, the 45% received in cash at the agent would be debited from the credit card produced. Despite official notice, the process of downtown claim would end at the Departure Hall.

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For the tax refund I made downtown (Global Blue), I would have to go to the tax refund counters to get the slips ‘stamped’ by the customs officers. Here, I was told my tax refund journey for this receipt had ended.

Airport Claim

Although claiming tax refund at the airport also consists of the 2-part process, with Part 1 conducted in the public area and Part 2 in the transit area, there is less hassle, because:

  • No need to produce passport.
  • No need to show goods.
  • Self-service tax refund kiosks, for 4 tax refund agents.
  • No need to differentiate between different agents.

That being said, the official instructions were somewhat different, which cautious travelers can follow:

  • Pack the goods to be shown in a different luggage.
  • During check in, tell the ground handler to hold back checking in the said luggage.
  • Bring the luggage to the tax refund counter together with all relevant documents
  • After verification by the customs officer, check in the goods at the refund counter.

Travelers with higher risk appetites can check in their luggage straight and proceed to the tax refund counter, located behind Row D and Row J, near the excess baggage counter.

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The tax refund counters, behind Row D of the Departure Hall.

For the automated machines, it is only for Cube Refund and KTis. The purpose of the machine was to tag the receipts and forms to your passport. Auto-approval is given for claims less than 10,000 KRW. For higher claim amounts, the goods and receipts still has to be screened by the customs officer at the refund counter.

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The self-service kiosks, which are also manned by customer service officers.
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Each kiosk is around 8 feet tall, with display big enough for the weak-eyed. There are 10 languages offered and they employed the intuitive graphic and tapping display we are so used to now. However, I did not really got to understand the machines, as the customer service officer was quick to offer her assistance to me and took over most of the job.

The final step to all the claims, be it one chooses the option of downtown, airport or automated machines, would end at Gate 28 (Gate 27 for automated kiosks) in the transit area. Only the refund done through automated machines can be claimed through the ATM machine near Gate 28. The rest would still be processed manually by the customs officer.

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The tax refund counter inside the transit hall, at Gate 28. This is for passengers who carried out manual refund at the Departure Hall.
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The self-service kiosks, which are identical to the ones in the Departure Hall. Passengers like me, who made claim for Cube Refund using the self-service kiosks at the Departure Hall, would complete this step here, and receive the cash.

*Caution: With the exceptions of Korean Air and Asiana Airlines, all other international flights take off and land at the satellite terminal. Departing passengers would be taking a one-way trip to the satellite terminal, which has none of the tax refund counters. Therefore, always remember to carry out your tax refunds before you step onto the one-way escalator down to the skytrain station.

Recommended Actions (Summary)

As always, I tend to add a lot of details in my description. Here is a watered down version of what I feel would work best for a (lone) male traveller:

  • Plan and consolidate all purchases. Points for consideration:
  • Purchases more than 30,000 KRW.
  • Purchases at a single location with “Tax Refund” logo
  • Request for tax refund forms. Note the tax refund agent.
  • Complete check in procedures at Incheon International Airport.
  • Conduct automated tax claim; and/or
  • Proceed to the tax refund counter between Section 3 and 4, near the excess baggage check in.
  • Show receipt, tax claim forms at the counter.
  • Proceed to Gate 27/28 to complete claim procedures.

And voila! That would be the procedures for tax refund after a round of crazy shopping at Seoul.

 

p/s: This very late post was really meant to be published in May, some time after I returned from Seoul. However, the tax refund using downtown claim method was not transferred to my credit card. However, back in July, I asked N, who made some big purchases on his own, to try the airport-claim method. At the very least, I can now safely say that the airport-claim method is reliable.

Resources:

“Tax Refunds”,
Official website of Korea Tourism Org

“Automated Tax Refund Service at Incheon Airport, Korea”,
Great Eastern Tourist Blog Events

“Travel to Korea: How To Claim Your Tax Refunds”,
Living in C Major

9 thoughts on “Seoul Useful Tips: Tax Refund

  1. Hi, I’ve done the tax refund at myeongdong . Then when I reached incheon international
    Airport, can I submit the forms to the customs at counter J or D before heading to the airline counter ?

    1. Hi, yes, you will still have to proceed to the customs counter (not the kiosks). They now have staff in between the kiosk and customs counter to provide assistance too, which I thought was a very value adding gesture! 🙂

  2. hello, i am writing my account on the tax refund process in seoul on my blog, may i use your photos? I will credit your photos and link it back to your blog. 🙂

  3. I was traveling to Seoul from Oct 11 to Oct. 17 2016.i had 6 receipts of tax refund total that I supposed to get back 180 us dollars,in the Seoul airport I was told by a lady who looks like working for the airport to check the tax refund receipt for the departure travellers., to go to the gate 41 to apply for the refund instead of gate 28(that was my Seoul tour guide tell me to go to).yes ,then I went to gate 41, but I didn’t get enough tax refund as I pre-caculate before, they only refunded me back 135 us dollars.I am just wondering if I came to the right gate 41 to get the refund ,or the agent at gate 41 was fraud and unhonest . I already asked the agent there was some mistake,intead the agent said it was correct and ask me to step aside to let people behind me to continue .I was so disappointed about the fraud they were doing on me . should I come back to Seoul to travel with such dishonest system?

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