Are you familiar with the new system that encourages your customers to buy more? Meet eTaxFree!
Thousands of people have already tested this new digital system at Portuguese airports! Update your invoicing system, as it is now possible to quickly, easily and simply claim and receive VAT on purchases electronically . The idea of creating eTaxfree was brought from abroad and was revolutionary.
What changes with eTaxFree?
eTaxfree is an electronic system created to streamline the TaxFree process and established by Decree-Law No. 19/2017 of February 14. It came into effect at the beginning of July and extends to all passengers who do not belong to the EU.
What changes is that, at the time of purchase, shopkeepers have to communicate electronically and in real time with the Tax Authority (AT), instead of using the traditional TaxFree form on paper.
AT will, in turn, pre-validate the TaxFree, also in real time (if the data are correct and the conditions are met), issuing the respective QR CODE, which will then be delivered to the traveller.
In practice, when your customer makes purchases totaling more than €50 (net of VAT) on a single invoice within the country, they are entitled to request a refund of the VAT tax included in that invoice. But the biggest innovation is that it's no longer necessary to validate each invoice individually, as this process is done using dedicated electronic equipment located at various national airports: 8 in Lisbon, 6 in Porto, and 20 spread throughout the country.
All logists who have joined the TaxFree system, which is adaptable to your invoicing system, are covered by the new rules.
Samsys is at the forefront of payment solutions
Although the General Manager of Global Blue Portugal, Renato Leite, mentioned that eTaxfree requires changes in terms of billing and availability by software companies, Samsys is implementing this solution in several stores.
Adapt your invoicing system and ensure the ability to communicate electronically with the Tax Authority. The TaxFree service becomes simpler, faster, and more attractive to your customers, as airport queues are eliminated, encouraging them to buy more.
Advantages for tenants
Direct communication with AT makes the process faster than filling out the paper form. Furthermore, if the buyer already has a valid Registration Code (from a previous TaxFree purchase, less than 3 months old), he does not need to register the relevant data for identification.
At the time of a purchase covered by TaxFree, the retailer must report the following information to the Tax Authority:
- Traveler identification;
- Identification of invoices;
- Quantity, designation and value of goods;
- Amount of tax and respective fees to be charged, if there was no exemption;
- Security deposit amount;
- Value of the amount to be refunded to the tourist.
But after all, how does the eTaxfree System work for your customer?
Upon arrival at the airport in Portugal, non-EU resident tourists must link their passport to their first purchase by scanning it on an electronic reader. This way, all purchases are associated with the passenger's boarding pass and are electronically reported to the Tax Authority.
Before leaving Portugal, tourists must validate the amounts to be refunded, using their invoices, at an electronic kiosk, using their passport and boarding pass. Passengers receive a green light if the validation is confirmed and can proceed directly to the refund counter (of the financial intermediary company or its representative); a red light indicates the need for in-person inspection and validation at Customs before proceeding with the refund.
Portugal as the most competitive destination for shopping
The Secretary of State for Tourism, Ana Mendes Godinho, points out that this measure ultimately makes the country more attractive for shopping and highlights that in 2017, purchases by tourists from outside the EU grew by 37%.
There are four other countries besides Portugal with this revolutionary "eTaxfree" system, just under a different name. This was a measure of Simplex+, a public administration modernization program that promises to further satisfy tourists visiting our country, as the system helps to project a very positive and organized image of our nation , in addition to being a way to prevent tax fraud, as indicated by the Secretary of State for Tax Affairs.
Do you know that…
- “Tax-Free” means purchases exempt from Value Added Tax (VAT).
- Purchases cannot be of a commercial nature (the purpose is assumed given the nature and quantity of the goods purchased).
- The tourist must leave the EU within three months of purchases (with the goods in their personal luggage).
- VAT is not fully refunded to the tourist, as an administrative fee is applied to the process (split later between the trader and financial intermediation companies).
- Billing changes to be taken into account: VAT can no longer be paid (and then settled), and there is the possibility of charging a deposit.
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