Tourist VAT refunds (Tax Free) allow foreign visitors to recover part of the VAT paid on goods. For sellers, this mechanism does not reduce revenue or create an expense, instead, it affects VAT payable through a deduction based on the Tax Free cheque.
Under the Tax Free scheme:
- The seller charges VAT on the sale in the normal way.
- When a Tax Free cheque is issued and the refund is processed, the seller deducts the VAT shown on that cheque.
- The refund paid to the tourist (or via an operator) is recorded as a liability settlement, not as a reduction of revenue.
- Revenue remains equal to the original sale amount; only VAT payable is adjusted.
In the system, Tax Free sales are supported as Cash Sales. To enable Tax Free processing, the “Tax refunds for tourist scheme” toggle must be activated on the Additional tab of the Cash sale document. VAT adjustments are then recorded using the VAT Adjustment document.
Tourist VAT refund treatment may vary by jurisdiction. Always consult a qualified local tax professional or advisor to ensure compliance with applicable laws and regulations.