Digital tax refunds, fee settlements provide convenience for Chinese heading overseas
If you ever drop spare change, do you pick it up? The answer is most likely "yes".
However, every year, hundreds of millions of dollars are being left behind as cross-border travelers don't reclaim the value-added tax that is available to them.
According to data from SAP Concur, about 4 percent of global travel spending offers reclaimable VAT. Moreover, a recent study by Taxback International, a specialist in global VAT recovery and compliance, noted that up to $30 billion is going unclaimed annually in VAT recovery on travel expenses.
The primary cause boils down to the fact that overseas travelers don't want to go through the hassle of doing the paperwork required to get the money back, or they feel intimidated by the long lines at tax refund centers.
Today, for outbound Chinese tourists, the tedious refund process, the long lines for rebates and the seemingly endless wait for money to materialize are becoming a thing of the past, thanks to the aid of technology that simplifies the procedure.
The country's two largest mobile payment platforms are competing to offer streamlined refund services to tourists. Tax refunds now only take the blink of an eye, circumventing the need to fill in lengthy forms containing billing details, and the subsequent months of waiting.
Formed in partnership with Global Tax Free, Alipay, Ant Financial's payment tool and a subsidiary of Alibaba Group, claimed that its new paperless mobile tax refund function launched last year was the first of its kind worldwide.
The system allows Chinese tourists to apply for and claim tax rebates with the Alipay mobile app. Users must remember to scan their tax refund receipts within 90 days of product purchase via the app to receive an instant refund in yuan.