No vacation is complete without first trying on a perfume-scented glove from duty-free shops at the airport.
With the anxiety of transit, check-in and customs behind you, you enter a process that attacks the senses: flashy whiskey displays, exotic aromas, and chocolate-sized bars. novelty is calling you to reach into your pocket.
But is tax exemption really the driving force behind Aladdin’s discounts? Or is it just a well-marketed myth?
We wanted to know so we looked at the costs of eight popular duty-free pillars spread across multiple categories and cross-matched them against 12 major airports to see which offered the best value.
What is tax exemption?
Duty is the tax you pay when bringing a product across international borders. This includes value added taxes and customs duties, which vary by country.
The story of duty-free goods began on Ireland’s windswept west coast in 1947. It was the brainchild of Brendan O’Regan, a controller at tiny Shannon Airport, a popular refueling site. variable for flights carrying celebrities (the only people who could afford transatlantic air travel at the time) between the United States and Europe.
Related: Your essential guide to airport duty-free shopping
O’Regan recognizes these super-rich passersby as the great source of Shannon’s untapped fortune. So he convinced the Irish government to create a tax loophole that would allow him to sell farm food and Irish whiskey to transit passengers, with the usual customs duties. They never leave the airport, he argues, so why should they pay local taxes on products they won’t consume locally?
The idea took off. Inspired by Shannon’s success, Amsterdam opened its own micro free trade zone in 1957, before the concept reached the US in 1962.
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In 2021, according to Detailed information about Fortune businessInternational visitors spent US$35.87 billion on duty-free shops, a figure expected to more than double by 2029.
Basic Rules
The retail world has changed a lot since the 1940s. In today’s age of online discounts, year-round sales, and increasing competition for consumer attention, duty-free goods have really save you money? And if so, where can you get the best deals?
We have selected some of the most iconic products from the most famous brands that you can see in any duty free store around the world.
It is important to note that in some countries, such as Turkey, it is illegal to advertise alcohol or tobacco products, meaning that the prices of some items are not available online and are not available online. can be provided remotely. In other cases — such as Madrid, Rome, Prague and Warsaw — requests for more information about some of our products (especially tobacco) have not received a response from airports and retailers. duty-free retailers we contacted at the time of writing.
Related: How to travel Madrid on a budget and still have a great time
We then looked for the best online and street prices we could find for each product. To ensure parity, we’ve excluded limited-time offers or seasonal discounts from our searches.
The products we have reviewed are:
- Jack Daniel’s Tennessee Whiskey (1l).
- Talisker Dark Storm Single Malt (70cl).
- Taittinger Brut Reserve or Moet&Chandon Imperial Brut (75cl).
- Hendrick gin (1l).
- Dior J’adore Eau de Toilette for women (100ml).
- Versace Eros Eau de Toilette for men (100ml).
- YSL Rouge Pur Couture lipstick (3.8g).
- Ray-Ban Wayfarer Folding 50 Sunglasses (or similar Wayfarer).
- A case of 200 Marlboro Gold cigarettes.
The airports we have reviewed are:
- London Airport (LHR).
- New York JFK (JFK).
- Rome Fiumicino (FCO).
- Berlin Brandenburg Airport (BER).
- Stockholm Arlanda Airport (ARN).
- Adolfo Suárez Madrid–Barajas Airport (MAD).
- Athens Eleftherios Venizelos (AIA).
- Václav Havel Airport Prague (PRG).
- Warsaw Chopin (WAW).
- Istanbul International Airport (IST).
- Mexico City Airport (MEX).
- Dubai International Airport (DXB).
main point
In short, VAT varies from country to country, so there’s no hard rule about what you can save on duty-free purchases. In the UK, the standard rate for most goods and services is 20%. In Italy, is 22%; in Luxembourg, it’s 17%. The United States, on the other hand, does not levy VAT. Although, like most countries, it requires consumers to pay some customs duties when bringing certain goods out of the country.
In addition, tax-free rates vary from airport to airport depending on local costs such as staffing, rent and rates, and other taxes. In other words, they can price pretty much as they see fit. As a result, tax-free prices at one airport may not be consistent with prices at another airport within the same country.
With that in mind, here are a few things we learned:
- Never buy sunglasses at airports located in sunny countries.
- On average, Sweden is one of the cheapest places to buy alcohol products at airports.
- Dubai airport is one of the cheapest places to buy tobacco products.
- Buy perfume and make-up duty-free in Poland.
- Don’t buy Champagne at New York City’s JFK Airport.
- Tax free isn’t always the best deal in town. If there’s something you really want, always check online first for better deals.
Which airport has the most expensive duty free shops?
Perhaps unsurprisingly, Dubai – where the duty free shop has delivered 976 million USD in 2021 — the most expensive airport on average when it comes to alcohol and beauty products.
Interestingly, however, JFK was the most expensive airport on our list to buy Champagne specifically – $18 more expensive than the average across all airports we researched.
The most expensive sunglasses are in Mexico City and Dubai – the two places on our list where you’re most likely to need them.
Which airport has the cheapest duty free shops?
When it comes to alcohol, the Swedish capital, Stockholm, offers the best average value out of all the airports we surveyed. There, a bottle of raw Champagne costs just $34 (£28), compared with $39 (£32) at Heathrow and $50 (£41) in the supermarket. Meanwhile, a bottle of Tallisker premium scotch costs $59 (£49) in Stockholm and $74 (£61) at Heathrow.
However, if American whiskey is your thing, the best prices are in Warsaw, where a 1L bottle of Jack Daniels costs just $21 (£17), almost $12 (£10) cheaper. compared to at Heathrow and half the price in UK supermarkets.
Warsaw is also where you can get the cheapest beauty products, always cheaper than the airport average when comparing individual products.
Related: Where is the cheapest tax free? We checked 50 airports to find out
As for tobacco products, those who commit to smoking are happiest in Dubai, where 200 Marlboro Gold cigarettes cost $27 – a third of the price of the same box at Heathrow and 500% cheaper than the price of the same box at Heathrow. with the British supermarket.
What products are cheaper to buy at the mall or online instead?
The truth is, for many products, there’s not always much of a difference between the tax-free price and the price you can buy at home — especially if you’re prepared to shop online.
The main difference is tobacco and alcohol, both of which are often highly taxed and can therefore be obtained a lot cheaper at the airport.
Related: 7 ways to save for your next family vacation
But it’s a more complicated picture when it comes to beauty products. A stick of YSL Rouge Pur Couture, for example, costs $36 (£30) in UK stores – exactly the same price you’d pay at Heathrow. And the only two airports where you’ll pay less than that are Rome and Warsaw, to save about $3.
The same goes for accessories like sunglasses and watches. We’ve found that, while airport prices can be competitive with what you’d pay at a Ray Ban store in central London, a quick online search will often yield a much better deal.
What are the tax exemption rules in the US?
You can’t fill your suitcase with whiskey and perfume on your trip home from Greece. But the US has pretty generous subsidies for what you can bring in.
When entering the US, visitors can bring duty-free one liter of alcohol and up to 200 cigarettes. US Customs and Borders Patrol Site (CBP). citizens also have the right to bring $200 worth of goods into the country without paying extra taxes.
However, if you exceed the allowable limit, you must pay taxes and duties on the total value of the goods, not just the excess value. You may also have to pay import VAT and customs duties if you exceed your allowance.
Related: How to buy rare and exclusive spirits at duty free shops
bottom line
To get a tax-free bargain on anything that isn’t alcohol or tobacco, you should always do some research before you travel. Because duty free is not always as good as it is marketed.
Online discounts or in-store deals can often make lower-taxed items at home cheaper than at the duty-free store, especially if you’re shopping for makeup, where you may find that discounts Tax free is no better than a gift set offered at your local pharmacy or beauty store.
If you’re looking for a pair of designer sunglasses or big-brand perfume, know the prices at home and on the web ahead of time so you can spot a bargain if and when you see it on your holiday. me.
