Holders of China-based UnionPay (銀聯) credit cards are to be able to file for value-added tax refunds (VAT) in select department stores in Taipei and Kaohsiung starting on Tuesday, the Ministry of Finance said yesterday.
The move to allow UnionPay cardholders to get VAT refunds in the two cities is expected to encourage Chinese tourists to spend more after getting cash back, the ministry said.
Currently, only holders of Visa, Master and JCB credit cards are eligible to file for VAT refunds in the Taipei 101 shopping center, the Zhongxiao branch of Pacific Sogo Department Store (太平洋崇光百貨), the A8 branch of Shin Kong Mitsukoshi Department Store Co (新光三越百貨) in Taipei and Hanshin Department Store (漢神百貨) in Kaohsiung.
Following criticism that excluding UnionPay cardholders from the service was not fair to Chinese visitors, the ministry said it agreed to change its policy to encourage Chinese tourists to spend more and boost the nation’s tourism income.
UnionPay, a financial services corporation headquartered in Shanghai, is the largest credit-card issuer in China. At present, its cardholders can only file for VAT refunds on their way out of the country.
The decision to lift the ban on VAT refunds for UnionPay card holders in the four department stores followed moves by several other countries to allow UnionPay card holders to get tax refunds in their downtown areas.
Such services are now available in the UK, France, South Korea, Italy and Denmark, the ministry said.
When UnionPay credit cardholders get VAT refunds in cash in the four department stores, they are to be asked to give a credit card guarantee for the same amount, the ministry said.
If the Customs Administration confirms that the UnionPay cardholders have taken the tax-free goods with them when they left Taiwan, the credit card guarantees for the refunds are to be canceled, it said.
Taiwan has been making an effort to streamline the VAT refund mechanism to improve the local tourism environment.
In addition to the VAT refunds in downtown areas in Taipei and Kaohsiung, the customs agency has introduced automated machines designed to issue VAT refunds to foreign visitors at 10 airports and eight seaports in the nation.
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