Duty-free trade

The term is used in two senses. The first is duty-free retail at airports, seaports and border crossings. The second is a trade regime between countries under which duties on each other’s goods are reduced to zero by agreement.

Duty-free shops

Goods in these shops are under customs control, in the duty-free trade customs procedure. Duties and some taxes are not charged on them because the buyer takes them out of the country. Only international passengers can buy, so the shops are usually located in the zone after border and customs control. Import allowances in the country of arrival still apply as usual, and purchases from such a shop count toward them too.

Tax-free shopping works differently. The buyer pays the full price in an ordinary shop and, when taking the goods out of the country, reclaims part of the VAT on the basis of the paperwork.

Free trade between countries

Countries sign free trade area agreements and remove duties on some of each other’s goods. There are no customs duties in mutual trade within the Eurasian Economic Union. To get a zero or preferential rate on imports from a country outside the union, the importer proves the origin of the goods with a document in the prescribed form.

How this relates to payments

The absence of a duty does not cancel other rules. The supplier is paid under the contract, and the payment abroad goes through currency control. Only the amount of customs payments in Russia changes. So when calculating the cost of an import, count the payment to the supplier, the duty, VAT and delivery separately.

Suppliers of duty-free shops are paid the same way as any foreign seller: under the contract and the invoice. If a direct transfer does not go through, we select an agent for the destination and the currency. More details: Import payments.