Duty-free shops (or stores) are retail outlets that do not apply local or national taxes and duties. Duty-free shopping is a bit of misnomer though because shoppers may still have to pay duties in their home country on items purchased from a duty-free shop. They are often found in the international zone of international airports, sea ports or onboard passenger ships.

They are not as commonly available for road or train travelers, although several border crossings between the United States and Canada have duty-free shops for car travelers. These outlets were abolished for travel within the European Union in 1999, but are retained for travelers whose final destination is outside the EU. They also sell to intra-EU travelers but with appropriate taxes.

Some special member state territories such as Åland, Livigno and the Canary Islands, are within the EU but outside the EU tax union, and thus still continue duty-free sales for all travelers. All travelers living in a country outside the EU[clarification needed], are privileged to shop tax-free at shops outside EU airports. The traveler pays the VAT over goods in the shop, and can request for a refund when exporting the goods.

General restrictions are that a traveler must have residency in a non-EU country, has a maximum stay of 6 months when visiting the EU, purchases are made three months prior to export, only goods meant for personal use are eligible for the refund. Travelers need to save purchase receipts and visit Customs before leaving the EU to get a export validation stamp. Receipts can then be sent back to the retailers for a refund request.

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