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Sales Tax Rebate Processing Requirements

Sales Tax Rebate Processing Requirements
December 21, 2017 ATM Pacific

Overview: A rule to clarify the requirement that merchants process sales tax rebates as original credit transactions will take effect 13 April 2019.

Many governments allow tax-free shopping for foreign travelers. Merchants, acquirers and solution providers collaborate to offer sales tax / value-added tax (VAT) recovery to foreign travelers when they leave the country with purchased goods.

To ensure this practice is conducted according to the Visa Rules, Visa is mandating that merchants:

• Use original credit transactions (OCTs) for sales tax disbursements

• Follow dynamic currency conversion (DCC) rules if the amount rebate is converted from a merchant’s local currency to a cardholder’s billing currency Visa is clarifying the existing merchant processing rules to ensure acquirers and service providers that offer sales tax recovery service can place the funds on the cards.