There is an enormous temptation to buy a watch abroad. You’re on holiday. The bills are at home. Factory tour? Sure! The horological urge is equally strong at the airport duty free shop. Or that fancy foreign watch boutique you entered “just to look around.” Don’t do it! Don’t buy a watch abroad. Here’s why . . . [UPDATE: UK VAT Rebate Still Dead – US Watch Buying Discount Down to 11%]
“Duty Free” is a hassle
A foreign watch dealer is required to charge you Value Added Tax (VAT or sales tax) on your watch purchase. After you pay the tax, you can claim it back from the government (even at “tax-free” locations). To reclaim your cash, you have to follow the government’s instructions to the letter. ricksteeves.com:
Some merchants will reimburse your credit card on the spot, or you may be able to take your paperwork to a nearby third-party agency to get an immediate cash refund (minus a commission for the quick service; these tend to be located at money-exchange counters near touristy shopping areas — think the Champs-Elysées).
In either case, you may need to get the documents stamped at the border, then mail them back; if the shop or agency never receive the documents, they’ll charge the refund amount to your credit card.
What could possibly go wrong? Even if nothing does, even if you enjoy filing paperwork, there’s another reason you don’t buy a watch abroad: Uncle Sam.
U.S. Customs duty limits watch “bargains”
“Duty free” purchases are exempt from taxes imposed by the home country – but not the U.S. Uncle Sam allows returning Americans to import up to $800 worth of merchandise without having to pay duty ($1600 from the U.S. Virgin Islands). Everything above that requires a customs declaration and incurs import tax.
Customs and Border Patrol charges a 3% import tax on the first $1000 beyond the $800 exemption. They charge 6.5% on any amount above the first grand.
Assuming you don’t take the $800 exemption (because you’ve made other other purchases and I hate doing math in public), the feds charge $290 on a $5k watch. They hit you up for $1265 on a $20k watch.
The U.S. is home to over 11k tax jurisdictions. Most of them charge both local and state sales tax. If you buy a new watch in Austin, Texas, for example, the total combined sales tax is 8.25%. On a $5k watch, that’s $412.50. On a $20k watch, you pay the governor and mayor $1650.
Bottom line: in Texas, you’d save $122.50 by buying a $5k watch abroad, and $385 on the $20k watch. You’d save more in higher tax jurisdictions, but enough to cover your expenses and the hassle of paperwork? Not IMHO.
[NB: avoiding U.S. Customs duty (a.k.a., smuggling) is a criminal offense.]
Watches purchased abroad miss out on authorized dealer love
Authorized dealers offer customers hidden value. If the manufacture needs to put something right, an authorized dealer has more juice (access to the corporate mothership) than you do.
They’ll usually pay for shipping and insurance when needed. AD’s also have watchmakers on call who can offer quick fixes and sage advice on which watches don’t suck.
AD’s also have access to information on new models, and the new models themselves. If you’re hunting a grail watch (e.g., a steel Rolex Daytona) every watch you buy at an AD brings you closer to the Valhalla. I scored a Rolex Explorer from a dealer in one week thanks to previous purchases.
Don’t buy a watch abroad. It’s not worth the hassle, the savings aren’t significant and you miss out on AD goodwill. If you want to save big bucks on a luxury watch, buy pre-owned, discontinued or “black market” models from a reputable stateside source.
FAQs
Rolex watches should always be stated when crossing borders. While customs are important to each country/state, paying additional fees are never appreciated.
Do I have to pay tax on items bought overseas? ›
You'll need to pay customs duty (or import tax) on any goods you move across the US border from other countries, though goods from some countries are exempt due to different international trade agreements. The United States Customs and Border Protection (CBP) enforces customs rules.
How many watches can I take from USA to India? ›
Generally, you are allowed to bring up to two watches with you from the US to India. However, if the value of the watches exceeds your personal exemption allowance, you may be required to pay customs duty and taxes.
Should you buy an expensive watch? ›
In the class of mechanical (and quartz), luxury watches are better made and more accurately regulated. In general, they will stand up to wear better and offer better protection from damage over something cheaper. Properly cared for, a luxury watch will last for several decades (or longer).
What happens if you don't declare luxury goods at customs? ›
When a passenger arriving into the United States acquires merchandise abroad (by purchase, gift, otherwise), they must declare it to U.S. Customs upon returning to the United States. If they do not, the merchandise will be subject to forfeiture and the person can receive a penalty.
Do I have to declare watches at US Customs? ›
The key phrase is that non-citizens have to declare the value of any goods they are bringing into the United States that will remain in the United States. if you are entering the US with a watch that is your own and that you will leave with, you don't need to declare it.
How much is customs clearance fee in USA? ›
Merchandise Processing Fee (MPF)
US Customs collects this fee on most shipments that enter the country. It's calculated at 0.3464% of the entered value (the cost of the merchandise, as entered on the commercial invoice you provide to your customs broker), with a minimum of $27.23 and a maximum of $528.33.
What is the duty-free limit in the US? ›
In particular, HTSUS 9804.00.65 allows for the duty-free importation of personal-use articles from a Column 2 country when the fair retail value of such goods is under $800.
What must be declared at US Customs? ›
Types of Goods and to Declare in US Custom Declaration Form
- Personal Belongings and Clothing. ...
- Electronics and Gadgets. ...
- Jewelry and Valuable Items. ...
- Gifts and Souvenirs. ...
- Alcohol and Tobacco Products. ...
- Food Items. ...
- Medications. ...
- Currency and Monetary Instruments.
If you bring a Rolex Daytona watch purchased in the USA to India, you would have to pay customs duties and taxes on the item.
There is no specific maximum number of watches allowed in a carry-on on a plane. However, it is important to consider the size and weight restrictions imposed by the airline for carry-on luggage.
How many watches can I carry to USA? ›
There's no limit. If you are bringing lots of new watches you could be questioned if you are selling them which would be working. If you are investigating in very expensive watches to avoid tax.
Which is the No 1 luxury watch in the world? ›
Rolex: The Top Luxury Watch Brand
Those are some impressive numbers in the retail space, and this doesn't even account for Rolex's dominance in the secondary market! The brand is known for smash hit watches such as the Day-Date, Datejust, Submariner, Daytona, GMT-Master II, and many others.
What luxury watch is worth buying? ›
The best watch brands for investment are Rolex, Patek Philippe, and Audemars Piguet as they are prestigious, exclusive, high-quality brands. Watches by these brands often hold their value or appreciate in value over time. Their ongoing popularity, limited editions, and scarcity drive increasing prices.
Why would anyone buy an expensive watch? ›
A watch, you see, is so much more than just a mechanism to tell the time; it's a statement of style, heritage, and personal branding, and something that many men hold dear. While it might seem indulgent to some, splashing the cash on a luxury watch is an investment, not just in fashion but often in financial terms too.
Do I have to declare my jewelry at customs? ›
All travelers entering the United States must declare items purchased or acquired abroad, including jewelry. It's crucial to: Declare the total value of all jewelry you're bringing into the U.S. Keep receipts or appraisals for jewelry acquired abroad as proof of value.
Can I travel with my Rolex watch? ›
Which Type of Watch to Take on a Trip. Example: The Rolex Submariner is renowned for its durability. With a stainless-steel case, scratch-resistant sapphire crystal, and a solid construction, it can withstand the rigors of travel while maintaining its elegance.
What items need to be declared at customs? ›
You must declare all items you purchased and are carrying with you upon return to the United States, including gifts for other people as well as items you bought for yourself. This includes duty-free items purchased in foreign countries, as well as any merchandise you intend to sell or use in your business.
Are Rolex watches considered assets? ›
Rolex watches are primarily considered as being both in the tangible asset and real asset class due to their physical form as luxury goods and inherent value which may appreciate over time. A Rolex watch is often considered a luxury item with both intrinsic and extrinsic value.
