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I cancelled an airline ticket (non US) and the refund voucher shows and approx. 5% of refund value deducted under the heading of a "Tax".

Can this make sense under any jurisdiction? I am curious. This would be double taxation since I've already paid a Tax when I purchased this ticket.

I just wanted to get an opinion before I waste time following it up with the airline. I did already call them but the fist tier customer service guys obviously were clueless.

Numbers:

Cancel Fees:          8524
Tax:                   476
Refund Processing Fee: 800
Convenience Charge:    300
Total Price:        10,100

Is this just some programming flaw where a refund has been entered as a "price" and hence subject to a tax?

curious_cat
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1 Answers1

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I don't think it's double taxation. First, let's run some numbers without taxes: say your ticket cost $100 and the fee is $10, you get a refund of $90.

Now in a world of 5% sales taxes, your ticket costs $105 total. They charge $10.50 for the fee plus tax, and give you back $94.5, which is the same as $90 + tax.

Assuming the total that they subtracted these fees from is your original price plus tax, this seems fair to me.

Kate Gregory
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