VAT Refund for Tourists in UAE

VAT Refund for Tourists

Federal Tax Authority (FTA) has announced that VAT refund scheme will be implemented in UAE for the tourists from the fourth quarter of 2018.

Federal Tax Authority has appointed ‘Planet’ as its exclusive tax refund operator for the Tourist Refund Scheme which will be rolled out in November 2018.

VAT Refund for Tourists in UAE will start from November 2018!

FTA has said that tourists have to purchase goods from retailers registered in the system (Retailers who have Tax Registration Number – TRN).

Designated spaces will be set up for tourists so they can easily claim taxes through an electronic system, without any human involvement.

All the Non-UAE residents above 18 years will be eligible for the Tax-Free Shopping.

UAE is ready to install a system for VAT refund to millions of tourists from November. Initially VAT Refund system will be available in Abu Dhabi, Dubai and Sharjah airports and by year-end, it will be extended to 12 exit points, including the land borders and ports.

FTA and Tourist Refund Scheme Operator Planet have issued guidelines which states that minimum limit to claim VAT refund is Dh 250.

Tourists will be able to validate their tax-free forms at Dubai International, Abu Dhabi and Sharjah airports until December 16 where after the system will be in place at nine more locations – Abu Dhabi Port Zayed, Al Maktoum airport, Al Ain Airport, Al Ain land border, Fujairah Airport, Hatta land border, Ras Al Khaimah Airport, Dubai Mina Rashid Harbour & Al Ghuwaifat land border.

Tourists will be required to present their goods to confirm that they are not used. Only the owner of the passport under which the tax-free forms are registered will be eligible to collect the VAT refund.

UAE tourists will receive 85%of the total VAT amount after deduction of an administration fee of Dh 4.80 per tax-free form.

For example, if a tourist buys electronic goods worth Dh 220 from an electronic store and spend another Dh 320 on buying garments from another store, he can claim tax refund of Dh 16 on purchases of Dh320 and not against electronics purchase of Dh 220 as it’s below the minimum spend limit set by the authority.

Tourists tax free tag should be validated within 90 days of the purchase. If receipts are not validated within 90 days, the tax-free tag expires and VAT will be claimed.

Tourists can take goods and tagged receipt to the airport, seaport or border crossing. They will be required to visit Planet’s validation point where they can validate the invoices. Once validated, the tourist will be able to choose a refund method whether it will be via cash or credit card.

SAB is one of the approved Tax Agents by FTA and will assist you by providing VAT Deregistration services in UAE. SAB will help your business to grow by avoiding any fines and penalties through providing the following services:

  1. VAT Accounting
  2. VAT Return Filing
  3. VAT Services
  4. VAT Consultancy
  5. VAT Training
  6. Tax Agent Services
  7. Tax Audit Services

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