The UAE is a major shopping destination globally. As a move to encourage tourists visiting UAE, the VAT rules provide for a tourist refund scheme, under which the VAT paid by tourists on purchases in UAE will be refunded to them. Tourists visiting the UAE have a reason for joy as the government has set no minimum limit for tourists’ VAT refund, which has come into effect this Sunday, November 18. Tourists can now claim back 85% of their VAT on goods they have purchased in the UAE while the remaining 15% is charged in administration fees to Planet, the global operator of the refund system. To qualify for the refund, tourists must be at least 18 years old and must intend to leave the UAE within 3 months of purchase along with the goods they have bought. Here is a round-up on how tourists can get VAT refund in UAE.
Conditions for VAT Refund
- Goods in question need to have been supplied to the tourist within UAE
- Tourist must have the explicit intention to leave UAE in 90 days from the date of supply, along with the purchased supplies
- Goods in question must be exported out of the UAE by the tourist within three months from the date of supply
- Tourist needs to have purchased goods from a retailer registered in the system
- Purchase process must be carried out – and the goods exported – according to the requirements determined by a decision of the FTA
- Minimum spend of Dh250 on goods is required to be eligible for the scheme.
- 50 is charged for each tax free tag that is presented at the point of refund.
- Goods in question must not be exempted from refund
- Goods not included under the refund include motor vehicles, boats or aircraft. Similarly, any goods that have been fully, or partly, consumed in the UAE cannot be refunded.
If it is a cash refund, then the limit is Dh10,000 and if it is unlimited, then the tourist will be refunded by transferring the amount electronically to his/her account, debit or credit cards. Planet manages the entire process for tourist VAT refunds on behalf of the UAE’s Federal Tax Authority (FTA). By now, the number of companies registered for the tourist VAT refund scheme has exceeded 4,500 and is expected to reach 10,000 by early next year. The registered companies come from all sectors, mainly electronics, gold traders, general traders, souks and others, he added.
Procedure for Getting VAT Refund in UAE
- Apply for a tax free purchase in participating stores. There are more than 4,000 retail outlets across the UAE connected electronically to the system and can be easily identified by posters displayed on their storefronts.
- Show your passport at the time of purchase to prove that you are not a resident.
- Once the shop logs your information, a tax free tag will be issued on the back of the receipt or invoice and a digital form will be created.
- Claim your tax refund at the point of exit. At the moment the only valid points of exit are Dubai, Abu Dhabi and Sharjah Airports.