Steps to get VAT refund for tourist in UAE

Federal Tax Authority in UAE has announced that eligible tourists can request refunds of VAT incurred on their purchases in UAE.

Anybody who is not a resident of the UAE is eligible for Tax-Free shopping, under the current rules, GCC Nationals are eligible.

Tax-Free shopping means when a tourist purchases goods in the UAE which will be exported (subject to terms and conditions). Shoppers can obtain a refund on the VAT on the items purchased, provided that they validate their purchases according to local rules.

All the requirements will be determined by FTA, which may include the procedural, verification and fomentation requirements, which need to be met by the Overseas Tourist, the Retailer, the Operator, and any other person for the Scheme, and appoint any person and stipulate the conditions and procedures necessary for operating the Scheme. The goods excluded from the scheme shall be notified by FTA.

Authority appoints the operators who operate the scheme.

Only the Overseas Tourists who meet the conditions stipulated by the Decision are eligible for the refund.

Also Read: Recovery Of VAT For Entertainment Expenses Of Employees In UAE

If any retailer who meets the specific criteria by the Authority has the option to participate in the Scheme. The FTA has issued Decision No. (1) specifying the Requirements for Retailers to participate in the Tourist VAT Refund Scheme.

  • Step 1 Determine the conditions to fulfill

For a tourist to claim a VAT refund on purchases made in the UAE, he must fulfill certain conditions:

  1. The tourist must purchase the goods from a retailer who is participating in the ‘Tax Refund.
  2. He must have an intention to leave the UAE within 90 days from the date of supply, along with the purchased supplies
  3. He must also export the goods purchased out of the UAE within three months from the date of supply.
  4. The process of purchase and export of goods must be carried out according to the requirements and procedures determined by the Federal Tax Authority.
  • Step 2 Check designated places available for VAT refund scheme

A tourist can refund the tax paid for shopping from the outlets and point of sales which are registered under the Tax Refund Scheme for tourists.

There will be designated places where the tourists will be able to avail the VAT refund scheme through an electronic system. A digital machine will be able to determine the taxes that are eligible for refund and then the tourist shall be paid accordingly.

  • Step 3 Get the tax-free tag

Once a tourist has finished with the shopping, a tax-free bag will be attached to the payment receipt. This tax-free tag is very important as it allows the tourist to avail the refund scheme with a minimum purchase of AED 250. This tax-free tag is valid for a period of 90 days from the date of purchase.

  • Step 4 validate eligibility for VAT refund

The validation process is mandatory in order to avail the tourist refund scheme. The tourist has to provide the passport and boarding pass and additional checks will be carried out to ensure everything is carried out in the right way.

  • Step 5 Pick a method of refund

The two types of refunds in which you can avail tourist refund scheme i.e. by cash or credit.

Vat Refund for Tourist in UAE

The new amendment for VAT refund for tourists will be fully electronic with minimal human intervention, leading to excellent customer experience for both Retailers and the FTA.

VAT refund for tourists specifies various conditions and procedural requirements for the Retailers, the Scheme Operators, and the Tourists. It is important that the tourist before visiting UAE should have proper knowledge regarding the VAT refund scheme. If you don’t have enough knowledge it is better to monitor the latest clarification and judgments issued by the cabinet. For further information contact experts.

The refund scheme is a very attractive scheme for tourists visiting UAE. It has been implemented to provide an incentive for tourists to shop in UAE. It is outlined in a manner that tourists will be able to collect a refund of VAT at the time of departure from the airport.  If you want to know more about the VAT refund, contact our tax experts in UAE.

What is the minimum purchase required to get a refund?

The VAT paid cannot be refunded unless the total value of tax purchases is Dh250.

Can I buy from just any store and get a tax refund?

This amendment has so far enlisted more than 4,500 stores. The number, however, is expected to increase next month, providing more options for shoppers.

What is the maximum limit on refunds?

The maximum limit for each tourist can get cashback worth not more than Dh10,000 daily.