The UAE has now officially joined the list of countries that returns a part of tax money back to tourists, thanks to the VAT refund scheme. According to the announcement made by the Federal Tax Authority (FTA) made in November 2018, it was clearly laid down that foreigners making purchases while on vacation in UAE would be able to start claiming the value-added tax (VAT) charged to their purchases.

If you are soon to visit Abu Dhabi, Dubai and Sharjah International Airports as a tourist, you can now start claiming refunds. In fact, each traveler can get a cashback of up to Dh 10,000 daily. However, all refunds will be applicable for a 15% administrative fee, besides a 4.8% tag fee for every individual claim. According to Premjit Bangara, general manager for travel at Sharaf Travel Services in Dubai, this VAT refund scheme is expected to impact tourism very positively, as it will encourage tourists visiting Dubai to spend more on retail. Consequently, they will be paying highly competitive rates which could be the best worldwide once they receive their refunds. He further added that it will add UAE into an elite group of nations offering VAT refunds to foreign tourists. Tax invoices issued from 18 November 2018 only will qualify eligible tourists to reclaim taxes on their purchases.

Conditions that tourists have to meet to claim their VAT refunds:

As a tourist, if you want to claim VAT refund on purchases he made in the UAE, he/she has to fulfil the following conditions:

  1. Goods must be purchased from a retailer who is participating in the ‘Tax Refund for Tourists Scheme’
  2. There is no exclusion of goods from the Refund Scheme of the Federal tax Authority
  3. The tourist should have the explicit intention of leaving the UAE in 90 days starting from the date of supply, along with the purchased supplies
  4. The purchased goods should be exported out of the UAE within 3 months from the date of supply
  5. The process of purchase and export of goods should be implemented in accordance with the requirements and procedures determined by Federal tax Authority

As a tourist, where and how can you claim VAT refund for your shopping:

The Federal Tax Authority has allocated certain spaces for tourists to reclaim taxes through a fully electronic system, characterized by its simplicity, accuracy, and speed. It is managed in partnership with a global operator. Tourists will receive their refunds through a special device that will be kept at the departure port, whether you are travelling by air, water, or land. You simply need to submit the tax invoices for your purchases from the outlets registered in the Scheme, along with copies of your passport and credit card. After these documents are furnished, tourists can either recover the VAT in cash form as UAE dirhams from the global operator, or have the amount transferred to their credit card. Until October 2018, 4000 retail outlets across the UAE were connected electronically to the system. You can identify these eligible outlets through posters displayed on their store-fronts which are clearly visible to visitors.

If you need help with accounting and tax auditing services for your business, GCC Fillings is the best option. You can totally rely on them for the filing for VAT in the UAE, which in turn, ensures the smooth functioning of your business.

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