Are you soon to visit the UAE for some retail therapy and shopping? Well, you surely have some reason to celebrate as the government has implemented the No-limit Tourist VAT Refund across a wide variety of retailers. According to the government initiative, the maximum limit for the tourist VAT refund has been capped at AED 10,000 in cash, and if the refund exceeds this amount, the funds will be electronically transferred to the tourist.

Enjoy unlimited VAT refunds for tourists in the UAE

Gary Byrne, the director of new markets and group strategic partnership at Planet, a business expert solutions company in the UAE, has confirmed that Planet will take on the complete process for tourist VAT refunds in keeping with the UAE’s Federal Tax Authority (FTA). He further affirmed that a growing reception of the new scheme has been observed in recent times, and consequently, the number of companies registering for the scheme is expected to increase significantly in the near future.

Companies across a wide range of sectors are participating enthusiastically, including the likes of electronics, general traders, gold dealers, and souks, amongst others. It is noteworthy that a major share of the VAT refund from tourists is expected to come from purchases of gold jewellery, gadgets, and luxury items. Additionally, Byrns also cited that for a VAT refund to be applicable, consumers have to mandatory accumulate a minimum total purchase amounting to AED 250. The full 5% VAT will not be given since the refund is limited to 85% of the VAT amount that was paid to the retailer, deducting 1% administrative fee of AED 4.80 for every tax-free form. Thanks to the new scheme coming into effect, the inbound tourism to the UAE and Dubai is expected to get a considerable boost.

What the industry insiders opine

According to Khalid Ali Al Bustani, director-general of the FTA, retailers should cross-check credit score, verify them, and repeatedly settle tax funds, besides submitting VAT returns to be eligible for the refunds. He mentioned that if they stop paying taxes and tax returns in the future, the FTA can terminate them from the scheme, and if tourists are leaving after 90 days, they won’t get a refund. Rob Dalla Costa, VAT director at KPMG, expressed that refunds are prone to have a constructive impact on the psyche of vacationers in an attempt to store within the UAE. He further stated that refunds will encompass a wide range of goods sought by tourists, and are in sync with practices in other countries. Till date, innumerable retailers have registered to make the most of the scheme. It has emerged to be a game-changing marketing initiative that can be utilised to the fullest by retailers to push sales and ensure that the UAE remains an attractive shopping destination.

It is being seen as a very positive move in general, and the government is being lauded for implementing the same.

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