UAE Introduces Tourist Refund Scheme on Goods Purchased

FTA Approves VAT Refund Scheme for Tourists in UAE

UAE has over the last decade gained widespread recognition as one of the most popular tourist hubs in the world. Its city of Dubai is every shopper’s delight and on top of every global tourist’s list.

And there is more good news for shopaholics as the Arab Emirates is on its course to set all limits and restrictions on tourists’ VAT refund to zero. Reportedly, the UAE had introduced VAT on January 1, 2018. The provision for limitless tourist vat refund UAE has come into effect from Sunday, November 18.

Planet, an International payment service provider, will be a global operator of the refund system. on behalf of UAE’s Federal Tax Authority (FTA).

What is the tourist refund scheme?

The tourist refund scheme is a part of VAT reform in the UAE under which the ‘overseas tourist’ is allowed to claim a refund of the VAT paid by them on the purchases they incurred during the visit of UAE. Any type of taxes or (VAT) born by ‘overseas tourists’ on purchases made in UAE, a refund will be provided to them.

Who is an ‘overseas tourist’?

Here, an overseas tourist means an individual who is not the citizen of any of the GCC VAT implementing State as well as who is not a crew member of flight or aircraft any of the GCC country in implementing State. So, tourists from a GCC country.

Here are a few highlights of the UAE VAT refund scheme for tourists:

  • Tourist will get 85% of the total VAT claims. The remaining 15% will go to Planet as administration fees.
  • For cash related refunds, the VAT UAE Tourists will be allowed Dh10,000 in cash. Post this, part of the remaining refunds will be transferred electronically to tourists.
  • The remaining amount will be transferred to a bank account, debit or credit cards.
  • 4500 companies have so far registered under the UAE VAT refund scheme. Planet expects this number to shoot up to 6000 by end of this year and reach 10,000 by early next year.

Out of the total companies registered under the scheme, most are from electronics, gold traders, general traders, souks.

The Malls and Retail Groups

As part of the preparation, the UAE government has already engaged at levels to bring malls, retail groups, and others on board. All malls and retail groups have agreed for a refund. Most of the VAT refunds will in all likelihood be made on gold jewellery, electronics, and luxury goods.

Note that Minimum retail purchase liable for VAT refund claims is Dh250

For VAT claim Eligibility retailers must:

  • Comply with credit check and timely settle all tax payments
  • Submit VAT returns corresponding the claims.

Terms and Conditions

For claiming VAT refunds in the UAE, tourists have to fulfill all the conditions that are mentioned below:

  • Tourist is Entitled to Purchase Goods from a retailer who has been registered in the Tax Refund for Tourists Scheme(PDF)
  • Goods Purchased must not be exempted from the Refund Scheme of the Federal Tax Authority
  • Tourists have to export the purchase goods out from the UAE within three months from the date of supply
  • The tourist must have an explicit intention to leave UAE in 90 days from the date of supply, along with the purchased supplies
  • Tourist is entitled to follow the requirements and procedure of the Federal Tax Authority while purchasing and exporting the goods.

The Impact of Refund Scheme

UAE enjoys global repute as a shopping destination and the VAT refund Scheme will further strengthen this scheme. The scheme covers many if not all goods sought by tourists. This will boost sales and keep the tourists a little longer than usual on the UAE soil. This will UAE doors welcome for tourists. Inbound tourism to Dubai and the UAE is expected to shoot up by fractions due to the foresightedness of the government officials.

The FTA declare UAE’s 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.

The decision was taken during the fifth meeting of the FTA which was held this Wednesday. The authority also said that the number of VAT registered businesses has increased to 281,00 while stats for excise tax registration stand at 637, as per latest data. Read More

VAT Refund Dubai – How To Claim Vat Refund In UAE

VAT Refund Dubai, UAE

Are you looking for how to claim VAT refund in Dubai and across the UAE?

In this post, you will get all information about how to get VAT refund, who can claim for refund and process to claim VAT refund.

It is necessary for all the registered business to file a VAT return providing the details of sales, buy input and output VAT paid during the time of tax. The money collected on sales is output VAT and the money awarded to the supplier to expenses/purchases is Input VAT.

The qualified input VAT amount can be balanced with the output VAT amount. Following is the situation that will result in after balancing the input VAT and output VAT:

VAT Payable: If the input VAT is lesser than the output VAT amount, then the remaining balance is termed VAT payable and required to be paid to the FTA.

VAT Refundable: If input VAT amount is higher than the output VAT then the extra amount will be VAT refundable.

On new years eve 2018, UAE/Dubai, member of the GCC council, took a great leap and introduced the Value Added Tax(VAT). Prompted by the constant fall in oil prices over the last three years, the new VAT tax aims to generate additional revenues that would contribute 1-2 % of total GDP. Read More