According to a recent news, the UAE Cabinet has allowed VAT refund for tourists in the UAE. Under the scheme, those people visiting the UAE, especially Dubai, for tourism purpose can avail a refund of VAT paid on the purchases made by them during the visit. In this article, you will find details of how to furnish the information of tourist tax refund while filing VAT return.
The VAT refund to foreign tourists in the UAE is subject to certain conditions, as explained below.
Eligibility Conditions for VAT Refund to Tourists in UAE
An overseas (foreign) tourist is any person who doesn’t reside in any of the UAE States and is not a member of any flight, aircraft or any other overseas courier operating in an implementing State.
To be eligible for VAT refund, the goods must have been sold to an overseas tourist who is in the country while making the purchase of the said goods from a UAE based supplier.
The tourist must intend to leave the State (UAE) within 90 days from the date of supply/purchase, along with the goods purchased.
The goods purchased by the overseas tourists in the UAE must be exported/used to a place outside the territory of the implementing STates within 3 months from the purchase date. This may be verified by the Authority.
Tax Refund for Tourists Scheme Details in VAT Return 201
In VAT Return 201 form, there is a sub-section called ‘Tax Refunds provided to tourists under the tax refunds for Tourists Scheme’ under the head ‘VAT on Sales and All Other Outputs’. The details of any refunds of VAT provided to tourists by the taxpayer will have to be furnished in this row.
Only the registered taxpayers who have enrolled under the tourists refund scheme are eligible for this.
The section has three columns – Amount (AED), VAT Amount (AED), and Adjustment (AED).
The actual amount of supply (without VAT amount) will be mentioned in the first column. Enter the VAT amount in the second column. If there is any pending transaction or an adjustment to make, mention in the third column.
As you can see, there is a minus (-) sign with each field. This means that the VAT refund amount will be deducted from your total tax liability. It will reduce the amount of output tax you need to pay.
This section is not applicable for those businesses who are not enrolled under the tourist refund scheme.
Note: The Amounts must be entered only in AED. Those who are not eligible for this scheme, need to enter 0 (Nil) values in the columns.