VAT Tax Refunds in UAE

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VAT Tax Refunds in UAE

In November 2018, the UAE government, in collaboration with the Federal Tax Authority (FTA), officially enabled eligible tourists to request refunds on VAT (Valued Added Tax) for the purchases during their stay in the country. The process is possible through an integrated electronic system which was introduced following the UAE’s implementation of a 5% VAT charge on purchases. Additionally, only retailers that are registered in the “Tax Refund for Tourists Scheme” and connected to the system are eligible for refunds. How does a vat refund for tourists in UAE work? How can travelers to the UAE claim back the VAT charged to their purchases? Let’s find out.

Any tourist shopping in stores located in the United Arab Emirates is eligible to reclaim a refund made on purchases provided that he or she fulfils certain conditions. These are as follows:

Tourists who plan to apply for refunds must ensure that their purchases are from retailers that are participants in the “Tax Refund for Tourists Scheme”
The tourist in question must have the intention of leaving the UAE within ninety days from the day of purchase along with the products that were bought
Goods purchased must not be excluded from the FTA’s Refund Scheme
Purchased products must be exported out of the United Arab Emirates starting from the day of supply
Export and process of purchase of products must be implemented according to requirements set forth by the Federal Tax Authority (FTA)

VAT REFUND SCHEME FO R UAE TOURIST

Planet VAT refund – a fully automated system created due to collaborations between the FTA and global operator Planet, allows registered retailers and shoppers to sail through the VAT refund process with ease. VAT refunds like these are possible thanks to collaborations between the FTA and Planet which is the global operator of the refund system. A fully integrated electronic system from Planet allows registered retailers and visiting shoppers to expedite the Planet VAT refund process with ease. Here is how it goes:

Shopper requests for a VAT refund claim and presents the necessary travel documentation (travel passport or GCC National ID card) used to enter the country
The retailer enters the necessary data on Planet’s electronic system to issue the claim
The retailer will stick a Tax-Free tag on the back of the original sales receipt presented by the shopper
The Tax-Free tag is scanned in order to link the purchase to the shopper’s GCC National ID card or travel passport

It’s that simple. With a minimum spend of AED 250, the fully digital process issues shopper’s a Tax-Free tag within 2 minutes. As of October 2018, around 4,000 retailers in the country were registered in the electronic system —identifiable with posters displayed at storefronts visible to visitors.