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 travellers to the UAE claim back the VAT charged to their purchases? Let’s find out.
How to claim VAT refund in UAE for Tourist?
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 for 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.
Where can Tourists Claim UAE VAT Refunds for Shopped Items?
All claims must be validated at different validation points —special devices placed at departure ports like seaports, border ports and airports in the United Arab Emirates. For example, if you are leaving Dubai as a tourist, the process can be executed at the VAT refund counter at Dubai Airport.
Here is how it works:
- Go to the designated validation point before checking in your luggage
- Approach the immigration counter and present the original receipt with the Tax-Free tag on it, the products purchased, as well as copies of your credit card and passport
- After successful validation, you can choose to refund via cash or card
- The refund is processed
Tourists are eligible to receive 85% of the total VAT amount paid. The remaining 15% is charged as administration fee by Planet. Also, keep in mind, cash refunds are capped at AED 7,000 per day as per new regulations imposed by the Federal Tax Authority. This was done in an attempt to reduce shopper reliance on cash during financial transactions and help them make the most of the country’s technological advancements. No such limit is placed on the maximum recoverable amount if the transactions in question are made to a credit card.
Self Service Kiosks
Thanks to newly launched self-service kiosks at departure points, tourists now have the option of claiming back VAT themselves. Rolled out in airports and other ports, the fully-automated service streamlines the process by identifying tax eligibility for refunds, verifying that the tourist is in possession of the goods and enabling tax recovery.
Of course, employees are always available to provide a helping hand when needed. Currently, these kiosks can be accessed in 12 locations across the UAE including Dubai International Airport, Abu Dhabi International Airport, Al Maktoum International Airport and others.
All Tax-Free tags must be validated within 90 days from the date of purchase. If not done in time, the Tax-Free tags will expire and concerned shoppers will not be eligible for any claims.
Goods Not Eligible for VAT Tourist Refund UAE
All VAT applied goods or products are eligible for a tax refund except those that fall within these categories:
- Aircraft, motor vehicles and boats
- Products that have been consumed partially or fully in the country or in any Implementing State in the GCC
- Goods that tourists don’t have on hand at the time of their departure from the UAE
We recommend leaving enough time to process validations before departure. For example, arrive at the airport an hour or so earlier than flight departure.
VAT Refund for UAE Tourists – who is eligible?
Not every tourist can claim VAT refunds on purchases made in the country. Under current regulations, travelling tourists must fall within these categories to be eligible for Planet VAT refund UAE.
- Travellers aged 18 or over who are not residents of the UAE
- GCC Nationals are allowed to claim VAT refunds
- Not a crew member on flights leaving the United Arab Emirates
Additional regulations may apply to GCC Nationals who reside in foreign countries for studying.
That’s all travellers must know about VAT refund for tourists in UAE. If you plan on travelling to the United Arab Emirates with medication and are unaware of regulations regarding the transport of medicines, our guide for bringing medication to the UAE might be useful. Visiting Abu Dhabi alone? Make sure that you are aware of parking rules in the emirate before you hire a ride. If your destination is Dubai, make sure you are aware of local traffic laws in this city.