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VAT Refunds in the UAE: What tourists are entitled to

VAT refunds for visitors to the UAE, explained

by Hotelier Staff
VAT refunds in the UAE

The UAE implemented the Value Added Tax (VAT) of 5 percent in January 2018. To cater to tourists, the Federal Tax Authority (FTA) introduced a 100 percent digital tax-free shopping service in the last quarter of 2018.

This service allows eligible tourists to request a refund on the VAT incurred on their purchases, provided they meet certain conditions and validate their purchases at the point of exit.

Tax-free shopping refers to the purchasing of taxable goods in the UAE that will be exported. To avail VAT refunds, tourists must meet the following criteria. Refunds can be claimed within one year from the date of export validation for purchases that have already been validated.

The exclusive operator of the VAT refund system for tourists in the UAE is Planet, as executed by the FTA. Many popular stores are registered with the scheme, and tourists can secure their refund upon departure, whether by land, sea, or air.

To shop tax-free, tourists should follow these steps:

  1. At the store, request a tax-free purchase, which is valid for a minimum expenditure of AED 250.
  2. Present a valid travel document to be scanned on the payment system.
  3. The shop assistant will capture your information using the Planet system.
  4. The shop assistant will attach a ‘tax-free’ tag to the back of the sales receipt.
  5. A digital tax-free form will be created.
  6. Within 90 days of the purchase date, validate the transaction at the airport.

Certain conditions must be met for tourists to claim their VAT refunds:

  1. Refunds do not apply to items that have been fully or partly consumed within the UAE.
  2. Goods must be in the possession of the tourist when leaving the country.

In addition, the following conditions apply:

  1. The tourist must be at least 18 years old.
  2. Goods must be purchased from a retailer participating in the ‘Tax Refund for Tourists’ scheme.
  3. Goods must not be excluded from the FTA’s refund scheme.
  4. The tourist must physically present the tax invoice, ‘tax-free’ tags, and relevant goods.

Tourists can collect their VAT refunds at the departure port, which can be an airport, seaport, or border port. They need to submit the following documents:

  1. Tax invoices for purchases made from outlets registered in the refund scheme.
  2. Copies of their passport.
  3. Copies of their credit card.

Once these documents are submitted, tourists can choose to receive the VAT refund either in cash in UAE dirhams or have it refunded to their credit card.

To facilitate the VAT reimbursement process upon departure from the UAE, tourists can utilise the eService provided by the FTA in cooperation with Planet.

Tourists will receive 85 percent of the total VAT amount paid, after deducting a fee of AED 4.80 per tax-free tag.