TAX Refund for Tourist is Here!

The UAE Tax Refund Scheme for Tourists: Everything You Need to Know

The UAE has established itself as one of the world’s most visited tourist destinations, and its approach to VAT reflects a genuine commitment to making the country as welcoming and accessible as possible for international visitors. On 22 September 2018, the Federal Tax Authority (FTA) introduced the Tax Refund Scheme for Tourists — a nationwide programme that allows eligible visitors to reclaim the 5% VAT paid on qualifying purchases made during their stay in the UAE.

Tourists can claim their refund at the airport or at any designated point of exit across the country, making the process both accessible and convenient. The scheme connects all transaction portals across the UAE directly to exit points — ensuring that tourists who have shopped anywhere in the country can retrieve their refund seamlessly when they leave.

This article covers everything tourists and retailers need to know about the scheme — including eligibility, the step-by-step process, what goods qualify, and what is excluded.

What Makes This Scheme Significant?

His Excellency Khalid Ali Al Bustani, FTA Director-General at the time of the scheme’s introduction, described it as “one of the most advanced of its kind in the world.” The enthusiasm among business owners to register for the programme was notable from the outset.

The scheme was designed to connect all transaction portals across the UAE to all exit points — making it the fastest and most convenient system available for tourists to file and receive their VAT refunds. It represents the UAE’s ongoing commitment to innovation, nationwide cooperation, and maintaining its competitive position as the leading tourist destination in the GCC.

The initiative was also expected to bring broader economic benefits — attracting more niche markets, trade shows, events, and visitors, and stimulating increased purchases from tourist shoppers nationwide.

Who Is Eligible for the Tourist Tax Refund?

The scheme is open to all tourists who have made purchases from registered retailers inside the UAE — with the exception of the following:

• GCC residents are not eligible for the tourist tax refund
• Crew members of flights or aircraft are not eligible
• Tourists whose purchased goods have been partially or fully consumed within the UAE cannot claim a refund on those items
• Motor vehicles, boats, and aircraft do not qualify under the scheme

All other tourists who have purchased qualifying goods from registered retailers and are departing the UAE are eligible to submit a refund claim.

Requirements for Retailers to Register for the Scheme

For a tourist to be eligible to claim a VAT refund on their purchases, the shop they purchased from must be registered under the Tax Refund Scheme for Tourists. Retailers who wish to register must meet the following requirements:

• Hold a valid trade licence certificate
• Have a valid Tax Registration Number (TRN)
• Ensure that their sales of goods are not excluded from the refund scheme
• File VAT returns and pay all due taxes regularly and on time
• Complete the full requirements and registration process with the FTA

Once registered, retailers are required to update their VAT Return Form 201, specifically under Box 2: “Tax Refund Provided to Tourists Under VAT Refund for Tourist Scheme”, to accurately report the refunded amount in their periodic VAT returns.

Benefits for Retailers of Joining the Scheme

Registration in the tourist tax refund scheme is not merely a compliance exercise — it is a commercial advantage. Registered retailers are positioned as preferred shopping destinations for international visitors who wish to take advantage of the 5% VAT refund on their purchases. Tourists who are aware of the scheme will actively seek out registered shops, meaning that retailers who participate are likely to attract more customers than those who do not.

In a competitive retail environment, offering tourists the ability to shop tax-free is a meaningful added value that directly supports sales.

How Tourists Can Claim Their VAT Refund: Step-by-Step

The process for claiming a tourist VAT refund is straightforward and is managed through a digital system that links the point of purchase to the point of exit.

Step 1: Purchase from a Registered Retailer

The tourist must make their purchase from a retailer that is registered under the Tax Refund Scheme for Tourists. The tourist should present a valid passport at the time of purchase.

Step 2: Retailer Records the Transaction

The registered retailer enters the tourist’s information into the system and attaches a Tax-Free Tag to the back of the receipt. A digital Tax-Free form is simultaneously created on the system on the tourist’s behalf.

Step 3: Retain All Receipts and Tags

The tourist must keep all receipts that carry the Tax-Free Tag. These will be required at the point of departure to validate the refund claim.

Step 4: Validate at the Point of Exit

When departing the UAE — at the airport or any designated exit point — the tourist must proceed to the Validation Point and present:

• All receipts with the Tax-Free Tag
• The purchased goods (which must be brought out of the UAE)
• Their valid passport
• The credit card(s) used to make the purchases

Step 5: Receive the Refund

Once the transaction is validated, the refund will be processed and returned to the tourist either via their credit card or in cash.

Key Conditions Tourists Must Meet

For a refund claim to be valid, all of the following conditions must be satisfied:

• The purchase must have been made inside the UAE from a registered retailer
• The purchase must be validated within a 90-day period at the point of exit
• The tourist must exit the UAE within 90 days from the date of the purchase
• The goods must be brought out of the UAE — items that have been partially or fully consumed within the country are not eligible
• Motor vehicles, boats, and aircraft do not qualify under the scheme

What Goods Are and Are Not Eligible?

Eligible: Most goods purchased from registered retailers inside the UAE qualify for a 5% VAT refund, provided they are taken out of the country and the conditions above are met.

Not Eligible:

• Goods that have been partially or fully consumed within the UAE
• Motor vehicles
• Boats
• Aircraft

A Summary for Quick Reference

How Farahat & Co. Can Help

Whether you are a retailer looking to register for the VAT Refund for Tourist Scheme, seeking assistance with VAT return filing, or looking for guidance on any aspect of UAE VAT compliance, Farahat & Co. is ready to assist.

As a regulated Tax Agent in Dubai, UAE, with 35 years of experience, our team of VAT experts and consultants can guide you through every step of the process — from registration to reporting — ensuring you remain fully compliant and positioned to take full advantage of the scheme.

Contact us today to book a free consultation.