UAE Tax-Refund Scheme for Tourist – What you need to know?

The UAE’s, “Tax-Refund Scheme for Tourists”, allows all tourists to get a Tax refund right from the airport or any point of exit in the UAE.

This Tax Refund scheme was initially introduced on September 22, 2018, by the Federal Tax Authority (FTA).

To register to Tax Refund Scheme or know who qualifies to avail the tourist Tax Refund, here are the important requirements and qualifiers for Shops & Tourists:

Requirements to Register for Tax Refund Scheme for Retailers

The valid trade license certificate
Tax registration number (TRN)

Supplier’s sales of goods must not be excluded from the refund scheme
The retailer must file Tax Returns and be pay due taxes regularly and on time
The retailer must complete the requirements and registration process

Additional VAT Return Filing Requirements

The retailer will update their VAT return form 201, under box #2 “Tax Refund provided to Tourist under Tax Refund for Tourist Scheme”, to report the refunded amount.

To know more about proper tax reporting and filling

Tourists are eligible for 5% Tax Refund for purchases they make in the UAE.

How to avail Tax Refund for Tourist?

The tourist must purchase from a retailer who is registered for “Tax Refund Scheme for Tourist”.
The tourist must present a valid passport upon request of Tax refund for every purchase.
The purchase must be done inside the UAE and 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 shopping.
The tourist must keep all receipts with a Tax-Free tag on the back of the receipt and must validate the transaction at the point of exit during departure ( airport).
Finally, present your receipts or tax invoice with “Tax-free Tag”, credit cards you used to make the purchase, and passport at the validation point to confirm your refunds. You will be refunded through your credit card or cash.

UAE Tax Refund for Tourist is innovative and fast. All tourists who had purchased in ports of entry and exit anyway from around the UAE are eligible for the tax refund except for the following conditions.

Goods that are partially or fully consumed in the UAE are not eligible.
The tourists must bring the goods upon leaving the Emirates.
Motor vehicles, boats, and aircraft are not qualified for Tax Refund Scheme for Tourist.
Crew members of flight or aircraft and all the GCC residents are not eligible for Tourist Tax Refund.

Read Update: VAT in UAE: Tourists Can Now Process VAT Refunds in shopping Malls, Hotels

Tax Refund for Tourist Scheme – Procedure Summary

Customers must purchase to “Tax Refund for Tourist Scheme” registered retailer, and will present a valid passport during purchase.
Registered retailers will make an entry of the tourist’s information to the system and will provide “Tax-free Tag” on the back of the receipt.
A digital Tax-Free form is created on the system on behalf of the customer
Finally, the customer will go to Validation Point to validate tax refund by presenting “Tax-free Tag” receipts, purchased goods, passport, and credit cards.

More events are coming up to gather all retailers from all parts of the country to provide ample information about the “Tax Refund for Tourist Scheme”.

His Excellency Khalid Ali Al Bustani, the Federal Tax Authority Director-General, described this Tax Scheme as “one of the most advanced of its kind in the world” and mentioned the enthusiasm among business owners to register for this new nationwide tax program. This program connecting all transaction portals in all parts of the country to all exit points for customers to have easy access to, and retrieve their Tax refund smoothly. This is indeed the most advanced and first in the world. It is the fastest system and the most convenient way for tourists to file and receive their Tax refunds.

This initiative portrays a constant innovation, nationwide cooperation, and competitive character of the UAE as the leading tourist destination in the GCC. It absolutely adds value to its tourism industry and an additional advancement in preparation for the Expo 2020. This project is expected to bring more niche markets, tradeshows, events, and visitors, as well as increase purchases from tourist shoppers nationwide.

Retailers are enticed to register for this tax refund campaign as an added market perk for tourist shoppers. Registered shops will likely get more customers than other shops who do not offer this privilege. This VAT Refund for Tourists will be launched this 18 November 2018.

Are you a retailer looking to Vat registration or vat return filing services? Contact us now for the consultation.