The United Arab Emirates (UAE)’s introduction of the new tax system to the country does not only affect the residents but even the tourists who only come for leisure and visitation. It is not only the people in the country who are finding it quite confusing and altogether puzzling on how to deal with the new tax system but the UAE government has been doing the best they can, as per usual, to accommodate people and ensure that they are all comfortable with handling this kind of new matter.
What is a Vat Refund?
Basically, a tax refund is the money paid back to an individual when the amount paid is more than the tax needed to be paid.
It is, therefore, an excess amount. The government is simply returning it to the tourists. And these people can request it with the conditions listed below.
A Vat refund is not just known in the UAE but also in almost every part of the world where a tax system is something that is followed and upheld with integrity.
The government has chosen to do this to show that they do care about the tourists and value them because of what they bring to the country.
Tourism in the UAE
The UAE is one of the tourist spots in the world, and a lot of people visit the country because of the number of things that it offers. As the years go by, the UAE has continuously become a household name in the world as one of the countries with interesting places to offer. Aside from this, it is not also that difficult to get a hold of visas and whatnot for them to enter the country. Once here, there are a lot of choices to choose from to enjoy even just a week or a couple more as a getaway.
Tourism has helped the UAE in ways that are needed. It is one of the revenue-generating matter that the government uses to diversify its revenue sources. Tourism is one of the reasons that the country is not leaning on oil reserves and the other reason is the newly implemented tax system that is expected to bring in huge money on the table for budgeting for the country.
Proving that tourism has greatly affected the UAE positively, it has an AED 68.5 billion direct contribution to the Gross Domestic Product (GDP) of the country. It holds 5.2 per cent of the UAE’s total GDP. It is also expected to rise even more in the future, bringing in as much as AED 116.1 billion. That means that the government is looking for it to hold 5.4 per cent of the country’s total GDP in the year 2027.
The places and tourist spots, such as Dubai Parks and Resorts, IMG Worlds of Adventure, City Walk, malls, and other activities and places that take place every month in the country are greatly pushing the tourists to get a visit in the country. In turn, this has resulted in an increase in GDP of the country.
More and more projects are said to be coming underway and are expected to attract more people. The driving force that new leisure projects are going to make can ensure the increase in GDP of the country. The government is taking advantage of the strategic location of the country because it is accessible by road and plane altogether.
All About the Tax Refunds on Tourists
The Federal Tax Authority (FTA) is finalizing the tax refunds on tourist. They can expect to claim the tax that was added to what they have purchased while they were in the country.
The tourists that are only entitled to this are those who do not come from the countries that belong to the Gulf Cooperation Council (GCC).
Also, the conditions that should be met by the tourists and will be reviewed by the government are as follows:
- The tourists should have the goods as they are in the country at the time of purchase
- The tourists should have the intention to leave within 90 days of purchase
- The tourists should not be from any country included in the GCC
Farahat & Co. is one of the leading VAT consultants in Dubai and any part of the UAE. We are well-versed when it comes to VAT in UAE and anything that you need to know about it. We can ensure that you are compliant with the law.
Since it’s not easy to deal with VAT, we can make it easy for you. Our tax agent can be sure of providing the information you need and letting you know of your duties and responsibilities as a taxpayer and help you do them. We only offer quality services and if that is what you need, you can contact us and book a consultation today.