VAT Refund Service in Dubai, UAE
VAT Refund in Dubai, UAE
Dubai is a popular destination for tourists and business travelers alike, offering a variety of attractions, activities, and shopping opportunities. However, many visitors may not be aware that they can claim a refund on the value-added tax (VAT) that they pay on their purchases in Dubai. In this article, we will explain the different types of VAT refunds available in Dubai, the eligibility criteria, the procedures, and the benefits of tax-free shopping in the Emirates.
VAT Refunds for Taxable Persons
A taxable person is an individual or a legal entity that is registered or required to register for VAT purposes in the UAE. A taxable person may be entitled to claim a VAT refund in Dubai if the following conditions are met:
- They must file a VAT return for the tax period and report the VAT due to the FTA.
- They must have input tax that exceeds output tax on the VAT return, resulting in excess refundable tax.
- They must submit an application for a refund of the excess refundable tax to the FTA, either after filing the VAT return or at a later time.
- They must wait for the FTA to review the application and notify them of its decision within 20 business days, or longer if the FTA requires more time.
To claim a VAT refund, the taxable person must fill out and submit a VAT refund form through the FTA’s e-services portal. The FTA will review the claim and issue a decision within 20 business days of submission. If the claim is approved, the FTA will transfer the refund amount to the taxable person’s bank account within 5 business days.
VAT Refunds for Foreign Businesses
A foreign business is a business that is not established in the UAE or any of the GCC states that have implemented VAT. A foreign business may be eligible for a VAT refund in Dubai if the following conditions are met:
The following are the criteria for a foreign business to claim a refund of VAT paid in the UAE:
- The foreign business must not have a place of establishment or fixed establishment in the UAE or any implementing state.
- The foreign business must not be a taxable person in the UAE.
- The foreign business must be conducting business and registered as an establishment with a competent authority in the country of establishment.
- The foreign business must be established in a country that reciprocates VAT refunds to UAE entities in similar circumstances.
- The refund claim period is 12 calendar months, except for foreign businesses that are resident in a GCC state that is not an implementing state.
- The minimum amount of VAT to be claimed for a refund must be AED 2,000.
- The foreign business must provide valid tax invoices that show the correct TRN of the supplier. Invalid tax invoices will be rejected.
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VAT Refund for Tourists
A tourist is a person who is not a resident of the UAE or any of the GCC states that have implemented VAT, and who is not a crew member of a flight or aircraft leaving the UAE. A tourist can claim a refund on the VAT paid on their purchases in Dubai, subject to the following conditions:
- The tourist must purchase the goods from a retailer who is participating in the Tax Refund for Tourists Scheme, which is operated by Planet, the exclusive service provider for the FTA.
- The tourist must spend a minimum of AED 250 on eligible goods at a single retailer.
- The tourist must request a tax-free purchase at the point of sale and provide a valid passport and credit card for verification.
- The refund policy does not apply to any goods that have been consumed or partially used within the UAE, or that are not in the possession of the tourist at the time of departure. The tourist must exit the country no later than 90 days from the date of purchase and refund of the goods.
- The tourist must validate the tax-free purchase at the port of departure, either by using the self-service kiosks or by presenting the documents and the goods to the Planet staff.
- The tourist must collect the refund amount either in cash (in UAE dirhams) or by credit card, after deducting a small service fee.
The VAT refund scheme for tourists is available at all major airports, seaports, and land ports in the UAE. The scheme allows tourists to enjoy tax-free shopping across the country and save money on their purchases.
VAT Refund for UAE Nationals Building New Residences
A UAE national is a person who holds a UAE passport and a UAE national identity card. A UAE national can claim a VAT refund in Dubai for the VAT paid on the construction of a new residence, which will be used exclusively by the person or their family. The following conditions must be met by the applicant who wishes to claim a refund of the tax paid on the construction of a new residence:
- The applicant must be a citizen of the United Arab Emirates and possess a valid Family Book.
- The building must be newly constructed and intended for the exclusive use as a residence by the applicant or the applicant’s family members.
- The refund claim must be submitted within 12 months from the date of completion of the new residence, which is usually the date indicated on the building completion certificate.
- If the building for which the tax refund was granted was not used solely as a residence by the applicant or the applicant’s family members, the applicant will be obliged to repay the refunded tax to the Federal Tax Authority.
VAT Refunds for Foreign Governments, International Organizations, and Diplomatic Bodies
A foreign government, an international organization, or a diplomatic body may be entitled to a VAT refund in Dubai for the VAT paid on certain supplies and imports that are related to their official activities or functions in the UAE. The VAT refund is subject to the following conditions:
- The applicant must be an accredited foreign mission or a diplomat in the UAE, you may be eligible for a VAT refund under certain conditions. These are:
- The Applicant must have a valid TRN and you are registered for VAT. You can apply for a refund yourself or through your Tax Agent or Legal Representative. However, only you can manage your account, not your agent.
- The Applicant shall not be a UAE national and you do not have a visa sponsored by any entity other than your foreign government, international organization, diplomatic body, or mission.
- The Applicant does not conduct any business activities in the UAE.
- The Applicant is recognized by MOFAIC as a diplomatic or consular representative of your home country in the UAE and you operate according to the relevant bilateral international agreements with the UAE.
- The Applicant must be listed as an accredited foreign mission or a diplomat by MOFAIC.
- Once the claim is approved, the FTA will aim to issue the refund within 10 business days.
The VAT refund scheme for foreign governments, international organizations, and diplomatic bodies is based on the principle of reciprocity and the agreements signed between the UAE and the respective countries or organizations.
Who is Eligible vs. Not Eligible for VAT Refund in Dubai
| Eligible for VAT Refund | Not Eligible for VAT Refund |
|---|---|
| VAT-registered businesses with a valid TRN | Businesses not registered under the UAE VAT law. |
| Tourists shopping at FTA-approved retailers | Tourists shopping from non-approved outlets |
| Embassies, consulates & international organizations | Businesses with unpaid VAT penalties |
| Businesses with excess input tax | Applicants with incomplete or incorrect documents |
Timelines for VAT Refunds Dubai
- Travelers: Instant reimbursements via the FTA’s electronic system at UAE airports.
- Businesses: Upon approval, refunds are typically processed in 20 business days.
Useful Advice to Prevent Rejections of VAT Refund in Dubai
Here are some pointers to help you avoid being denied a VAT refund in the United Arab Emirates.
- Verify that supplier TRNs and details are included in VAT-compliant invoices.
- In accordance with FTA deadlines, promptly submit refund claims.
- For speedy verification, arrange all supporting documentation.
- Before filing, settle any outstanding fines or late returns.
Read more- Tourists should shop only from FTA-approved outlets to qualify for claiming VAT refund at the approved portals.
At Farahat & Co., our VAT experts guide businesses and individuals through every step of the VAT refund process in Dubai. With the right documentation and compliance, you can maximize your chances of a successful refund without delays.
Why Clients Choose Us
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We’re comprised of a professional and experienced team of VAT specialists. In short, the firm helps ensure that the business that trusts us gets assigned to a team that is well-versed with all the newest updates on UAE’s VAT legislation which constantly changes. Further, the firm schedules regular extensive training programs for its employees to make sure that all staff members are skilled and reliable in maximizing a business’ VAT refund entitlements.
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similarly, our team helps ensure that the claims of our clients are all fully compliant with applicable requirements and regulations about VAT in the UAE.
We know you have a lot of questions related to VAT refunds in the UAE. Call us today to book a consultation!
