- New Rule on VAT Refund for Tourists in the UAE Comes into Force

New Rule on VAT Refund for Tourists in the UAE Comes into Force

Vat Refund

This week it was reported that the Government of the UAE introduces a new system of VAT tax refund for tourists. It is assumed that the new system will organize the operations of market outlets and tax refund counter in order to maximize the effect of the Government's efforts to effectively implement the tax system.

According to the current decision, a single standard of the procedure is established to ensure the transparency and accuracy of the refunding system, the FTA’s statement said.

It is assumed that the new system will be fully operational during 2018. The basis of the new system is the new digital technology, with the help of which the direct connection of sale points and tax refund points is established, as well as connection with all ports and stations of the UAE. Such a system will greatly facilitate the work of a global operator and will allow for effective interaction between retail outlets and will facilitate the process of filing a request for a tax refund for tourists.

Access to the system will be provided in the most convenient places for foreign tourists. The system will determine the amount for reimbursement and let you choose a convenient method of a tax refund.

In case a tourist intends to purchase from a registered supplier and then return the VAT, the registered seller will provide all necessary documents for filling, including a tax invoice. After that, a tourist provides the information to the system operator and chooses the convenient method of tax refund: cash or a bank account.

Here are the main conditions for VAT refund for a tourist through a new system:

  • The goods, the cost of which is supposed to be VAT recovered, must be sold on the territory of the UAE.
  • A tourist should stay in the country for not more than 90 days (that is, this must be a tourist, not a foreigner with a residence visa).
  • The goods must leave the country no later than in 3 months from the date of delivery.
  • You can claim the tax refund only when you purchase the goods from a registered seller.
  • Refunds are only possible if the requirements for the purchase of goods defined by the FTA are met.
  • It is important to remember that the goods should not be on the list of goods excluded from the process of VAT refund.

We recall that on January 1, 2018, in the UAE introduced a VAT of 5% on most goods and services in the country.