How Tourists Can Claim Tax Refund in UAE?
Following the introduction of VAT in UAE, FTA has made the tax refund possible for the tourists with the help of an integrated electronic framework. To make your shopping experience in UAE much enjoyable, the entire process of tax refund is facilitated in a convenient and prompt way which is discussed below in detail.
How does the tax refund scheme for tourists work in UAE?
Tax refund scheme is available when tourists purchase from retailers in UAE who are registered in the tourists tax refund scheme. This facility is administered by the global operator Planet as approved by FTA. The registered retailer shops will be connected to the Planet’s electronic system. While making a purchase, tourists can inform the registered retailer shop attendants about the intention to make a tax refund claim by presenting the travel documentation such as a passport or GCC National ID card.
The retailers will then enter the required data in the Planet’s system and attach a tax-free tag on the invoice issued by them. Tourists shall keep this invoice with them, which is required to be presented while making the claim for tax refund later during their departure from UAE.
Are all tourists eligible for the tax refund on their purchases in UAE?
The regulation is specifying the eligibility criteria for claiming tax refunds by tourists. Non-resident travellers aged 18 or above in UAE are eligible for the tax refund on their purchases. However, crew staff members of the flights leaving from UAE are excluded from the eligible category. It is to be noted that special allowance is available for GCC nationals who can claim for tax refunds on their purchases in UAE.
Are there any goods which are not eligible for a tax refund if purchased by tourists in UAE?
There are some exemptions in claiming the tax refund by tourists even if those goods are purchased by them during their visit to UAE. Following goods are not eligible for tax refund.
- Any mode of transportation such as a motor vehicle, aeroplane or boat
- Goods consumed partially or fully in UAE
- Goods which are not present in hand of the tourist during their departure from UAE
It is important to ensure the eligibility of tax refund beforehand, in case of any purchases which are material
How can a tourist claim tax refund before departure from UAE?
There are designated validation counters for tax refunds in the various departure points of UAE such as airports, seaports or borders. Tourists can approach these validation counters and present the purchased products along with the supporting documents for refund claims such as original invoice with tax-free tag, copies of passport and credit card. Tourists can choose whether the refund to be processed in cash or to the card. Once the validation is completed successfully, the refund will be processed.
What are the other factors to be considered for tax refund claim by the tourists in UAE?
Recoverable amount on the refund will be 85% of the total tax amount paid by the tourists during their purchase. The remaining 15% goes as administration fee which is the system operator for the tourist tax refund scheme in UAE. Also, there is a limit of AED 7,000 for a day if the refund is made through cash. There is no such limit if the tourist opts for the refund to be made to the card. If you are planning for major shopping during your visit to UAE, we suggest you shall be aware of the implications of the tax refund scheme here, so that you can plan your spends accordingly.
CDA Tax Accounting Services
It is always recommended to obtain expert advice when it comes to regulatory matters with respect to the transactions involving tax. CDA has experience of implementing tax accounting and also in supporting the tax-related activities in various entities in UAE.
Also read, The Impact of Tax on Expo 2020 Dubai
CDA can contribute towards the enhancement of different financial processes including tax, accounting and reporting functions in your company. Our tax support services range from the assistance in tax registration to periodic review, accounting and reporting of tax activities. Feel free to reach out to us to discuss further on how we can support your business with our services.
Hope you got a clear idea on tax refund for tourists in UAE. Do you have further queries on tax refund or other tax-related activities in UAE? We at CDA can clarify your concerns and assist you in various tax and accounting areas of your business.