On the 19th of November, 2018 The UAE joined the countries returning some tax cash to visitors. The VAT refund scheme came into effect on this date. According to FTA, foreigners on a holiday in Dubai could claim the VAT charged for purchases after this date.
From the time that VAT was implemented retailers have been adding VAT for transactions made by residents and tourists. However, on the 19th of November, 2018, the refund scheme covering some 4,500 retail outlets came into effect.
The VAT refund scheme is a blessing for The UAE and Dubai
Tourists can claim refunds in Dubai, Sharjah, and Abu Dhabi International Airports. The maximum cashback that a tourist can get daily is Dh 10,000. There are a couple of important points to note for VAT refunds. They are:
- An administrative fee of 15%applies to all refunds
- A tag fee of 4.8 % is applicable for each claim
This refund scheme is going to benefit the retail as well as the tourism industries in the Gulf. It is going to encourage travellers to purchase more and will boost up retail sales. The reason is that tourists will pay very competitive prices following the deduction of their refunds. The prices could match the best offered worldwide.
The scheme also places the UAE with select nations letting foreign tourists get VAT refunds.
Tourism is a prime revenue driver in the UAE. In 2017, tourists to Dubai from the world over spent some Dh102 billion.
Dubai has established its place among the top shopping destinations worldwide. It’s retail market expanded to $35 billion in 2017.
Purchase by International tourists at retail stores in Dubai is projected to reach Dh 160 billion by 2021.
This refund is given to travellers who purchase goods from licensed retailers who are listed in the tax refund system. Posters are set up in retail outlets across the UAE and Dubai for the convenience of tourists.
There are some criterions for Non-Resident Tourists to Dubai to avail of this tax refund.
The criteria for availing the tax refund
- Purchases that tourists make within the UAE
- Tourists who’re going to depart the UAE 90 days starting from the date of purchase of the goods
- Qualified purchases that tourists export from the UAE 90 days from the date they were purchased
- Purchases made from retailers listed under the tax refund system
- Goods that aren’t exempted from refund
- Visitors to the UAE who’re 18 years and more
- The total value of purchases including taxes should be Dh 250 and more
How can visitors claim the VAT Tax Refund at the Dubai airport?
Tourists to Dubai who want a VAT tax return for their purchases must keep the tax invoices of the registered stores. They can claim the refund electronically at the Dubai airport.
They must hand the tax invoices over to the system operator. He is the one who will give them the refund.
The system operator will need the tax invoices, passports and the credit cards of tourists for transferring them the money.