ABU DHABI 22 October 2018: The Federal Tax Authority (FTA) has announced that Tax Refund for Tourists Scheme goes into effect on November 18, allowing eligible tourists to request refunds of the Value Added Tax (VAT) incurred on their purchases.
The first phase will see the digital system of the Tax Refund for Tourists Scheme implemented at Abu Dhabi, Dubai and Sharjah International Airports. As of mid-December, the system will be fully operational to include all airports and land and sea ports in the UAE, as stipulated in the Cabinet Decision which aims to strengthen the UAE’s leading position as a major destination on the global tourism map.
The authority explained that tax invoices issued starting from November 18, 2018, will qualify tourists who are eligible for a tax refund to reclaim taxes incurred on their purchases.
More than 4,000 retail outlets across the UAE will be connected electronically to the system – but only the invoices issued by retail outlets registered in the scheme and connected to the system are eligible for a refund. These eligible outlets can be identified with posters displayed on their storefronts and visible to visitors.
“The electronic Tax Refund for Tourists Scheme, which is implemented by the FTA in collaboration with Planet, the global operator of the system, is currently being finalised,” said Khalid Al Bustani, FTA Directr General. “The scheme will be fully operational as per the timeline we set for it and will include integrated electronic programmes and mechanisms for direct connection between retailers and tax refund offices for tourists at airports and land and sea ports.”
At Departure
The FTA explained that the Tax Refund for Tourists Scheme is applied once they leave the UAE, where tourists will receive their refunds through a special device at the departure port (airport, seaport, or border port), by submitting the tax invoices for their purchases from the outlets registered in the Scheme, along with copies of their passport and credit card. Once these documents are submitted, tourists can either recover the VAT in cash in UAE dirhams, or have it transferred to their credit card.
The authority noted that Cabinet Decision No. (41) Of 2018 outlined a clear set of standards for transparency and accuracy in the procedures to refund VAT to tourists visiting the UAE, and who are not residents in the country. It stressed the need for a set of basic conditions to determine that the tourist is eligible for tax refund through the system. These include: The purchases in question must be subject to the Tax Refund for Tourists Scheme; the supplies are bought in the UAE by a tourist coming from abroad; the tourist has the explicit intention at the date of purchase to leave the country within 90 days; and that the tourist takes with him/her the purchases within 3 months from the date of purchase.
In accordance with the Decision, the Tax Refund for Tourists Scheme requires that all the purchases are made from outlets registered in the system.
The FTA said that each retailer fulfilling the requirements may register in the scheme. If tourists express their desire to these registered retailers to make purchases with tax refunds, the concerned retailers must submit the required documents to claim the tax refund through the scheme as specified by the FTA, including tax invoices that meet all the legal requirements.
Tourists must then apply for a refund of the tax directly from the operator and provide sufficient and convincing evidence.
