Provision of VAT refund for Business visitors in UAE

What is the Provision of VAT refund for Business visitors in Dubai and Abu Dhabi?

UAE has witnessed the successful implementation of VAT. It is new to both the government as well as citizens and its implementation has undergone several amendments. VAT refund is one of the important factors in UAE VAT Law. Since 18th November 2018, FTA has issued several clarifications for claiming VAT Refunds for Business visitors to the UAE.

The business visitors can claim VAT refund on some services but not all countries are eligible for claiming VAT refund. Tourists are eligible for claiming 85% of the VAT incurred, the remaining 15% being the administration charges. They can claim back their VAT refund within 90 days of such purchases or payments made.

Procedure
The refund procedure has to be initiated electronically. Tourists can then claim their tax refunds at the point of exit. Tourists will receive their refunds through a special device placed at the departure airport, port, or border by submitting the tax invoices of 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 or have it transferred to their credit card.

Eligibility for claiming such refunds:
(1) Tourists must be of 18 years old or more.
(2) Has to leave the UAE within three months of purchase along with the goods they have bought.
(3) Goods must be purchased from companies that have signed up to the ‘Tax Refund for Tourists’
(4) Goods are not excluded from the Refund Scheme of the FTA.

Refunds cannot be claim under following situations:
(1) Goods that have been fully, or partly, consumed in the UAE cannot be refunded.
(2) Crew members on flights or planes that are leaving the country are not eligible for VAT refunds.

The list of Countries allowed and not allowed for claiming VAT refunds from GCC/UAE are tabulated below:

VAT refundable- EligibleVAT Refundable- Not Eligible
  • Austria
  • Belgium
  • Bosnia & Herzegovina
  • Canada
  • Denmark
  • Finland
  • France
  • Iceland
  • Ireland
  • Luxembourg
  • Macedonia
  • Malta
  • Netherlands
  • Montenegro
  • Norway
  • Sweden
  • Switzerland
  • UK
  • Bulgaria
  • Croatia
  • Cyprus
  • Czech Republic
  • Estonia
  • Germany
  • Greece
  • Hungary
  • Italy
  • Latvia
  • Lithuania
  • Poland
  • Portugal
  • Romania
  • Serbia
  • Slovakia
  • Slovenia
  • South Korea
  • Spain

This will boost the economy, as tourist will buy from such retails stores that have been registered under this scheme. It will be benefit for both the supplier and consumer, as the consumer will also be able to claim VAT refunds on their purchases.

For more information on this topic, please visit our Insights Section or Contact Us.

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