The United Arab Emirates (UAE) introduced Value Added Tax (VAT) at a rate of 5% on January 1, 2018. While residents and businesses have adapted to this tax regime, the UAE has also taken measures to remain a global tourism hub. One such measure is the VAT refund scheme for tourists. This allows eligible visitors to claim back VAT paid on purchases made during their stay in the country.
This blog will provide a comprehensive understanding of how and when tourists can claim VAT refunds in the UAE, what purchases qualify, and how the refund process works. Whether you are a visitor or a business catering to international travelers, it is essential to understand the mechanics of the system.
Understanding the Tourist VAT Refund Scheme
The UAE’s Federal Tax Authority (FTA), in collaboration with the international operator Planet, launched the Tourist Refund Scheme to allow non-resident tourists to reclaim VAT paid on goods purchased from participating retailers. The goal is to promote tourism while ensuring fairness in the tax system.
Who Is Eligible for a VAT Refund?
To be eligible for a VAT refund in the UAE, the individual must meet the following conditions:
- They must be a non-resident of the UAE.
- The purchase must be made from a retailer participating in the Tourist Refund Scheme.
- The purchased goods must be exported from the UAE within 90 days from the date of purchase.
- The tourist must present the goods, invoice, and passport/boarding pass at the refund point.
What Items Qualify for Refund?
Not all purchases made by tourists are eligible for a VAT refund. The refund applies only to goods that meet specific criteria:
- Goods must be bought from a retailer registered under the Tourist Refund Scheme.
- Items must be intended for personal use and export.
- The value of each invoice (inclusive of VAT) must exceed AED 250.
- Services (like hotel stays, entertainment, or dining) are not eligible for VAT refunds.
How to Claim a VAT Refund as a Tourist
The process to claim a VAT refund is simple and efficient, thanks to electronic kiosks at major UAE exit points such as airports, seaports, and border crossings. Here’s how it works:
- Make a purchase from a participating retailer and request a VAT refund receipt.
- Keep the physical goods, invoice, and VAT refund slip.
- At the airport, proceed to the Planet VAT refund kiosk before check-in.
- Scan your passport and boarding pass at the kiosk.
- Submit your receipts and present your goods for verification if requested.
- Choose your preferred refund method – cash (up to AED 7,000) or credit card.
Important Deadlines and Limits
- Goods must be exported within 90 days from the date of purchase.
- Refunds must be claimed within 6 months of the purchase date.
- Each tourist can receive a cash refund of up to AED 7,000 per day; higher amounts must be transferred via credit card.
Promoting Compliance for Retailers
Retailers looking to join the Tourist Refund Scheme must be VAT-registered and apply through the FTA’s platform to partner with the scheme operator (Planet). Proper signage must be displayed at the retail outlet to indicate participation in the scheme.
PEAK Business Consultancy Services: Your Partner in VAT Compliance
PEAK Business Consultancy Services is a leading VAT and corporate tax consulting firm based in the UAE. We assist businesses, especially retailers, in complying with VAT laws and successfully registering for initiatives such as the Tourist Refund Scheme.
Our VAT services include:
- VAT registration and advisory
- Retail VAT compliance audits
- Onboarding for the Tourist Refund Scheme
- FTA filing and return submission
- Tax planning and accounting support
Visit PEAK Business Consultancy Services to learn how we can support your VAT obligations and help your retail business thrive in a tourist-driven economy.
Exceptions and Non-Refundable Items
VAT refunds are not applicable to:
- Used or partially consumed goods
- Goods not accompanying the tourist on departure
- Vehicles, boats, and aircraft
- Goods purchased for commercial purposes
It’s also important to note that tourists using the same purchase for both refund and warranty claim purposes may encounter difficulties during verification.
What Happens If a Refund Is Rejected?
If the system or the kiosk operator rejects your refund request, you may not receive your VAT back. Common reasons include:
- Missing or incomplete documentation
- Ineligible goods or services
- Failure to export goods within 90 days
- Goods not available for inspection at departure
Tourists are advised to read all instructions carefully and keep all documents secure until the refund is completed.
Conclusion
The UAE VAT refund scheme for tourists is a progressive step towards attracting global travelers while maintaining a robust tax ecosystem. Tourists can shop with confidence knowing they can reclaim VAT on eligible purchases, while retailers benefit from increased footfall and compliance incentives.
To maximize benefits from this system, businesses must ensure proper registration and adherence to the FTA’s guidelines.
Need help registering for VAT or the Tourist Refund Scheme? PEAK Business Consultancy Services is your trusted partner in UAE VAT compliance.
Click here to contact PEAK BCS for end-to-end support and expert guidance.
