Dubai is ready to host the world with EXPO 2020, the long-vaunted mega-event delayed by a year due to COVID-19. With attendance from more than 190 countries, the organisers are expecting millions of visitors. Even though conceived as a hybrid model (both virtual and physical), the event is likely to bring in more tourists as the vaccine rollout has been successful. Both retailers and the inbound tourists should learn about the UAE Vat Refund Scheme for tourists while making purchases in the country. Considering the expected rise in tourists during the EXPO, VAT consultants in Dubai have made this detailed guide for tax refunds for tourists and retailers.

The tourists should be aware of how they can make a tax refund, and the retailers must know about the requirements of VAT registration in the UAE to clear the air on the scheme. Consulting with tax agents in Dubai will ease the process of Vat Refund for tourists and retailers.

Conditions for Tourists to Avail VAT Refund Scheme in the UAE

A tourist visiting the UAE can apply for a VAT refund scheme subject to the following conditions:

1. The goods should be purchased by the tourist in the UAE
2. Tourists can claim a minimum spend of AED 250
3. The tourist must exit the UAE with the purchased items within 90 days from the date of shopping
4. Tourists will benefit from the UAE VAT Refund scheme only when they shop from registered businesses
5. The tourist must not be below 18 years of age
6. Crew members on flights leaving the UAE are not eligible
7. GCC nationals are allowed to claim tax refunds

Conditions for Retailers to be Part of UAE VAT Refund Scheme

1. The retailer should conduct VAT registration in the UAE with the Federal Tax Authority (FTA) and must have a tax registration number (TRN).
2. The supplier’s sales of goods must not be excluded from the refund scheme, as determined by the FTA
3. The retailer is required to submit a request to participate in the UAE VAT Refund Scheme for Tourists as determined by the FTA
4. The retailer must be committed to submitting VAT Returns in the UAE and should pay due to taxes regularly

Goods Excluded from VAT Refund Scheme in the UAE

The tourists who intend to claim a VAT refund on goods they purchased in the UAE during their stay must understand the type of items that are not eligible for the claim. VAT consultants in Dubai can help the tourists in determining the eligibility criteria for the goods. Generally, the following broad categories of goods are excluded from the UAE VAT refund scheme,

• Goods consumed wholly or partly in the UAE
• Motor vehicles, boats and aircrafts
• Goods that the tourist does not accompany at the time of leaving the UAE

Once the tourists have made the purchases, they can avail themselves of the refunds at all airports, land, and seaports in the UAE. In addition, money exchange houses and top shopping malls such as Dubai Mall offer VAT refund through self-service kiosks. Consult with VAT consultants in Dubai to stay on the right path of the VAT refund scheme.

Steps to Avail VAT Tourist Refund Scheme in the UAE

Tourists who purchase goods from VAT registered businesses in the UAE can claim the refund through specific predefined steps. The steps to claim a VAT refund in the UAE are not too complex, but the tourists need to know how to proceed with it. Communicating with the best VAT consultants in Dubai is an efficient solution to remove the VAT refund scheme’s difficulties. Tourists visiting the UAE can claim the VAT refunds through the following steps,

1. Get a tax-free tag attached to your payment receipt after buying the goods
2. Validate tax-free shopping in the UAE by providing a passport/boarding pass.
3. Choose the preferred refund method – credit/ debit card or cash.
4. Processing of the UAE VAT refund

Tourists are required to validate their Tax-Free Tag within 90 days of the purchase date. For example, a form issued on the 1st of April should be validated by the 29th of June. If the tourist fails to do this, the Tax-Free Tag will expire, and the refund cannot be claimed.

The benefit of UAE VAT Tourist Refund Scheme in Nutshell

Tax agents in Dubai consider the VAT Refund Scheme as a win-win situation for both the tourists and the retailers. The tourist will receive 85% of the total VAT amount paid, minus an admin fee of 4.80 dirhams per Tax-Free tag. For retailers, there are no start-up, subscription or license fees or upfront hardware costs. The retailers will be invoiced monthly for the total VAT, and they can adjust their UAE VAT return to effectively recover the VAT amount refunded. Retailers can consult with FTA-approved VAT consultants in Dubai for VAT registration and VAT return filing purposes.

VAT Refund Scheme and the Role of Tax Agents in Dubai

The UAE VAT Refund for tourists has been a major success since the scheme’s launch in 2018. Tax agents in Dubai believe that the refund scheme will be a blessing for tourists who are likely to visit the EXPO 2020 Dubai in October 2021. The retailers and tourists need to adhere to the FTA’s conditions and requirements to successfully claim the refunds.  Since the retailers must register for VAT in the UAE to become eligible for the scheme, VAT experts’ assistance becomes vital. The best VAT consultants in Dubai, such as Jitendra Chartered Accountants (JCA), can assist the retailers in requirements including VAT registration, VAT return filing etc.