Updates on Tax Refunds for Tourists Scheme: A Comprehensive Guide by Profitrack

Effective Dates:

• November 18, 2018: Retailers began providing refund claims.

• November 18, 2018: VAT refunds available at Abu Dhabi, Dubai, and Sharjah International Airports.

• December 16, 2018: VAT refunds extended to other UAE international airports, land, and sea ports.

Latest Amendments

Purchase Procedures for Tourists

When tourists wish to make tax-free purchases, retailers must follow specific procedures:

1. Verification:

   • Confirm the customer is an Overseas Tourist as per Clause 3 of Article 68 of the Cabinet Decision No. 52 of 2017.

   • Ensure the customer is physically present in the store or, in case of online purchases, receives the goods personally.

   • Verify the supply of goods occurred within 90 days from the refund request.

2. Documentation:

   • Record customer details and purchase information.

   • Issue necessary documents for VAT refund upon export.

   • Adhere to prescribed handling, packaging, and delivery procedures.

   • Ensure the customer is over 18 years old.

Export Procedures

The export process is crucial for the refund to be processed:

1. Verification by Operator:

   • The operator must verify the tourist exports the goods within 90 days of purchase.

   • This verification can be conducted by a third party with FTA consent.

Fees and Refund Limits

Tourists are subject to fees and refund limits as follows:

1. Fees:

   • Administrative Fee: 13% of the VAT amount to be refunded.

   • Fixed Fee: AED 4.8 per refund claim.

2. Refund Limits:

   • Maximum cash refund of AED 35,000 per tourist per 24 hours.

Minimum Purchase Value

For a VAT refund to be applicable, the total tax-inclusive purchase value from the same retailer must be at least AED 250.

Exclusions

Certain goods are excluded from the Tax Refunds for Tourists Scheme:

1. Goods not accompanying the tourist when leaving the UAE.

2. Goods partially or fully consumed within the UAE or any other Implementing State.

3. Motor vehicles, boats, and aircraft.

Conclusion

The FTA’s Tax Refunds for Tourists Scheme offers a structured process for tourists to reclaim VAT, enhancing their shopping experience in the UAE. By staying informed about these updates and adhering to the outlined procedures, retailers and tourists can ensure a smooth refund process. This comprehensive guide serves as a valuable resource for understanding the intricacies of the scheme, ensuring compliance and maximizing the benefits for all parties involved.