Tourist refunds begin on Sunday
abu dhabi — Overseas tourists to the UAE will be able to avail a refund of the value-added tax (VAT) on their transactions beginning on Sunday, November 18, 2018 at the Abu Dhabi, Dubai, and Sharjah International Airports.
The maximum cash amount that can be refunded to a tourist in a 24hour period is Dh10,000, and the minimum value of purchases subject to the refund is Dh250.
Tourists may also recover the VAT at the other airports and land and sea ports in the UAE as of December 16, 2018.
Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, Minister of Finance, and Chairman of the Board of the Federal Tax Authority (FTA), issued the Decision No. (2) of 2018 on the Tax Refunds for Tourists Scheme, setting out the
Sheikh Hamdan bin Rashid Al Maktoum issued decision on tax refunds. —
Supplied photo implementation dates for phases one and two, the procedures for the verification of tourists’ eligibility for the tax refund, the fees charged for refunds and their application, the maximum cash recovery, the minimum value of purchases subject to the refund, and the goods excluded from the refund.
The Decision No. (2) of 2018 comprises of seven clauses and stipulates that Value Added Tax (VAT) refund claims shall be provided by retailers participating in the Tax Refunds for Tourists Scheme as of next Sunday.
Furthermore, the decision determined five steps that retailers must follow when a customer asks to make a purchase under the Tax Refunds for Tourists Scheme, the first of which represents conducting the necessary due diligence – as outlined by the FTA and Scheme’s Operator – to verify whether the customer is an “overseas tourist” as per Clause 3 of Article 68 of Cabinet Decision No. 52 of 2017; that they are in the UAE when making the purchase; and that they were present at the retail store along with their purchase invoices when claiming the refund documentation. Step two requires the retailer to record the customer’s information and details of the purchase and to issue the necessary documents for the customer to claim the VAT refund when exporting the goods. As per step three, the retailer must comply with all procedures pertaining to handing over, packaging and delivering goods, according to FTA conditions set for certain goods or categories of goods.
Retailers must also verify that the customer is 18 years of age or older before issuing them with refund claim. The scheme operator, meanwhile, is prohibited from refunding taxes to overseas tourists before verifying that the said tourists exports the goods in question outside the UAE within 90 days of the date of supply of such goods. The fifth and final step calls on the Scheme Operator to verify that the exported goods and the refund claim adhere to the requirements agreed upon with the FTA.
According to the decision, the Authority may collect fees from overseas tourists applying for the tax refund, namely, an administrative fee amounting to 15 per cent of the VAT amount refunded to the overseas tourist, and a fixed fee of Dh4.8 for every claim. The Scheme Operator then deducts these fees from the total amount to be refunded to the overseas tourist on behalf of the FTA. Decision No. (2) of 2018 specified three categories of goods to be excluded from the Tax Refunds for Tourists Scheme, namely: Any goods that the overseas tourist does not have with them once leaving the UAE; goods that were entirely or partially consumed in the UAE or any other implementing state; and motor vehicles, boats and aircrafts.