VAT refund made easier: Tourists can now claim Value Added Tax at shopping malls and hotels in UAE

Dubai: Tax refund on shopping has been made easier for tourists to the UAE.

Tourists can now reclaim their taxes on shopping from the Self-Service Kiosks which will be set up at major shopping malls and hotels across the country.

“The Value Added Tax (VAT) Recovery Self-Service Kiosks for Tourists scheme has been expanded to be available at major shopping malls and hotels, in addition to the existing ones at air, land, and maritime entry and exit ports across the UAE,” announced the Federal Tax Authority, (FTA).

The FTA last year had introduced the self-service kiosks across all ports to allow tourists to recover Value Added Tax (VAT) when leaving the UAE.

Expansion

The expansion aims to provide additional services to tourists, enhancing the UAE’s status as a leading destination on the international tourism map. Planet- the company authorised by the FTA to operate the electronic system for the Tax Refunds for Tourists Scheme launched nine self-service kiosks in stage one of implementing the plan, setting them up at multiple shopping malls and hotels.

The kiosks are equipped with state-of-the-art technology allowing them to fully process VAT refund requests for tourists.

Tax refund within 24 hours of departure

In a statement, the FTA explained that the kiosks allow tourists to process their requests to recover VAT from the convenience of their hotel or at major malls in a matter of minutes. Applicants can scan their boarding pass to prove they will be leaving the UAE in the next 24 hours, as well as their original passport (or identity card for GCC nationals), and then follow the simple instructions displayed at the self-service kiosks.

55 new kiosks

The FTA revealed that Planet intends to deploy up to 55 new self-service kiosks by the end of 2020. Some 25 of the kiosks will be stationed in malls and 30 in hotels.

FTA Director General Khalid Ali Al Bustani said that expanding the scope of self-service kiosk for the tourists’ refunds to include malls and hotels in addition to exit ports was part of the Authority’s strategy to continuously develop its services, enhance efficiency and performance.

“Our objective from expanding the self-service kiosk is to provide further facilities and additional options for tourists looking to recover taxes,” he added. “Eligible tourists who meet the necessary criteria for reclaiming the VAT they incurred on their purchases in the UAE can process their refund applications from the convenience of their own hotels or from a list of major shopping malls around the country.”

Growing number of users

“This latest development further upgrades the services we offer through the electronic system of the Tourists Refund Scheme, which has seen increasing success and a growing number of users taking advantage of its speed and ease of use,” Al Bustani explained.

“This establishes the system as one of our most effective tools to promote tourism, and cement the country’s status as a leading tourist destination with world-class infrastructure, sites, and events,” he noted.

The FTA Director General said that task forces from the Federal Tax Authority are conducting ongoing field inspections to ensure the system is operating in accordance with stringent quality standards and conditions, Wam reported.

More than three million refund transactions

The number of digital transactions under the Tourists Refunds Scheme grew to 3.2 million in the period between its launch in November 2018 and the end of 2019.

By end of June 2019, the total stood at 1.52 million transactions; the number leapt by .68 million applications in the second half of 2019, marking a staggering 110.53 per cent growth during that period.

Daily average number of tax refund transactions for tourists grew 2.64 times from 3,720 in the scheme’s first month to 9,830 daily transactions in December 2019.

The number of retail outlets linked with the system increased to 12,310 stores across the UAE, while the network of self-service kiosks allowing tourists to recover VAT at exit ports around the country grew to 52 up by 79.3 per cent from the total of 29 kiosks deployed as of July 2019.

Tourists can submit their requests to recover the taxes they incurred on purchases in the UAE when they are about to depart from the country.

What is required to get refund

Applicants must submit the tax invoices on their purchases, marked with Tax-Free’ stickers issued by retail outlets registered in the system, along with their passport and credit card.

No limit is placed on the maximum amount that can be recovered if said amount is transferred to the tourist’s credit card.

The  maximum amount is set at Dh7,000 per day for tax refund in case of cash payment.

This process can be carried out at self-service kiosks, as well as at tax refund offices located at ports of exit across the UAE.

The Authority asserted that to be refundable, tax invoices need to have been issued by the retail stores included in the Scheme and registered in the system; these venues can be identified by visibly showcasing ‘Tax-Free’ stickers on their storefronts.

Who can take claim refund

Any tourist shopping in stores located in the United Arab Emirates is eligible to reclaim a refund made on purchases provided that he or she fulfils certain conditions. 

Tourists who plan to apply for refunds must ensure that their purchases are from retailers that are participants in the “Tax Refund for Tourists Scheme”

The tourist in question must have the intention of leaving the UAE within ninety days from the day of purchase along with the products that bought.