VAT Tourist Refund Process Outlined

Previously, in April 2018, the United Arab Emirates’ (“UAE”) Federal Tax Authority (“FTA”) had announced its intention to make it possible for tourists to reclaim Value Added Tax (“VAT”).  FTA have now outlined the conditions and mechanisms to do so.

The FTA has said that a tourist needs to have purchased goods in the UAE from retailers registered in the VAT Tourist Refund System, which is anticipated to go live soon and would be connected to point of sale machines in registered retailers as well as at all points of entry. Dedicated places will be available for tourists to file claims through the automated machines and receive refunds through their bank accounts or credit cards, when exiting the country.

"Upon leaving the country, the tourists will be able to reclaim taxes paid on their purchases in a fully electronic system without any human involvement. The tourists shall submit the required documents and obtain a refund via credit card or in cash from the global operator," the FTA authority said.

The refunds will be processed if all the relevant conditions are met:
•  Goods in question need to have been supplied to the tourist within the UAE;
•  Tourist must have the explicit intention to leave UAE in ninety (90) days from the date of supply, along with the purchased supplies;
•  Goods in question must be exported out of the UAE by the tourist within three (3) months from the date of supply; 
•  Tourist needs to have purchased goods from a retailer registered in the FTA system;
•  Purchase process must be carried out - and the goods exported - according to the requirements determined by a decision of the FTA;
•  Goods in question must not be exempted from refund.

Source: Khaleej Times

HOW CAN TLG HELP?
TLG’s Corporate & Commercial Division would be pleased to provide you with assistance and support in assessing the applicability, implacability and/or impact of this new procedure to you and ensure optimum compliance with all UAE VAT and taxation laws, rules and regulations.  
 
STAY UPDATED
To receive key legal updates and ensure accurate implementation of the law, rules and regulations in UAE, subscribe to TLG’s legal updates and newsletter by visiting our website, www.tlg.ae.