Tourists from all over the world flock to the UAE throughout the year for its sun-kissed beaches, unique attractions and most importantly, the irresistible lure of shopping. So it was nothing short of a mini-setback when the UAE government took a historic decision to introduce Value Added Tax or VAT on a majority of goods & services starting this year. But as the year draws to a close, tourists again have a reason to rejoice as they are now eligible for an 85 per cent tax refund on their purchases!
Do you have friends or family visiting Dubai, who wish to head back home with some fabulous goodies? Learn all about the tax refund scheme and find out how you can claim your cash back after a memorable vacation.
What is the tax refund scheme?
The new tax refund scheme allows tourists to claim 85% VAT refund on a minimum purchase of AED 250 made at any registered store in the UAE. Under the scheme, tourists can claim a total cash back of up to AED 10,000 within 3 months or 90 days of making the purchase.
Note: There’s no refund limit if you get the amount transferred to your credit card.
[Related: Do you have to pay VAT when you sell your car?]
What is a registered store?
Around 4,500 companies across the country have signed up for the VAT refund scheme so far, with the number expected to rise to 6,000 next month. In fact, the Federal Tax Authority (FTA) expects the number of participating stores to swell to 10,000 by the end of next year, which will give more options to shoppers. The registered firms include electronics, gold traders, general traders, souks and others. Tourists will be able to identify the eligible outlets via posters displayed on storefronts.
How do I claim my refund?
You can apply for tax-free purchase at any registered store after furnishing your passport details. The store will then issue a tax-free tag on the back of your invoice, which has to be validated via a service kiosk at the point of exit. Once validated, you can choose a refund method – cash or credit card – and get your money back. Currently, you can locate these kiosks at airports in Dubai, Abu Dhabi and Sharjah. However, the government plans to extend the facility to other ports and airports across the country soon.
[Related: How will VAT affect the cost of living in the UAE?]
What else makes me eligible for a refund?
Apart from the minimum purchase limit, tourists are required to be at least 18 years of age and must plan to leave the UAE within three months of purchase along with the items they have bought.
Are all goods included in the scheme?
No. Goods like motor vehicles, boats and aircraft are not part of the tax refund scheme. Also, goods that have been fully or partly consumed in the UAE before you leave will not be eligible for the scheme either.
With user-friendly implementation and digital transfer process, the scheme is expected to be simple. So remember to keep your passport details handy and be on a lookout for participating stores offering tax-free purchases.