Tourists coming to the United Arab Emirates will be able to claim a refund any value added tax (VAT) they pay while making purchases inside the country from November 18 onwards, the emirates’ tax authority announced on Monday.
The Federal Tax Authority (FTA) said in a statement that the refund process will be carried out in two phases. The first will start on November 18 and will allow tourists leaving airports in Abu Dhabi, Dubai and Sharjah to reclaim VAT on purchases made on November 18 onwards. The second phase will be implemented from December 15, and will allow tourists to reclaim VAT from any airport, sea port or border checkpoint in the UAE.
“The Tax Refund for Tourists Scheme is applied once they leave the UAE, where tourists will receive their refunds through a special device at the departure port (airport, seaport, or border port), by submitting the tax invoices for their purchases from the outlets registered in the Scheme, along with copies of their passport and credit card. Once these documents are submitted, tourists can either recover the VAT in cash in UAE dirhams, or have it transferred to their credit card,” the FTA said in its statement.
The authority said that only invoices issued by retail outlets registered with the FTA will be accepted.
“These eligible outlets can be identified with posters displayed on their storefronts and visible to visitors,” it added.
A five percent VAT rate was applied in the UAE for the first time in January, in a move by the emirates to diversify its sources of income. The UAE also introduced an excise tax at a rate of 100 percent on tobacco and energy drinks and 50 percent on fizzy drinks, excluding carbonated water, starting from October last year. On Saturday, the FTA said that 715 companies, or 97.7 percent of the those required to collect excise tax, had registered with the authority.
There has been no official announcement made yet on the amount of tax revenues collected in the United Arab Emirates following the introduction of either the excise tax or VAT. Earlier this month, Ministry of Finance officials said that the state’s latest federal budget does not include tax revenues.
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