How to claim VAT refund in UAE for Tourists?

The United Arab Emirates (UAE) introduced a Value Added Tax (VAT) of 5% in January 2018. However, tourists visiting the UAE can benefit from tax-free shopping and claim a VAT refund for eligible purchases made during their stay. This VAT refund process is facilitated by a fully digital system connecting retailers enrolled in the "Tax Refund for Tourists Scheme" with all UAE entry and exit points. This article will explain tax-free shopping, eligibility, and the steps involved in claiming a VAT refund as a tourist in the UAE.

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What is Tax-Free Shopping in UAE?

Tax-free shopping refers to the purchasing of certain taxable goods which will be exported from the UAE. Eligible tourists can buy goods and claim a VAT refund at the point of exit after the required validation done on their purchases. They can claim VAT refunds for the already validated exported tags within 1 year from the date of export validation. 

What are the Goods eligible for VAT refund ?

You can claim VAT refunds for all the taxable goods in UAE, except the following:

• Consumed Goods: This includes food, drinks, and any items you plan to use or open while you're in the UAE.
• Transportation: Motor vehicles, boats, and aircraft are excluded from the tax-free scheme for VAT refund.
• Services: You cannot claim a VAT refund on services like hotel stays, restaurant meals, or entertainment.
• Delivered Online Purchases: Goods purchased online and delivered to your accommodation or outside the store are not eligible.
• Used Items: Partially or fully used items, along with those missing the original packaging, cannot be claimed for a VAT refund.

How to shop tax-free in UAE for tourists & claim VAT refund?

The following steps capture the tax-free shopping process in UAE.

1. Make a Qualifying Purchase: Look for stores registered under the tax-free scheme. You'll need to spend a minimum of AED 250 on eligible goods.
2. Request Tax-Free Purchase: Inform the shop assistant you'd like a tax-free purchase.
3. Present Travel Documents: Have your valid passport or GGC National ID ready for the shop assistant to scan. The assistant will enter your information into the Planet system, the official tax refund operator.
4. Receive a Tax-Free Receipt: The shop assistant will attach a special "tax-free" tag behind the sales receipt.
5. Validate at the Airport (Within 90 Days): You must validate your tax-free purchases at the airport before departing the UAE. This validation needs to happen within 90 days of your purchase date. After the validation, the VAT refund will be successfully done.

Conditions for tourists to claim VAT refunds in UAE

Below, we have given the required conditions for tourists to claim VAT refunds in UAE.

• The tourist's age must be at least 18 years old.
• Goods must be bought from the retailer participating in the "Tax Refund for Tourist Scheme".
• Purchased goods should not exempted from the VAT refund scheme of the FTA.
• The tourist must physically present the tax invoice, "tax-free" tags, and the relevant goods to the "Planet staff" at designated kiosks or desks at departure points.

How to collect VAT refunds in UAE for tourists?

1. Locate the VAT Refund Desk or Kiosk: Look for Planet's tax-free manned validation desks or self-service kiosks. These are usually situated in departure areas.
2. Prepare your documents: Prepare your passport, tax invoices from participating stores, and tax refund slips for presentation.
3. Validate your purchases: At the desk or kiosk, present your documents and purchased items (if requested) for inspection by Planet staff. They will validate your tax-free transactions with a stamp or electronic verification.
4. Choose your refund method: Decide whether you want a VAT refund in cash, through a credit/debit card or Wechat application.
5. Receive your refund: After approval, you'll receive your VAT refund minus a small processing fee (around AED 4.80 per tax-free tag).

Note: The maximum cash VAT refund per tourist is AED 35,000. If the refund amount exceeds AED 35,000, you must provide a valid credit/debit card to process the VAT refund. 

Conclusion

In conclusion, UAE tourists can claim a VAT refund on purchases exceeding AED 250, excluding certain goods and services. By following a straightforward process that involves getting tax-free receipts validated at departure points within 90 days, tourists can recover a portion of the VAT paid on eligible items. Remember to keep all receipts and purchased items handy for inspection during validation for VAT refund.

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