Complex Made Simple

VAT refunds to make tourism cheaper in the UAE?

According to the Emirates News Agency (WAM), the number of passengers that passed through the UAE’s airports reached 123 million passengers in 2017, and the total contribution of the tourism sector to the country’s GDP reached 11.3% that same year.

That said, the implementation of 5% VAT at the start of the year has affected tourists as it has citizens, who are now experiencing mild inflation in the country.

In July, WAM revealed that a tax refund system for tourists was in the works.

“The system will be implemented beginning the fourth quarter of 2018 in cooperation with an international specialized company in tax recovery services,” the statement by the government agency had said.

This month, it was revealed that plans to put the system in effect are already underway, making it cheaper for tourists looking to make purchases in the country.

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A less-costly tourist trip

According to the Khaleej Times, “the UAE looks set to put an up-to-date system in place for VAT refund to millions of tourists from November. The VAT refund system will be initially available at Abu Dhabi, Dubai and Sharjah airports and by year-end, it will be extended to 12 exit points, including the land borders and ports, it is learnt.”

They continued by explaining that the “Federal Tax Authority (FTA) and Tourist Refund Scheme operator Planet have issued guidelines setting a minimum limit of $68 (Dh250) to claim VAT refund.”

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The FTA and the Dubai Chamber of Commerce and Industry revealed that starting November 2018, the tax refund system would fully launch. “Eligible tourists will be able to receive a proportion of the VAT as a refund when they shop at registered stores.”

“Revealing conditions and procedures for tourist VAT refunds, the FTA had said that tourists need to have purchased goods from retailers registered in the system,” Khaleej Times reported.

A digital solution will be offered to resolve the VAT refund situation, offering a much quicker and more streamlined procedure. This will be resolved through the use of designated spaces utilizing a digital system not too different from an ATM or an e-ticketing booth.

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