UAE Sets ‘Unlimited VAT Refund’ for Tourists

Tourists visiting the UAE for their retail therapy and shopping fix will have a reason to celebrate because the government is set to implement the No-Limit Tourist VAT Refund across a wide variety of retailers starting November 18, as shared in a report by the Khaleej Times.

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As per the government initiative, the tourist VAT refund has been capped at AED 10,000 in cash, but if the refund claim exceeds this amount, the funds will be electronically transferred to the tourist according to Gary Byrne, the director of new markets and group strategic partnership at Planet, a business expert solutions company in the UAE.

UAE Sets ‘Unlimited VAT Refunds’ for Tourists
Image Credit: Wikimedia Commons

‘Unlimited’ VAT Refunds for Tourists to be Implemented in the UAE

Planet will take on the entire process for tourist VAT refunds in support of the UAE’s Federal Tax Authority (FTA).

Byrne shared that there has been growing reception of the new scheme and that the number of companies registering for the scheme is expected to double from over 4,500 at present to 6,000 by year-end, and 10,000 by early next year.

There is also good participation from companies across a number of sectors which primarily include electronics, general traders, gold dealers, and souks among others, noted Byrne.

Majority of the VAT refund from tourists are expected to come from purchases of gold jewellery, gadgets, and luxury items.

Moreover, Byrne cited that for a VAT refund to apply, consumers must accumulate a minimum total purchase amounting to AED 250. Of note, the full 5 percent VAT will not be given because the refund is limited to 85 percent of the VAT amount paid to the retailer, minus one percent administrative fee of AED 4.80 for every tax-free form.

With the new scheme set to be rolled out for the next few months, the inbound tourism to Dubai and the UAE is also expected to get a strong boost in time for the upcoming holidays.

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