tax refund in the UAE

Shopping & Tax Refunds

Dubai is a favorite destination for fashionistas and fashion buffs with its gigantic shopping malls, luxury and designer boutiques, and all its sales festivals like the Dubai Shopping Festival.

Since the government of the United Arab Emirates implemented the VAT refund system for tourists, it has saved visitors millions of dirhams.

VAT refunds are made through a fully integrated electronic system that connects retailers registered in the “Tax Refund for Tourists Scheme” to all UAE entry and exit points.

But what exactly is a tax refund and how does it work?

Tax refund is the act of recovering the VAT that you have paid on purchases abroad and that you wish to take back with you to your country of origin. Please note, however, that VAT refunds are subject to certain conditions.

5% VAT was implemented in GCC countries in 2018. The Emirates apply a 5% VAT rate on goods, but tourists can still enjoy tax-free shopping by getting a refund for the VAT you paid when shopping. You will get 85% of the VAT back minus AED 4.80 for admin fees. That’s a great deal.

But, keep in mind that not everything can be refunded, there are obviously conditions. VAT refunds will not be applied to anything that has been consumed (in whole or in part) in the Emirates, as well as goods purchased in the Emirates but which the tourist does not bring with him when leaving the country. In other words, new (unconsumed) items must be in your possession in the original boxes when you leave the Emirates, if you wish to be reimbursed for VAT.

But who can apply for a tax refund?

To be able to benefit from the tax refund, you must:

  • Be 18 years or older and not reside in the UAE;
  • Crew members on flights departing the UAE are not eligible;
  • Under certain conditions, GCC nationals are eligible;
  • There are restrictions on UAE nationals residing abroad for their studies.

How it works?

It’s very simple when you are shopping:

  • ask the retailer for a tax-free purchase – the expense must be greater than or equal to AED 250
    • Please note that the store must be part of the Tax Free System so that you as a buyer can benefit from the refund of VAT;
  • present your passport to the seller to be scanned on the payment device;
  • the seller will then attach a label marked “tax free” on the back of your invoice/ receipt;
  • the digital tax refund form will be created, do not forget to validate it before your departure;
  • the tax free receipt must be validated within 90 days of the date of purchase.

 

How is the merchandise validated?

Just because you have the tax free label on the back of your receipt does not mean that you will automatically be reimbursed. There are rules to observe:

  • you must bring the goods and their receipt (with the label on the back) to one of the various tax refund validation points called “Planet Payment” (official partner of the FTA tax refund office) at the Dubai International airport (DXB) or Al Maktoum airport (DWC). These kiosks are present in all terminals of the airport;
  • This step should be done before checking in for your flight and going through security checks.
  • Note that other tax-free validation points are present at Port Rashid for cruise passengers, and at the border between Oman and Hatta;
  • There are other Planet Payment kiosks in the city including Dubai Mall and soon to be available in other locations in the city;
  • In these kiosks you can submit your receipts, passport and credit card; the kiosk will take care of the rest and automatically process refunds. There is no limit on credit card refunds, but cash refunds are limited to AED 7,000 per day. It’s up to you to do your calculations and choose the most appropriate method;
  • Also, inside the airport you may be able to go through other validation checks and it is quite possible that the goods will be requested for inspection.

For more details on Planet Payment, go HERE: https://www.planetpayment.ae/ar-en/shoppers/

Now that you have all the tools in hand to reclaim the VAT on your shopping, it’s time to enjoy the best shopping malls in the Emirates!

 

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