How to Claim VAT Refund in UAE: Guide for Tourists & Businesses

Are you staying updated on the latest developments if you plan to visit the UAE for business? Your purchases might meet the requirements for receiving a VAT refund. Foreign business visitors who attend exhibitions and meetings in the UAE, along with tourists shopping at local stores, can access straightforward procedures to obtain their VAT refund.

The blog explains the requirements to claim VAT refund in the UAE, including programs, together with the system designed for the VAT Refund Scheme for Foreign Businesses to apply for tax refunds and the fast process of obtaining your payments.

What is a VAT Refund?

A VAT refund permits qualified persons or entities to reclaim the Value Added Tax (VAT) they paid on goods or services in a particular country. When VAT came into being in 2018 in the UAE, it was levied at 5%, lower than in most other nations; this, however, still leads to a considerable amount of impact on companies and people when they cash in big equipment or goods in business transactions.

VAT refund in the UAE assists in enhancing tourism and promoting international business participation.

Who Can Claim a VAT Refund in the UAE?

Your category determines your eligibility to claim a VAT Refund in the UAE:

Tourists: Tourists can receive a VAT refund on goods purchased from participating retailers and export the goods within 90 days of their visit to the United Arab Emirates are eligible for a VAT refund.

Foreign Businesses: The VAT Refund Scheme for Foreign Businesses is open to foreign companies that do not have a physical location or engage in taxable activities in the United Arab Emirates.

Overview of VAT Refund Schemes

The UAE has designed two primary VAT refund schemes specifically:

The Tourist VAT Refund Scheme - It functions through airport and border electronic kiosks to enable non-residents to collect a VAT refund for qualified goods purchased at registered retailers.

The VAT Refund Scheme for Foreign Businesses - It functions for offshore entities that fulfil designated conditions of non-residency and reciprocal trade agreements.

Both VAT refund schemes serve to streamline the refund system and boost regional spending, along with business operations.

VAT Refund Scheme for Foreign Businesses

The VAT Refund Scheme for Foreign Businesses allows overseas companies to reclaim their paid VAT on business expenses when they conduct operations in the United Arab Emirates. The refund program only provides benefits to companies that fulfil specific requirements.

Eligibility Criteria:

Under this scheme, foreign business visitors have the right to request a VAT Refund when they meet the following conditions:

The applicant does not operate as a taxable entity in the United Arab Emirates.

The applicant does not conduct any business operations in the United Arab Emirates.

The applicant lacks any fixed operational sites in the United Arab Emirates and in every GCC implementing state.

You must be registered with your home country's tax authority.

The following conditions prevent you from obtaining a VAT refund:

The Foreign Business makes supplies in the UAE (unless the recipient is obliged to account for VAT under the reverse charge mechanism)

Non-resident tour operators do not qualify for the refund program.

Your nation does not maintain a reciprocal VAT refund agreement with UAE businesses.

These criteria exist to verify that the VAT refund reaches solely foreign corporations that do not operate permanent facilities in the United Arab Emirates.

How to Claim VAT Refund in UAE?

The VAT Refund claim process in the United Arab Emirates operates through an organized and easy-to-follow system that benefits both tourists and business organizations equally.

For Tourists, the following steps are required:

Shop at approved outlets: The store must be registered within the tourist VAT refund system.

Ask for a tax-free purchase receipt: When you buy a product, the cashier will add a digital tag to your receipt.

Validate your purchases: Before boarding your plane at the airport, you need to use the Planet Payment kiosks for purchase validation.

Show your passport and boarding pass at the time of refund collection.

You have the choice to receive a cash refund within specific limits or have the refund processed to your credit card account.

Foreign Businesses should follow the steps below when applying for a VAT Refund:

1. Make sure your business qualifies for the Foreign Business VAT Refund Scheme.

2. You need to keep all original invoices that demonstrate the VAT paid in the UAE.

3. You need to file your application through the FTA (Federal Tax Authority) portal (https://tax.gov.ae/).

4. Attach your business registration documents along with essential banking information and all other necessary paperwork.

5. Claims for VAT refund must be filed within 12 months from the completion of the calendar year that contains the VAT expenses.

6. The Foreign Business makes supplies in the UAE (unless the recipient is obliged to account for VAT under the reverse charge mechanism)

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Eligibility and application process

• You need to submit a copy of your passport or your trade license.
• The original tax invoices must be presented for the application process.
• Tourists need to present proof of export when requesting a VAT refund.
• The process requires you to provide your banking details to receive electronic refunds.
• Businesses need to provide evidence of non-residency when requesting a VAT refund.
• Foreign businesses must provide a certificate of establishment from their home country when applying for a VAT refund.

The VAT refund process operates more efficiently when you have all these documents available.

Conclusion

Tourists and international companies in the UAE can access valuable savings through the VAT refund system. People and businesses can obtain a tax refund through the well-organized system, which allows the reclaiming of payments made on qualified merchandise or services.

The hassle-free Refund process requires completing the necessary procedures while fulfilling specific criteria and retaining all mandatory paperwork when shopping or participating in trade exhibitions.

Frequently Asked Questions

How do I claim a VAT refund?
To obtain a VAT refund, first, you need to confirm your purchase complies with the program requirements, then get your tax invoices and visit the airport refund (for tourists) or submit an online application through the FTA portal (for foreign businesses).

How can I refund VAT?
The refund process requires two steps, which include verifying your purchase meets the requirements and obtaining tax invoices before you either go to the airport refund or complete an online application through the FTA portal.

How to check the VAT refund status?
Refund information for tourists can be accessed by using the Planet Payment system. Businesses located outside the UAE can view their application assessment through the Federal Tax Authority website.

What documents are required for a VAT refund?
The process requires you to provide the original tax invoice along with your passport or license as proof of identity for businesses and export evidence, if necessary, and your banking details to receive the refund.

How long does it take to receive a VAT refund?
Tourist refunds normally complete processing within a few minutes at the airport office. Foreign businesses will typically receive their refunds within a period of 4 months from the date of their application submission.