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Tax Free Shopping in UAE for Non-Residents

Oneworld MidEast
18 April, 2019

What is Tax Free Shopping

The UAE Federal Tax Authority introduced a VAT of 5% in January 2018, and launched Tax Free Shopping in Q4 2018.

Tax Free shopping is the purchasing of goods in the UAE which will be exported (subject to terms and conditions) whereby shoppers can obtain a refund on the VAT on these items, providing that they validate their purchases according to local rules.

Who is Eligible for VAT refunds

Overseas tourist. Means any natural Person who is not resident in any of the Implementing States and who is not a crew member on a flight or aircraft leaving an Implementing State.

UAE Currency: Arab Emirates Dirham (AED)

VAT Rate: 5%

Minimum spend: AED 250/-

Conditions for tourists to claim their VAT refunds

  • Goods must be purchased from a retailer who is participating in the tax refund scheme;
  • Intention to leave the UAE within 90 days of date of supply along with the purchased supply;
  • Only tax invoices issued from 18 November 2018 will qualify eligible tourists to reclaim taxes on their purchases;
  • All taxable goods are eligible for tax refunds except for:
    • Goods that have been consumed, fully or partly, in the UAE or any Implementing State;
    • Motor vehicles, boats and aircrafts;
    • Goods that are not accompanied by the Overseas Tourist at the time of leaving the Emirates.

How the system works

Until October 2018, 4000 retail outlets across UAE were connected electronically to the system. These eligible outlets can be identified with posters displayed on their storefronts and visible to visitors.

  • A tourist can request a Tax Free purchase, and must present a valid passport. Tourist should be over 18 years old;
  • The shop assistant captures tourist information using the Planet system;
  • The shop assistant then places the Tax Free tag on the back of the sales receipt;
  • A digital Tax Free form is then created;
  • The tourist must validate the transaction at the point of exit (e.g. at the airport, etc.).

Where to get your receipts export validated

At the Dubai, Abu Dhabi and Sharjah International Airports, etc. Just follow the signs for Tax Free Refunds and concerned staff will greet you and validate your purchases.

What's required at the time of export validation

  • Your sales receipt with the tax refund tag affixed to the back;
  • Purchased goods (please go to the validation desks before you check in your luggage, as you will have to show the goods to responsible staff members at the airport);
  • Passport;
  • Boarding pass;
  • Refund options available:
    • Cash*
    • Credit Card (Visa, Mastercard, Amex, CUPS).

*there's a limit of 10,000 AED for cash refunds per Overseas Tourist per 24 hours.

Refund amount and fees

You will receive 85% of the tax paid, minus a fee of 4.80 AED per tax free tag validated.

For more details how to proceed with tax refund for tourists, please visit:

https://government.ae/en/information-and-services/finance-and-investment/taxation/tax-refund-for-tourists

http://www.planetpayment.ae/tourist

http://www.planetpayment.ae/localrules

Our in-house experts are well placed to assist you in

  • Setting up Your Business & Bank Accounts in the UAE;
  • Acquiring UAE residency via different means & Visa applications assistance;
  • Local Compliance & Tax Matters;
  • VAT Registration & Filings;
  • Accounting & Bookkeeping.

Please contact us today on:

Ph.: +971 4 551 5693 Email: info@oneworldmideast.net


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About the Author


Oneworld MidEast

Oneworld MidEast can offer your business, start up or established the support you need to plan for the future and take make your goals reality. We are a team of specialist staff with extensive experience in international tax planning, corporate planning and support, financial reporting, management consultancy. www.oneworldmideast.net

 

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