In the near future, tourists visiting the UAE will be refunded VAT included in the cost of purchases made by them in the country.
Updated: Details on how the Tax Free system works in the UAE here.
According to the head of the UAE Tax Service, Mr. Al Bustani, tourists in the UAE will soon be able to receive a VAT refund.
Hassan Al Bustani at a press conference on Wednesday said that in the near future the UAE government plans to realize the possibility of VAT refunds for people visiting the UAE as tourists.
"At the moment, we are holding a tender on which company will technically refund VAT. Signing a contract with one of the operators is already at the final stage," said Al Bustani, Head of the Federal Tax Service (FTA) of the UAE.
Emphasizing the importance of the role of tourists in the economic development of the state, Mr. Al Bustani said: "Tourism is a very important industry for the economy of the United Arab Emirates, so we are aware of the need to implement a VAT refund mechanism."
Despite the fact that the Federal Tax Service seeks to implement this function as quickly as possible, the process of choosing a Tax Free service provider should be transparent and professional.
“In order to get an effective system of returning value added tax, we need to act professionally, applying the experience of other countries in this matter,” Al Bustani said.
Tourists visiting the UAE will be able to receive a VAT refund on their purchases made on vacation or during holiday sales. Authorities have not yet disclosed all the details of this mechanism.
However, representatives of the Federal Tax Service have already stated that tourists from the countries of the Gulf Cooperation Council will not be able to refund VAT in the UAE.
At the end of last year, the FTS proposed that the exact mechanism for VAT refunds be agreed within a few months.
According to the executive order, the following conditions must be met for the implementation of the value added tax refund scheme:
- The buyer must receive the purchased goods during his stay in the country.
- The purchase must be made within 90 days of a tourist in the UAE.
- A tourist cannot be a citizen of a Gulf Cooperation Council country.
The tax service may also publish a list of products for which it will not be possible to receive a refund.
