How to Claim VAT Refund in UAE
VAT Refund in UAE
If you’re a visitor to the UAE and looking to claim a VAT refund on your eligible purchases, this guide will walk you through the process of claiming a VAT refund in UAE. Since the implementation of the Value Added Tax (VAT) system in the UAE in 2018, non-UAE residents are eligible to claim a VAT refund on goods and services purchased during their stay. To claim a VAT refund in UAE, you need to meet certain eligibility criteria and provide the necessary documentation.
What is VAT in UAE?
Value Added Tax (or VAT) is an indirect tax. VAT was introduced in the United Arab Emirates on 1 January 2018. The general VAT rate is 5% and applies to most goods and services, with some goods and services subject to a 0% rate or an exemption from VAT (subject to specific conditions being met).
Importance of VAT Refund for Businesses and Tourists
Tourists and visitors can claim refund on VAT paid on purchases they made during their stay in the UAE. Recovery of payment will be done through a fully integrated electronic system that connects retailers registered in the ‘Tax Refund for Tourists Scheme’ with all ports of entry and exit from the UAE.
Eligibility Criteria for VAT Refund
To claim a VAT refund, you must meet the following eligibility criteria:
- You must be a non-UAE resident.
- You must have purchased goods or services for personal use.
- The tourist must be at least 18 years old
- Goods must be purchased from a retailer who is participating in the 'Tax Refund for Tourists’ scheme
- Goods are not excluded from the refund scheme of the FTA
- The tourist must physically present the tax invoice, ‘tax-free’ tags and relevant goods.
VAT Refund Process for Tourists
- At the store, a tourist can request for a tax-free purchase, which is valid on a minimum expenditure of AED 250.
- The tourist must present a valid travel document to be scanned for use on the payment system.
- The shop assistant will capture the tourist’s information using the Planet system.
- A digital tax-free form is then created.
- The tourist must validate the transaction at the airport within 90 days of the purchase date.
Documentation Required for VAT Refund
Tourists can collect their refunds through a special device placed at the departure port – airport, seaport or border port. They must submit:
- Original tax invoices for the goods or services purchased.
- A valid passport with an entry stamp to the UAE.
- Boarding pass or travel itinerary showing your departure from the UAE.
- Refund receipt issued by the retailer.
VAT Refund Process for Businesses
VAT registered businesses and the ‘taxable persons’ in the UAE are required to submit a ‘VAT return’ to Federal Tax Authority (FTA) at the end of each tax period. A VAT return abridges the value of the supplies and purchases a taxable entity has made during the tax period, and shows their VAT liability. VAT liability is the difference between the output tax payable (VAT levied on supplies) for a given tax period and the input tax (VAT incurred on purchases) recoverable for the same tax period. The difference must be paid to FTA, if the output tax exceeds the input tax amount. On the other hand, if the input tax exceeds the output tax, a taxable entity will have the excess input tax recovered; they will be allowed to set this off against the following payment due to FTA.
VAT Refund Services in UAE
MARKEF provides assistance to taxable businesses in the UAE to claim their VAT refunds. We offer top-notch VAT refund services, with our team of VAT specialists submitting refund forms to the Federal Tax Authority (FTA) in the correct format and in compliance with guidelines. Our goal is to expedite the VAT refund process by ensuring VAT compliance. As claiming a VAT refund in the UAE can be a complex process, we highly recommend that businesses seek expert advice before submitting their refund forms.
Conclusion
Claiming a VAT refund in the UAE is a straightforward process that can help you save money on eligible purchases made during your stay. By following the steps outlined in this article, you can ensure that you are eligible for a VAT refund and that your refund application is processed smoothly.
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MARKEF is a leading Accounting Firm offering wide range of services including Accounting and Bookkeeping, Audit and Assurance, VAT and Corporate Tax, Business Consulting, Management Consulting, and Business Setup Services in Dubai and across United Arab Emirates.
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