Value Added Tax (VAT) is a consumption tax that is added to the cost of goods and services at each stage of production. While VAT is a common tax in many countries, tourists visiting Dubai will be pleased to know that they can actually get a refund on the VAT they pay on certain purchases.
VAT refund in Dubai for tourist allows you to enjoy shopping in Dubai without having to worry about paying extra taxes. The VAT refund system in Dubai is designed to make shopping more enjoyable for tourists, and it provides a great incentive for visitors to shop and spend money in the city.
So, if you’re too planning a visit and shopping in Dubai, explore the benefits of the tourist VAT refund in Dubai and understand how tourists can take advantage of this great opportunity.
VAT in Dubai
VAT stands for Value Added Tax. It’s an indirect tax levied on most goods and services at each stage of the supply chain. Businesses registered for VAT collect VAT from customers and then remit it to the government, minus the VAT they paid on their own business purchases (input VAT).
This ensures the final consumer bears the burden of the tax.
The standard VAT rate in the UAE is 5%. This applies to most goods and services.
However, there are also two other categories:
Zero-rated supplies: These have a 0% VAT rate. This applies to exports outside the GCC (Gulf Cooperation Council) countries, international transportation, some specific areas like healthcare and education, and the first supply of residential property within 3 years of completion.
Exempt supplies: These are not subject to VAT at all.
Tourist VAT Refund Scheme in UAE
The VAT Refund Scheme in the UAE for Tourists is a program that allows visitors to claim back a portion of the Value Added Tax (VAT) they paid on eligible purchases made during their trip. Basically, it’s a way for tourists to get some money back on the taxes they paid for goods.
When you buy something in the UAE, there’s usually a 5% VAT added to the price. This scheme lets you get some of that VAT back when you leave the country. This program is exclusive for tourists visiting the UAE, not residents or crew members departing.
However, it’s not a full refund, you can get back 85% of the VAT you paid, minus a small service fee.
Who is Eligible for VAT Refunds?
Here are some general requirements to be eligible for VAT refunds in Dubai for tourist:
- You must be a tourist visiting the UAE, not a resident or a crew member departing the country.
- You must be 18 years old or older.
- Your purchases need to be at least AED 250 (around $68 USD) per individual tax invoice (receipt) from a store participating in the VAT Refund Scheme.
The scheme applies to most goods, but with some exceptions. Here’s what qualifies:
- Goods that are unopened, unused, and in their original packaging.
- Most store-bought items (electronics, clothing, etc.)
Not Eligible:
- Food and Beverages are generally not included in the scheme.
- The program applies to goods, not services like restaurant bills or salon services.
- Certain goods like basic necessities (fresh food) and local residential rents are already VAT-exempt and not eligible for further refunds.
Please note you have 90 days from the purchase date to validate your Tax Refund Slip at the airport upon departure. You can claim your refund within one year from validating the Tax Refund Slip.
The VAT Refund Process in Dubai for Tourists
Here’s a step-by-step guide on claiming VAT refund in Dubai for tourist:
1. Look for Participating Retailers
Keep an eye out for stores displaying the “Tax-Free” or “Premier Tax Free” logo. These shops are part of the VAT refund program.
2. Request a Tax Refund Slip
When making a purchase above AED 250, ask the cashier for a Tax Refund Slip. This slip details your purchase and the VAT amount you paid.
3. Validate Your Tax Refund Slip
At departure from the UAE, head to a planet tax-free kiosk or manned desk at the airport before checking in your luggage and clearing security. You’ll need:
- Your Passport
- The Tax Refund Slip(s)
- The Purchased Items (which may be inspected by customs)
4. Receive your Refund
You can get 85% of the VAT amount back, minus an AED 4.80 service charge per Tax-Free Tag. You can choose a cash refund (AED 35,000 maximum) or a credit card refund.
5. Time Limits
You have 90 days from the purchase date to validate your Tax Refund Slip at the airport, and one year from validation to claim your refund.
VAT Refund at Dubai Airport Requirements
Here are the VAT Refund requirements at Dubai Airport (and all UAE airports) for Tourists:
- The original passport used for entry into the UAE.
- The original Tax Refund Slips issued by participating stores for your eligible purchases. Ensure they’re complete and accurate.
- You must have the original purchased items with you in their unopened, unused, and original packaging. Customs officials may request to inspect them.
- You have 90 days from the purchase date to validate your Tax Refund Slips at the airport before departure.
- Pack your purchases carefully to avoid any damage during travel that might affect the refund process.
Locations to Recover VAT in UAE for Tourists
These are the most common locations for VAT recovery. All major airports in the UAE have designated VAT refund points, including:
- Dubai International Airport (all terminals have VAT refund points)
- Abu Dhabi International Airport
- Sharjah International Airport
- Al Maktoum International Airport (Dubai World Central)
- Al Ain International Airport
- Ras Al Khaimah International Airport
VAT refunds can also be claimed at some seaports in the UAE, but this is less common than airports.
Read more: How to Claim VAT Refund in UAE 2024?
Shuraa Tax Simplifies Your Dubai Experience
Claiming a VAT refund in Dubai is a great way for tourists to save money on their purchases and make the most of their trip. By taking advantage of this opportunity, visitors can enjoy shopping in Dubai without having to worry about paying extra for taxes. The process is simple and straightforward, and the benefits are definitely worth it.
Keep your receipts safe, ensure your purchases are unopened and in original packaging, and factor in the time needed for validation at the airport.
If you need assistance with VAT refunds or any other business taxation needs in the UAE, don’t hesitate to consult Shuraa Tax. Our team of highly experienced tax consultants can ensure you maximize your benefits and minimize any tax burdens.
So, relax, enjoy the sights and sounds of Dubai, and leave the tax complexities to us.
Get in today at +971508912062. You can also drop us an email at info@shuraatax.com.
