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Tourist Refund Scheme in the UAE: FAQs
What is the Tourist Refund Scheme in the UAE?
The UAE is a tourist destination. The UAE VAT law will allow tourists to claim a refund on the tax they paid on purchases made when visiting the UAE, starting from November, 2018. The tourist refund scheme is exclusively for overseas tourists visiting the UAE. Once the tourist has claimed their VAT they will receive 85% of this amount. The remaining 15% will be deducted as administration fee. With the tourist refund scheme all tourists, above the age of 18 years-old, will be able to shop tax-free.
Who is considered a tourist in the UAE?
A tourist is any person who doesn’t reside in the UAE or any other GCC country, and who is not a part of any flight crew or overseas courier service that is leaving the GCC countries.
What conditions must be followed in order to be eligible for this scheme?
The following conditions must be followed in order to be eligible for the tourist refund scheme:
The tourist must have purchased the goods in the UAE from a UAE-based supplier who is registered for VAT.
The tourist must intend to leave the country within 90 days of the date of supply, along with their purchases.
The goods must be taken outside the GCC within three months from the date of supply.
The goods must not be exempted from refund. That is, they must be eligible for obtaining a refund.
Tourists will only be eligible to claim a VAT refund for purchases worth a minimum of 250 Dirhams.
What does a tourist need to apply for a refund?
In order to be able to apply for a refund, a tourist must collect a tax invoice from the supplier, that follows all legal requirements, amongst any other sufficient documents that prove that the tourist has made a refundable purchase.
How do tourists receive their refund?
Tourists can submit the required documents when leaving the country and receive their refund through either credit card or cash from the global operator, Planet. This transaction is completely electronic.
What goods are not included in Tax Free Shopping?
The following goods are not eligible for Tax Free Shopping:
- Goods consumed fully or partially in the UAE
- Motor vehicles, boats and aircrafts
- Food and drinks purchased for immediate consumption
- Goods that are purchased by an overseas tourist but not taken with them when they leave the UAE
Who is eligible for Tax Free Shopping?
Anyone over 18 years of age who is not a UAE resident is eligible for tax-free shopping. This includes nationals of other GCC countries.
UAE nationals who study abroad may face restrictions on their eligibility.
Who is not eligible for Tax Free Shopping?
UAE work permit holders and crew members of flights leaving the UAE cannot claim VAT on purchases.
How does Tax Free Shopping work?
When the tourist makes an eligible purchase of at least AED 250, the shop assistant will need to:
- Issue a Tax Free tag along with the sales receipt.
- Scan the Tax Free tag to link the transaction with the tourist’s passport or GCC National ID card using the smartphone app or the web portal.
- Enter all the required details, like the transaction amount and the tourist’s passport or GCC National ID card details.
The web portal or the app will display the VAT amount that will be refunded to the tourist.
Once the tags are validated, the tourist will receive a refund of 85% of the VAT, minus a AED 4.80 fee for the Tax Free tag. This amount will be calculated automatically during purchase and validation.
What should the tourist do after completing the procedure inside the store?
The tourist must keep their sales receipt along with the Tax Free tags, and get them validated within 90 days and just before they leave the UAE.
Since the validation process takes a couple of minutes, the tourist must arrive earlier at the airport, or land/sea border crossing earlier to complete the procedure. Before they check in their luggage and go through security, they need to get their Tax Free tags validated by either a Planet staff member or one of the self-service kiosks.
What documents does a business need to register for Tax Free Shopping?
Business owners must sign a contract and credit card consent form. They also must provide a copy of their TRN and Trade Licence certificates, along with an example of the signature of the contract signatory. If the signatory of the contract is not mentioned on the Trade Licence, then they will need the power of attorney to be a signatory.
How much does Tax Free Shopping cost the merchants?
There are no fees for startup, subscription, or licensing, or upfront hardware costs. As the business owner, you will receive an invoice every month for the total VAT amount paid through the Planet system. You will be required to pay VAT amount claimed by tourists to Planet. You can adjust this in your VAT returns to recover the VAT amount that was refunded.
You will be provided with a smartphone that has the app pre-installed, as well as QR code tags, point-of-sale material, and training for your staff.
What is the Planet invoice for?
The monthly invoice sent to you will show the total VAT amount related to the Tax Free tags that were validated in the previous month. You will be required to pay that VAT amount to Planet. You can adjust this amount in your VAT returns, so that you don’t have to bear any costs for being part of Tax Free Shopping.
Will Tax Free Shopping change my VAT return process?
No, this will not change your VAT return process. You can file your VAT returns normally. In the VAT adjustment field, enter the amount invoiced by Planet to reduce your tax payable for that period.
Can I issue a single Tax Free tag for several sales receipts?
Yes, provided that all the receipts are for goods that are eligible for Tax Free Shopping, and they are all from the same store and the same day. You can staple the receipts together and issue one Tax Free tag.
When can I issue Tax Free tags?
You can issue the tags at the time of sale, or you can ask your customers to go to a central service point in your shop where you provide the Tax Free tags.
How long does it take to issue Tax Free tags?
It takes under 2 minutes to issue a tag. All you have to do is to register the tag in the system and enter the necessary details.
How will I know if a tourist is eligible to receive tax refunds?
You will have to check the tourist’s passport. Only non-UAE residents are eligible for this scheme.
What goods are included in Tax Free Shopping?
All taxable goods except the following are part of Tax Free Shopping:
- Services
- Goods that are not taken by the overseas tourist when they leave the UAE
- Food and drinks that are intended to be consumed immediately
- Motor vehicles, boats and aircraft
How do I identify stores that offer Tax Free Shopping?
Stores that display the Planet Tax Free logo or that offer Planet Tax Free services provide Tax Free Shopping.
What are Tax Free tags and why should I get one?
Tax Free tags are attached to your sales receipt by the shop assistant when you buy Tax Free goods. These tags will be scanned and linked to your tourist passport or your GCC National ID card.
You will need your Tax Free tags for your refund process.
What is the minimum amount I must spend in order to benefit from Tax Free Shopping?
You must spend at least AED 250 to claim a refund on the VAT paid on your purchase.
What do I need to do to validate my Tax Free Shopping?
To validate your Tax Free Shopping:
Seek help from a Planet Tax Free staff member, or locate a self-service kiosk at the airport, seaport, or land border crossing before you check in your luggage and go through security control.
Keep your passport and boarding pass ready for VAT refund verification purposes. You may be asked to produce the Tax Free form as well.
Your forms will be validated digitally and you will receive a confirmation from the Planet Tax Free employee or the self-service kiosk.
You may be asked to show that your goods are unused. You may also be selected for additional inspection after you finish going through security control. If so, you will be notified by Planet Tax Free staff or the self-service kiosk.
What is the procedure to get my goods validated and get a tax refund using the self-service kiosk?
Before you check in your luggage, you will need to take the goods that you bought to a validation point in the airport and follow the steps below:
Scan or enter your passport number or GCC National ID card.
Follow the instructions on the screen. Once you’ve completed the validation process, you will see a green light. If you see a red light, contact a member of the Planet staff for help.
Choose a refund method (credit/debit card or cash), Planet will process the refund.
Please note that the maximum refund amount provided in cash is AED 10,000 per tourist. Any amount over this value will be processed to your credit/debit card.
How much time do I have to validate my Tax Free Shopping tag?
You have 90 days from the date of purchase to validate your Tax Free tag. For example, if the Tax Free tag is issued on the 1st of April, it should be validated before the 29th of June. The Tax Free tag expires after 90 days, and you will be unable to claim your refund after it expires.
How much refund will I receive?
You will receive 85% of the total VAT amount paid, minus a fee of AED 4.80 per Tax Free tag.
Which airport, seaport, or land border locations provide tax refunds?
Currently, validations and refunds are only available in the following locations:
- Abu Dhabi Airport – Common area between all terminals
- Dubai Airport – Terminal 1, 2, 3, and 3 Business
- Sharjah Airport
- Al Maktoum Airport
- Al Ain Airport
- Ras Al Khaimah Airport
Seaports
- Zayed — Abu Dhabi
- Port Rashid – Dubai
Land Borders
- Al Ghuwaifat — At the border with Saudi Arabia
- Al Ain — At the border with Oman
- Hatta — At the border with Oman
What is export validation and why is it important?
Export validation confirms that the goods you purchased are leaving the UAE and VAT can be claimed on these purchases.
Without export validation, you will be unable to receive a VAT refund.
Can I have my Tax Free tags validated by someone else on my behalf?
No, the Tax Free forms are registered to a particular passport. Only the owner of this passport will be able to validate the forms and collect the refund.
How will I receive my refund?
You can choose to receive your refund by credit card or cash when you validate your Tax Free tags.
How do I receive a cash refund?
Once you get your tags validated, go to a Planet Tax Free refunding partner. The Planet staff or self-service kiosk will direct you there. You will be required to show your passport and Tax Free tags to get your refund in cash.
How do I receive a credit card refund?
If you are getting your tags validated with the help of Planet Tax Free staff, mention that you would like to receive your refund to your credit card. The staff will enter your card details and initiate the refund for you.
If you are using the self-service kiosk, you can enter your card details.
The Planet Tax Free systems accept Visa, Mastercard, AMEX and CUPS. Once the refund has been initiated, the money will be transferred to your account within 3 weeks. You can track the status of your refund through the Planet Payment website.
What currency will the refund be in?
In most cases, the refund amount will be in the currency of your credit card.
What happens if I don’t collect my cash refund after I get my Tax Free tags validated?
If you selected a cash refund but ran out of time to collect it before you left the UAE, you can go to the Planet Payment Website, click Track My Refund, and select the credit card refund option. You will then be asked to enter your card details.
Are there additional fees involved during the Tax Free validation process?
No, all fees are included when you purchase the goods and get your tags validated.
What happens if I leave the UAE without getting my Tax Free tags validated? How do I get my refund?
To validate your tags, you would need to return to the UAE within 90 days from the date of getting your Tax Free tag. However, you must make sure that the goods are still unused and in their original packaging. You must also have carried out the standard export validation process when you left the UAE. If you did not, you will not be able to get your refund once you leave the UAE.