Navigating VAT Refunds for Tourists in Dubai: Comprehensive Guide

Dubai, with its breathtaking skyline, luxurious shopping malls, and vibrant cultural experiences, stands as a top destination for tourists worldwide. Dubai’s shopping landscape is defined by expansive and opulent malls, offering a haven for avid shoppers and fashion enthusiasts seeking renowned global brands.

Yet, let’s acknowledge the truth – all the glamour can take a toll on your wallet. Fortunately, there’s a silver lining: VAT Refund for tourists. As a tourist in Dubai, you have the opportunity to reclaim the Value-Added Tax (VAT) on your purchases. This all-encompassing guide will walk you through the complete process of securing VAT refunds by tourists in Dubai, guaranteeing a smooth and gratifying shopping experience.

In Dubai, the standard VAT rate is 5%, and is applicable to various goods and services. The Federal Tax Authority (FTA) of UAE has partnered with Planet, a specialised service provider tasked with administering the Tourist Tax Refund Scheme. Planet is a fully integrated electronic system connected with popular retail outlets (more than 13,800 stores) registered with the VAT refund scheme.

To avail this tax return, tourists must meet specific criteria and adhere to a defined procedure. As a service provider, Planet’s role is to streamline this process, ensuring it is straightforward, efficient and financially convenient for tourists.

Eligibility for VAT Refunds:

As a visitor to Dubai, you become eligible for VAT refunds if,

• you are a non-resident tourist aged 18 years and above
• you have purchased eligible goods from registered merchants in Dubai and across the UAE
• the purchased goods are taken out of the country within 90 days from the date of purchase.

the purchasing and exporting processes align with the requirements and procedures set forth by the FTA.

It’s important to note that crew members on a flight, aircraft, or ship are not entitled to receive VAT refunds.

Participating Retailers and Criteria:

Not all retailers participate in the VAT refund scheme. Tourists should look for outlets that display the “Tax-Free” shopping logo. Additionally, the minimum purchase amount required to be eligible for a refund varies, so it’s essential to check with the specific retailer.

Goods Eligible for VAT Refunds:

Certain goods are eligible for VAT refunds, such as clothes, electronics, and souvenirs. However, services, consumables, and goods that have been used or partially consumed during the stay are generally excluded.

VAT Refund Process:

Prior to initiation, it’s essential to note two key aspects:

• The process is entirely digital.
• A minimum expenditure of 250 Dirhams is required.

The steps:

1.Request Tax Invoice and VAT refund:

Tourists can request a tax invoice at the time of purchase. This invoice must meet specific criteria outlined by the FTA. Next, the tourists have to request a VAT refund claim from the retailer by providing a valid passport or relevant travel document.

2.Retailer initiates VAT refund claim:

This is the procedure in which the retailer initiates a VAT refund claim. Once you present your valid passport, the merchant will input your details into Planet’s ‘Dubai Tax-Free System’, generating a QR code sticker.

3.Dubai Tax-free tag:

After printing the QR code sticker (Dubai Tax-Free Tag), the retailer affixes it to the back of the original purchase receipt. Before leaving the store, ensure that the name on your Dubai Tax-Free Tag matches to that on your passport to avoid any discrepancies leading to a refusal of your Dubai tax refund

4.Validation at the Airport:

Before checking in for the departure flight, tourists have to validate their tax free purchases by presenting the purchased goods, tax invoice, tax refund tags and passport.  The QR code needs to be scanned or passport number needs to be entered to initiate the process.

This can be done at several locations such as –

• Self-service kiosks at the airport: Positioned near exit points.
• Kiosks in shopping malls or hotels: A valid online boarding pass, indicating a flight within the next 24 hours, is required.
• Validation desks with attendants: Found at airports and land borders. Departure must be scheduled within the next 6 hours.Note: Validate your VAT refund only when you are prepared to exit the UAE within 6 hours. Failure to leave within this timeframe will result in the cancellation of your refund, necessitating a restart of the validation process. Arriving early at the airport allows ample time for completing the VAT refund procedures, reducing stress before departure.

How to Claim VAT Refund in UAE for Tourist: 

Tourists can choose to receive their VAT refund through cash, credit card, or bank transfer. For refunds made through a bank card payment, anticipate the funds to be returned to your account in approximately nine days. Conversely, if the payment was made in cash, the refund process might take only about three minutes. A processing fee may apply depending on the chosen refund method. The VAT Refund Scheme allows you to claim 85% of the total VAT amount paid, minus a fee of AED 4.80 per Tax-Free Dubai Tag. The total amount will automatically be calculated throughout the refund process.

VAT Refund in Dubai Airport Apps and Services:

To enhance the efficiency of the VAT refund process, tourists can explore mobile apps and online services provided by VAT refund companies. These platforms often allow for pre-validation of invoices, reducing processing times at the airport.

In conclusion, the VAT refund scheme in Dubai not only allows tourists to enjoy significant cost savings on qualifying purchases, enhancing the allure of their shopping experiences, but it also plays a pivotal role in fortifying Dubai’s standing as a premier shopper’s paradise.