- Retailers registered in the Tax Refunds for Tourists Scheme must follow 5 steps if the customer requests to make a purchase under the scheme.
- The Scheme Operator will verify both the export of the goods and refund requests according to the Federal Tax Authority standards.
- The maximum cash amount that can be refunded to a tourist in a 24-hour period is AED 10,000.
- The minimum value of purchases subject to the refund shall be AED 250.
Abu Dhabi, November 12, 2018:– His Highness Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, Minister of Finance, and Chairman of the Board of the Federal Tax Authority (FTA), issued the Decision No. (2) of 2018 on the Tax Refunds for Tourists Scheme, setting out the implementation dates for phases one and two, the procedures for the verification of tourists’ eligibility for the tax refund, the fees charged for refunds and their application, the maximum cash recovery, the minimum value of purchases subject to the refund, and the goods excluded from the refund.
The Decision No. (2) of 2018 comprises of seven clauses and stipulates that Value Added Tax (VAT) refund claims shall be provided by retailers participating in the Tax Refunds for Tourists Scheme as of Sunday, November 18, 2018. An overseas tourist may get a refund of the VAT at the Abu Dhabi, Dubai, and Sharjah International Airports as of next Sunday. The overseas tourist may also recover the VAT at the other airports and land and sea ports in the UAE as of December 16, 2018.
Furthermore, the Decision determined five steps that retailers must follow when a customer asks to make a purchase under the Tax Refunds for Tourists Scheme, the first of which represents conducting the necessary due diligence – as outlined by the FTA and Scheme’s Operator – to verify whether the customer is an “overseas tourist” as per Clause 3 of Article 68 of Cabinet Decision No. 52 of 2017; that they are in the UAE when making the purchase; and that they were present at the retail store along with their purchase invoices when claiming the refund documentation. The procedure also calls for determining if the supply was made in a period not exceeding 90 days on the date on which the refund claim is requested.
Step two requires the retailer to record the customer’s information and details of the purchase – again as determined by the FTA and the Scheme Operator – and to issue the necessary documents for the customer to claim the VAT refund when exporting the goods. As per step three, the retailer must comply with all procedures pertaining to handing over, packaging and delivering goods, according to FTA conditions set for certain goods or categories of goods, as well as meeting other conditions determined in the agreement approved by the retailer to offer tax-free purchases.
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Reference: https://www.tax.gov.ae/12-November-Tourist-Scheme-Allowing-for-refund.aspx