The UAE VAT refund scheme for tourists allows tourists to reclaim the VAT incurred on goods purchased through approved tax-exempted stores registered with the Federal Tax Authority (FTA). The Scheme has undergone many changes and updates over the years with the FTA introducing many regulations from time to time. The FTA has now issued a new update on the Maximum Amount of Cash Refund Under the Refunds of VAT for Tourists Scheme.
VAT consultants in Dubai can help you with further information on how to benefit from the refund scheme. Let’s have a look at the update made by the FTA on the maximum amount of cash refund as per the VAT refund scheme for tourists.
What’s the Maximum Amount of Cash Refund?
The FTA issued Decision No. 6 of 2022 to fix the maximum amount of cash refund under the UAE VAT refund scheme for tourists. As per the Decision, the maximum cash refund under the UAE VAT refund scheme will be AED 35,000 per overseas tourist per 24 hours. As per the previous decision (Decision No. 1 of 2019), the maximum amount of cash refund was AED 7,000 per Overseas Tourist per 24 hours. Consult with VAT consultants in Dubai for further assistance.
Cancellation of Conflicting Provisions
The FTA decision states that any provision which is contrary to or inconsistent with the new Decision will be abrogated. Moreover, the FTA Decision No. 1 of 2019 on the Maximum Amount of Cash Refund Under the Refunds of VAT for Tourists Scheme also stands abrogated. Tax agents in Dubai can offer more insights into the new legislation.
When Will the New Decision Come into Force?
As per the FTA Decision, the new update will come into force from September 1st, 2022. Consult with VAT consultants in Dubai for more information on this.
Conditions for Tourists to Apply for UAE VAT Refund Scheme
The new FTA Decision has set the maximum cash refund under the UAE VAT refund scheme for tourists as AED 35,000 per overseas tourist per 24 hours. However, the beneficiaries of the Decision must also understand the conditions to apply for the tourist VAT refund scheme in the UAE. However, it is advisable to talk to tax agents in Dubai before making any decision regarding the refunds. The key conditions are stated below:
- The purchase of goods must be made by the tourist from retailers participating in the Tax Refunds for Tourist Scheme
- Tourists must buy only the goods that are supplied within the UAE borders
- Tourists are not allowed to buy goods that are excluded from the UAE Refund Scheme
- The refund will be available for a tourist if she or he has an explicit intention to leave the UAE within 90 days from the date of supply with the purchased goods
- The goods bought by the tourists need to be exported out of the UAE within three months from the date of supply
- The purchase and export of goods must be made in line with the requirements and procedures of the FTA
Conditions for Retailers to Participate in the UAE VAT Refund Scheme
Apart from the tourists, the retailers are also required to meet certain requirements so that they can be part of the UAE VAT refund scheme for tourists. Tax agents in Dubai can help the retailers to meet the FTA”s requirements:
- The retailer must be a VAT registrant in the UAE
- The participating retailer should have a tax registration number (TRN)
- The supplier’s sale of goods should not be excluded from the scheme as determined by the FTA
- The retailer needs to submit a request to be part of the scheme as determined by the FTA
- The retailer should meet financial credit requirements specified by the operator of the scheme
- The retailer should be committed to the prompt payment of VAT returns
How can VAT Consultants in Dubai Help You?
Both retailers and tourists must be aware of the new updates by the FTA on the UAE VAT refund scheme for tourists. The best VAT consultants in Dubai such as Jitendra Chartered Accountants (JCA) can assist the beneficiaries and participants of this scheme to stay compliant with the FTA norms. JCA offers bespoke VAT consultancy services in Dubai to enable businesses to ensure swift VAT compliance.
We have an FTA-approved tax agent in Dubai who can help you to assess your present tax position, assist in obtaining VAT refunds, prepare VAT Voluntary Disclosures and clarification requests, advise on the appropriate tax treatment etc. We can also represent you in front of the FTA as registered tax agents in Dubai. Get in touch with our tax consultants to discuss your specific requirements and decide the way forward.