Abu Dhabi, UAEWednesday 21 August 2019

UAE retailers urged to register for tourist VAT refund scheme

Online system makes it easier for UAE visitors to recoup cash

The entrepreneur asks if he should wait until the turnover of the new entity reaches the voluntary registration threshold or the mandatory limit. Photo: iStockphoto.com
The entrepreneur asks if he should wait until the turnover of the new entity reaches the voluntary registration threshold or the mandatory limit. Photo: iStockphoto.com

Retail outlets in the UAE have been asked to register in the digital network of the VAT refund scheme for tourists ahead of a rollout later this year.

The programme will later identify specific places tourists can apply for a refund and easily recover the amount they are eligible to.

The UAE introduced a 5 per cent Value Added Tax on goods and services in January this year.

The Federal Tax Authority on Saturday cautioned that a retailer’s membership in the Tax Refund Scheme for Tourists would be revoked if they failed to meet specified obligations.

The authority outlined conditions that must be met before connecting to the scheme, including that the retailer should have already registered with the authority for VAT and have a tax registration number, the supplier’s sales of goods must not be excluded from the refund scheme and the retailer must submit a request to participate in the programme.

Participating traders must also meet the financial credit requirements specified by the system operator, be committed to submitting tax returns and pay due taxes regularly.

There had been a surge in demand for registration in the scheme, according to FTA director general Khalid Ali Al Bustani.

Workshops and seminars have been organised by the FTA along with Planet, the global operator of the refund system, to introduce retailers to procedures that will connect them to the digital network.

A meeting will be held between the system operator and representatives of retail shops on Tuesday in Ajman followed by meeting with the chambers of commerce and industry in Abu Dhabi and Dubai.

Retailers will then be provided the technology to link their outlets to the scheme.

This is part of an extensive awareness campaign that explained the scheme in detail along with sessions to address concern raised by registered businesses, Mr Al Bustani said.

The measures follow a July cabinet decision that defined transparent procedures to refund VAT to people who are not residents but visitors to the UAE, he said.

Mr Al Bustani said the integrated system would provide a direct connection to all shops and outlets across the UAE.


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“The system operator will co-ordinate between retailers registered in the tax system and wishing to register for the scheme, connect them with ports of entry and exit all around the UAE,” he said.

“This, in turn, allows tourists who are eligible for a tax refund to request a refund for taxes incurred on their purchases through a state-of-the-art digital system.

“Planet will make agreements with retailers to equip them with the technologies needed to be part of the scheme, which link these business to the digital systems of the Federal Tax Authority, as well as airports and land and sea ports.

“The scheme creates designated places for tourists to apply for a tax refund and easily recover the eligible refundable amounts, which will be accurately calculated through the advanced digital system.”

Gary Byrne, a director at Planet, reported “strong enthusiasm” from retailers, outlets and shops

across the country to register.

He asked retailers to connect by using a merchant application portal that can be reached via www.planetpayment.ae.

Updated: September 22, 2018 04:11 PM