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VAT Refund in UAE - Guide for Tourists


Page update - Sep 14, 2022

How to get the refund on spent money in Dubai? What is a VAT refund? How to use it? What are the important features? Read the detailed answers on this page.

This page is useful for tourists who already have the experience of VAT refunds in other countries, as well as for those who are new to the subject. The figures and other data in this review wes updated in September 2022. By the way, the refund fee and the maximum amount have recently been raised.

First, we'll talk about the features of VAT refunds in the UAE, and at the end we'll give a complete instruction for tourists.

Latest news, September 14, 2022

On September 14, 2022, the UAE FTA (UAE Federal Tax Authority) announced that the VAT refund procedure will now become fully digital. That is, there will be no need to save the receipts from stores. The receipts will be registered in the database, and only the passport will be needed to get the refund. However, they did not give any more details.

The main question is, when will it be? No one knows yet. Khalid Ali Al-Bustani, head of FTA UAE, said that, "The system is already activated and will become available with 95% of sellers within a year".

This is the first such electronic VAT refund system in the world! Congratulations to the UAE on its undoubted success!

Warning!!! This fully electronic system is still in the process of being launched. That is, there will be two systems running in parallel - "paper" and "paperless". We will describe both systems.

Refund under the old "paper" system

On January 1, 2018, the United Arab Emirates introduced a 5% VAT tax, and until then the UAE had no trade taxes at all - no VAT, no GST, no Sales tax.

On November 18, 2018, the Tax Refund for Tourists Scheme (FTA UAE Decision No. 2 of 2018) was launched. The exclusive operator of the system is Planet, or rather its subsidiary company, controlled by the FTA UAE (UAE Tax Authority).

Planet terminals are now installed in departure areas of airports and seaports across the country, also there are some machines in large malls. Look for terminals with the big "Planet" sign on them. The system is fully automatic.

Travelers can now get a 4.76% refund on their purchases in the UAE. At first look it seems great. But there are VERY many nuances to this procedure. The VAT refund procedure in the United Arab Emirates is very different from the procedures in other countries. Read this page to the end, we will tell you everything in detail.

But first, we'll tell you briefly and clearly - what VAT is and why it is refunded to tourists.

Briefly - what is VAT?

It is a "value added tax". This tax is paid on the price of goods (almost any) from the moment of creation to the moment of sale to the end consumer.

An example (simplified, but easy to understand). A factory has produced a frying pan and sold the frying pan to a trading company. The factory must pay VAT on the frying pan to the government. The trading company sold the frying pan to a retail store. The trading company must pay VAT to the government. The retail store then sold the frying pan to a consumer. The retail store must pay VAT to the government.

Companies do not pay VAT in full. They pay the difference between incoming (from their customer) and outgoing (paid to their supplier) VAT. The main VAT payer is the end consumer, that's you and me! We pay 100% of this tax.

VAT is a tax on consumption!

Following the logic of the VAT working rules, the tax should only be paid on goods that are consumed inside the country. If the goods are taken out of the country, then the goods should not be taxed. For this reason, many countries (not all) have a procedure for refunding VAT to tourists upon departure.



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Feature 1 - why 4.76% if the rate is 5%?

VAT is counted as: "price of goods (full) = price of goods (without VAT) + 5%".

Accordingly, "the amount of VAT = the price of goods (full) - the price of goods (full)*100/105.

If you calculate according to the formula above, you get 4.76%. This is the percentage of money from purchases that you will be able to get back. That is if you have paid 1000 dirhams for the purchase, then you can get a refund of 47.6 dirhams. But in fact, there are commissions, and you will get less. We will talk about the commissions below.

Feature 2 - not all retail stores are participating in the VAT refund program

Not all retail stores are members of the Tax Refund for Tourists Scheme. If a store is not a member, no refund is possible at all.

Participating stores usually have "TAX REFUND" or "RTS" or "Planet TRS" signs. Some participants don't hang signs, then you have to ask the retailer. Fortunately, in the UAE, most stores have now joined the program. Even the supermarket chains Carrefour and Lulu are participating.

Feature 3 - Not all goods participate in the program

The goods must not have been consumed in the UAE. For example, if you bought clothes, they must be new and with labels at the moment of your departure. Customs has the right to check - to require to show receipts and goods from which VAT refund is received. Do not forget this to avoid troubles at customs control.

Accordingly. VAT on the hotel payment cannot be refunded, as the hotel services were received in the UAE. VAT on receipts from restaurants, cafes or fast food outlets cannot be refunded for the same reasons. Similarly with transportation expenses.

VAT on payments for water parks, amusement parks, excursions, sightseeing tickets also cannot be refunded, since the services were received in the UAE. How to save money in this case, read in the review "How to save money on entertainment in Dubai".

Feature 4 - limits on the amount

The lower limit for the total amount of the receipt is 250 dirhams. See our article "UAE Money - dirham" for the current exchange rate.

There is no upper limit. But when you get cash, the maximum refund amount is 7,000 UAE dirhams (previously it was 10,000).

Feature 5 - you need to take a Tax Free Tag

You need to tell the salesperson at the store that you want to make VAT refund. The salesperson will issue a special "Tax Free Tag" which will be attached to the receipt. You will need to show your passport to the salesperson. The Tax Free Tag has a QR code on it, which you can scan and find out the status of this refund.

From this moment on you will be able to get a refund on this receipt. If you have not taken a Tax Free Tag, there will be no refund.



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Feature 6 - do not lose or spoil the receipt and Tax Free Tag

Receipt and Tax Free Tag should be saved before you leave the UAE. Often some tourists put receipts in their pockets, where the receipts come in a bad condition. You should not do this. Receipt and Tax Free Tag will be needed to get a refund at the machine at the airport.

Once you receive your refund, do not throw away the receipt and Tax Free Tag. Customs authorities sometimes randomly check tourists. To avoid problems, you need to have with you: 1 - passport; 2 - the item for which the VAT was refunded; 3 - the receipt; 4 - Tax Free Tag.

Feature 7 - Tax Free Tag is valid for 90 days

You must receive your refund within 90 days from the date of the Tax Free Tag. After that, the Tax Free Tag becomes invalid.

Feature 8 - Refunds are made at the machine

There are Planet machines in the international airports in the departure area. The airports in Dubai, Abu Dhabi, Sharjah, Ras Al Khaimah, Al Ain have them for sure. There are such machines in Dubai shopping malls now, which means you can get a refund right away.

Working with the machine is not difficult. First you have to register your passport in the machine. Then you have to register the receipts and the Tax Free Tags. At the end you have to enter your credit card number.

The machines are green with the big "Tax Free" sign on them. See the photo near, click on the photo to enlarge to full screen.

All Planet machines know Arabic, English and Chinese. As for other languages, the situation varies from machine to machine. If your native language is different from the one listed above, then the machine may know it, maybe not. It's a lottery. Read our review "What language is spoken in the UAE".

Feature 9 - cash refunds don't always work

There is an option in the machine to get money in cash. But some tourists say, it doesn't always work. Be sure to have a card in case the cash refund will not work.

Feature 10 - there is a commission!

You will be charged a fee of 15% of the refund amount. In addition the system charges AED 4.8 (previously it was AED 4.5) for processing each Tax Free Tag.

INSTRUCTION of getting a VAT refund

Step 1: Make a purchase of AED 250 or more at a store that participates in the Tax Refund for Tourists Scheme.

Step 2: Ask for a Tax Free Tag to be attached to your receipt. Passport is required, so please do not forget your passport. Keep the receipt and the Tax Free Tag and do not lose it.

Step 3: Before departure, go to the Planet machine. At the machine register your passport and Tax Free Tag(s), enter your card number and get the refund on the card.

Step 4: Keep your receipt and Tax Free Tag, don't lose them. Be prepared to present your passport, the exported goods (for which you received the refund), the receipt, and the Tax Free Tag in case Customs checks occur.

SUMMARY

VAT refunds are clearly not something to worry about and plan for in advance. After all, the refund percentage is small (4.76%), and the procedure is quite complicated. And even more so, you should not go only to those stores that are connected to the system.

Just when you make large purchases, ask the seller, whether he will give the tax free tag? If he does, then great - it will be a nice bonus when you get home. If he doesn't, don't be upset.

Refund under the new "paperless" system

In this case it's simple. When you buy an item, you need to tell the salesperson that you will be making the refund. The salesperson will use your passport to issue an electronic refund recipient (essentially a database entry).

The Planet machine will simply scan your passport, and the system will already know about your purchases and calculate the refund amount itself. Then you'll either have to enter your card details to get the money or get it in cash (depending on the capabilities of the particular machine).

Important to know

- It is not only the lack of receipts that can get you into trouble at customs. Read about other potential problems in our review "What is allowed and disallowed to take out of the UAE" and "Dangers for tourists in Dubai and UAE";

- VAT of only 5% is the main reason why many things in the UAE are cheaper, and why Dubai has already become the shopping capital of the world. Read more on our page "Why goods in the UAE are cheap";

- Read about what exactly is interesting to bring from the UAE in our review "Best gifts and souvenirs from UAE".

Enjoy your vacation in the UAE, and read our interesting pages about this country (see list of pages below).

TIPS

Tips for Tourists in the UAE

IMPORTANT FOR TOURISTS

What to Take for the UAE

What You Should Not Do in the UAE

To the UAE with Kids

Sharks in the UAE

Weather in the UAE by Month

Holidays in the UAE

Are Unmarried Young Women
Allowed to Enter the UAE?

All-Inclusive in the UAE

Power Sockets & Voltage in the UAE

Hotels in the UAE with Own Beach

GENERAL INFORMATION

The UAE - Info, Facts, Figures

What Language is Spoken in the UAE

Population and Citizens of the UAE

History of the UAE

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Ramadan in the UAE

Sheikh Zayed - Father of Nation

Sheikhs of the UAE

GIFTS AND CUSTOMS LAW

What to Bring from the UAE

What You Can and Not Bring In the UAE

What You Can and Not Take Out the UAE

VAT Refund in the UAE

Shopping in the UAE - Why is Cheap

Date Fruits in the UAE

Camel Milk and Dairy Products

Bakhoor and Oud

MONEY AND EXPENSES

Money in the UAE - Emirati Dirham

Currency Exchange in the UAE

How Much Money to Take to the UAE

Food Prices in the UAE

Tourist Taxes in the UAE

Alcohol in the UAE

Cigarettes and Smoking in the UAE

Vape and iQos in the UAE

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Emirati Cuisine - What to Taste

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