UAE VAT refund: Tourists don't need physical receipts to claim a refund
Federal Tax Authority introduces what is said to be a 'world's first'
Dubai: The UAE's Federal Tax Authority has launched a 100 per cent digital tax refund scheme, said to be the world's first. The move is set to 'transform the way tourists enjoy their travel to the UAE', according to FTA.
It was in 2018 that the FTA launched the tax refund scheme for tourists, whereby they can claim a refund on VAT paid on purchases they made during their stay in the UAE. Recovery of payment was done through a fully integrated e-system that connects retailers registered in the ‘Tax Refund for Tourists Scheme’ with all ports of entry and exit from the UAE.
With the latest initiative, the FTA aims to make this process completely paperless for tourists in the UAE. The new solution is integrated electronically between retail outlets and the tax refund scheme, to ensure a 'seamless' digital process of issuing, sending, modifying, and saving invoices for tourists. The retail outlets will start issuing e-receipts for a coherent claiming experience for tourists.
Around 95 per cent of retailers will be joining the growing list of companies offering e-invoices in a year. However, many major retailers have already been onboarded. Officials estimate more than 3.5 million traditional paper invoices will go digital.
“The biggest challenge was tourists’ need to carry a lot of paperwork,” said Kahlid Ali Al Bustani, Director-General of UAE FTA. “So when the tourists make a purchase, they have a printed invoice with a sticker which shows the reference number of the tourist's refund code and when they arrive at the airport, the paperwork will be checked to issue a refund. And this is a lengthy process.”
“Over the past year, we worked on a plan to introduce this scheme where tourists' refunds will be electronically generated.”
Tourist VAT refund transactions increased by 104.15 per cent and the number of transactions doubled to 2.31 million during the first eight months of 2022, said Al Bustani. The total value of tourist VAT refunds increased by 113.48 per cent during the January-August period of 2022 compared to the same time last year.
Self-service kiosks
Al Bustani said that the electronic tax-refund system is integrated for purchases at a range of hotels, shopping centers, malls and other retail locations where tourists can scan their passports and claim their refund.
“The efficiency of the process is very quick and tourists can always check about their refunds amounts on the Planet portal once the invoice is posted,” he said
Planet has launched over 100 kiosks across the country and plans to add more.
“The aim always has been to get to deploy more self-service kiosks. It makes the customer journey much simpler and smoother,” said Eyad Al Kourdi, general manager, Planet Tax free. “It's a very easy process - firstly, you scan your passport, then you will see your transactions, after which you can select your preferred refund method and you're done.”
After initiating the refund process, the amount will be transferred to the account/card within 10 working days.
Al Kourdi claims that the entire refund process is done in less than three minutes. Planet staff will be present at the kiosks at the airport to assist tourists with the process.