December 6, 2023

Tourists to Reclaim VAT at Self-service Kiosks: Federal Tax Authority

UAE VAT for tourists

(Source: WAM)

Abu Dhabi: The Value Added Tax, VAT, Recovery Self-Service Kiosks for Tourists scheme has been expanded to be available at major shopping malls and hotels, in addition to the existing ones at air, land, and maritime entry and exit ports across the UAE, announced the Federal Tax Authority, FTA.

The expansion aims to provide additional services to tourists, enhancing the UAE’s status as a leading destination on the international tourism map. Planet – the company authorised by the FTA to operate the electronic system for the Tax Refunds for Tourists Scheme – debuted nine self-service kiosks in stage one of implementing the plan, setting them up at multiple shopping malls and hotels.

The kiosks are equipped with state-of-the-art technology allowing them to fully process VAT refund requests for tourists.

In a press statement issued today, the Authority explained that the kiosks allow tourists to process their requests to recover VAT from the convenience of their hotel or at major malls in a matter of minutes. Applicants can scan their boarding pass to prove they will be leaving the UAE in the next 24 hours, as well as their original passport (or identity card for GCC nationals), and then follow the simple instructions displayed at the self-service kiosks. FTA revealed that Planet intends to deploy up to 55 new self-service kiosks by the end of 2020 – 25 of which would be stationed in malls and 30 in hotels.

FTA Director-General Khalid Ali Al Bustani asserted that expanding the scope of self-service kiosk for the Tourists Refunds to include malls and hotels in addition to exit ports is part of the Authority’s strategy to continuously develop its services, enhance efficiency and performance, facilitate procedures, and ensure customer happiness, in line with the vision of the UAE’s wise leadership to make the UAE one of the most advanced countries in the world by 2021.

“Our objective from expanding the self-service kiosk is to provide further facilities and additional options for tourists looking to recover taxes,” he added. “Eligible tourists who meet the necessary criteria for reclaiming the VAT they incurred on their purchases in the UAE can process their refund applications from the convenience of their own hotels or from a list of major shopping malls around the country.”

“This latest development further upgrades the services we offer through the electronic system of the Tourists Refund Scheme, which has seen increasing success and a growing number of users taking advantage of its speed and ease of use,” Al Bustani explained. “This establishes the system as one of our most effective tools to promote tourism, and cement the country’s status as a leading tourist destination with world-class infrastructure, sites, and events.”

The FTA Director General noted that taskforces from the Federal Tax Authority are conducting ongoing field inspections to ensure the system is operating in accordance with stringent quality standards and conditions.

The number of digital transactions under the Tourists Refunds Scheme grew to 3.2 million in the period between its launch in November 2018 and the end of 2019. By end of June 2019, the total stood at 1.52 million transactions; the number leaped by 1.68 million applications in the second half of 2019, marking a staggering 110.53 percent growth during that period. Meanwhile, the daily average number of tax refund transactions for tourists grew 2.64 times from 3,720 in the scheme’s first month to 9,830 daily transactions in December 2019.

Moreover, the number of retail outlets linked with the system increased to 12,310 stores across the UAE, while the network of self-service kiosks allowing tourists to recover VAT at exit ports around the country grew to 52 – up by 79.3 percent from the total of 29 kiosks deployed as of July 2019. Planet operates all of these devices, which automate the entire tax recovery procedure.

Tourists can submit their requests to recover the taxes they incurred on purchases in the UAE when they are about to depart from the country. Applicants must submit the tax invoices on their purchases, marked with ‘Tax-Free’ stickers issued by retail outlets registered in the system, along with their passport and credit card. No limit is placed on the maximum amount that can be recovered if said amount is transferred to the tourist’s credit card, however, in the event that the applicant requests a cash refund, then the maximum amount is set at AED7,000 per day. This process can be carried out at self-service kiosks, as well as at tax refund offices located at ports of exit across the UAE.

Cabinet Decision No. (41) of 2018 on Introducing the Tax Refunds for Tourists Scheme; Federal Tax Authority Decision No. (1) of 2018 on the Requirements for Retailers to Participate in the Tax Refunds for Tourists Scheme; and FTA Decision No. (2) of 2018 on the Tax Refunds for Tourists Scheme outlined clear and transparent requirements and standards for processing refund requests for overseas tourists, and enhancing the UAE’s status as a leading destination on the global tourism map.

The Scheme’s electronic system consists of integrated mechanisms to connect retail stores registered with the Authority and wishing to register for the Tourists Refunds Scheme, linking them to the UAE’s ports of entry. This, in turn, allows tourists to apply for tax refunds on their purchases through the system, which operates on the latest technology, if they are eligible to recover VAT as per the terms and criteria specified in Cabinet Decision No. (41) and FTA Decisions No. (1) and (2) of 2018.

The Authority asserted that to be refundable, tax invoices need to have been issued by the retail stores included in the Scheme and registered in the system; these venues can be identified by visibly showcasing ‘Tax-Free’ stickers on their storefronts.

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