WORKSHOP ON VAT REFUND SCHEME FOR TOURIST IN UAE
A workshop was organised by the Federal Tax Authority in cooperation with Planet, the exclusive tourist refund operator for tourist refund scheme which is to be rolled out in the last quarter of 2018 . The aim of this workshop was to familiarise the retailers and members of the business community with the UAE’s new VAT refund scheme for tourist . More than 250 members of the business community participated in the same in which they were briefed on the steps, processes and the procedures associated with registering under the UAE’s new VAT refund scheme for tourists.
INITIATIVES THAT HAVE BEEN ALREADY TAKEN BY THE FTA UNDER TOURIST REFUND SCHEME
The FTA has already announced the conditions and procedures for the tourists who would claim VAT refunds when leaving the UAE. The tourists would however be able to reclaim the taxes that they have paid on their purchases through an electronic system which would be connected to the FTA, airports, land and sea ports of entry upon exiting the country. In order to register and participate in the VAT refund scheme for tourists, the retails are required to meet the requirements.
Furthermore, the FTA has also issued guidelines that the minimum limit to claim a VAT refund is AED 250 and is available for non UAE residents above the age of 18 years.
PLACES WHERE VAT REFUND SYSTEM HAVE BEEN MADE AVAILABLE
The scheme that is to be implemented from November would initially be available at airports in Dubai, Sharjah, Abu Dhabi and would eventually extend the scheme to 12 exit points in the UAE at Al Maktoum Airport, Abu Dhabi Port Zayed, Al Ain Airport, the Al Ain land border, Fujairah Airport, RAK Airport, Dubai’s Mina Rashid Harbour and the Hatta and Al Ghuwaifat border crossings.
CABINET DECISION No 41 OF 2018
The FTA has recently introduced the Cabinet Decision No. (41) of 2018 On the Tax Refunds for Tourist Scheme in order to support the vision of the UAE’s wise leadership and diversification efforts.
CONDITIONS TO BE MET
To be eligible for a refund of Tax under the Scheme , the person is required to meet the following conditions :
The conditions that have been mentioned under Article 68(2) of Cabinet Decision No 52 of 2017 are met
The goods should be purchased from the retailer who has participated in the scheme
The goods that have been purchased from the retailer are in accordance with the requirements that have been determined in a decision issued by the Chairman
The export of goods should be conducted as per the requirements determined in a decision issued by the Chairman
The goods have not been excluded from the scheme by the authority
A retailer who meets the requirements of participation that has been specified by the Authority has an option of participating in the scheme
TAX REFUND IN CASE OF OVERSEAS TOURIST
The retailer is required to provide the overseas tourist with necessary documentation for refund claim under the scheme determined by the authority including a tax invoice along with the particulars governed in Article 59 of Cabinet Decision No 52 of 2017 when he indicates his intention to the retailer participating in the scheme to make a tax free purchase.
A refund for tax can be made directly by the overseas tourist from the operator who would provide refund upon receipt of satisfactory and sufficient evidence stipulated by the Authority after which a refund of tax can be made to the overseas tourist.
The operator can charge fees for the administration of refund under the scheme and can deduct such fees from the amount to be refunded to the overseas tourist in accordance with the decision issued by the Chairman provided that the charged fees shall not exceed the amount approved by the Cabinet.
The operator is required to collaborate with Customs Department in the state in the cases where the overseas operator is required to present the goods on which he is claiming refund and which require validation and inspection as per the conditions stipulated by the Authority.
The customs department will be required to cooperate with the Authority and the operator with respect to validation and inspection as per the conditions stipulated by the authority.
The operator would be entitled to seek reimbursement of the tax amount refunded directly from the retailer who sold the relevant goods to the overseas tourist in case of the operator correctly issuing a refund in respect of tax free purchase to an overseas tourist.
The retailer would be able to treat the amount of tax as reduction of output tax that arises in the tax period in which refund was paid to the overseas tourist in case of retailer correctly reimbursing the amount of tax to the operator in accordance with this article.
POWER OF THE FEDERAL TAX AUTHORITY
The authority is empowered to :
Determine the requirements including procedural, evidential, verification, documentation and record keeping requirements that are required to be met by the overseas tourist, retailer, operator and any other person for application of the scheme
Enter into arrangements with any person and to stipulate the conditions and procedures necessary for the operation of the scheme
The scheme uses advanced technology, has an integrated electronic system that connects the retailer with exit points and is based on the best international practices. The main aim with which it has been designed is to promote seamless and efficient transactions.