Tourists in UAE will be getting back their VAT after the authorities decide to refund it, according to the Federal Tax Authority’s top official, Khalid Bustani. A company will be given the responsibility to handle tourist refunds.
“We have tender for the selection of a tourist refund operator, and we are in the final stages now. We are waiting for the final approvals in order to finalise the contract with the operator,” Al Bustani, who is director-general of the Federal Tax Authority (FTA), said.
Acknowledging the critical role that tourism plays in contributing to the country’s economy, Al Bustani said: “Tourism is important to the UAE, and we’re aware of the importance of having a tourism refund.”
He also added that the selection process needed to be professional and transparent. “To have a tourist refund system, we have to be professional about how we implement this system in accordance with best practice,” Al Bustani added.
The FTA denied to reveal about the favourites in the bidding process. Tourists visiting the UAE will be able to claim back value-added tax (VAT) on purchases they make whilst on holiday in the country, according to the FTA’s executive regulations.
The regulations do not, however, go into details on how this process would work. However, it is clear that the refund will be applicable only to those visiting UAE from outside GCC states.
Towards the end of last year, the FTA suggested that the exact mechanism for claiming back VAT would be agreed upon and announced by the UAE’s cabinet in the following months.
According to the executive regulations, the following conditions will apply to the tax refunds for tourists scheme: The goods must be supplied to the visitor whilst he or she is in the country, at the time of purchase; the visitor must be intending to leave within 90 days of purchase; and the visitor must be from outside the GCC.
The cabinet might also publish a list of goods that will not be eligible for refunds.