Conditions for Retailers to Register under VAT Refund Scheme

Tally Solutions | Updated on: December 30, 2021

In our earlier article Proposed Tourist VAT Refund Scheme in UAE VAT, we have discussed the proposed electronic system of tourist refund scheme. In continuation of the proposal, the Federal Tax Authority has outlined the conditions for retailers to register under the tourist system. The Authority urges all retail companies to register and connect to the digital system of the tax refund scheme for tourists.

The Federal Tax Authority (FTA) has invited retailers, outlets and shops registered for Value Added Tax (VAT) to register in the digital system of the tax refund scheme for tourists, which will come into effect as of the fourth quarter of this year

If the reports are to be believed, the responses from the retailers are overwhelming and there is a great turnout for tourist refund system – Proposed to be one of the most advanced of its kind in the world.

In this article, we will understand the conditions for retailers to register under the tourist refund scheme and the FTA’s plans for connecting the retailers on the tourist refund scheme.

Conditions for Registering under tourist VAT Refund Scheme

The proposed electronic system of tourist refund scheme will be implemented in co-operation with ‘Planet’ the global operator of the tax-free system. The following are the conditions identified for registering under the tourist refund scheme.

The proposed electronic system of tourist refund scheme will be implemented in co-operation with ‘Planet’ the global operator of the tax-free system. The following are the conditions identified for registering under the tourist refund scheme.

• The retailer must be registered with the Authority for VAT and have a tax registration number (TRN)
• The supplier’s sales of goods must not be excluded from the refund scheme, as determined by the Authority
• The retailer must submit a request to participate in the Scheme as determined by the FTA
• The retailer must meet the financial credit requirements specified by the system operator and be committed to submitting Tax Returns and paying due taxes regularly

The retailer’s membership in tax refund scheme will be cancelled if they fail to meet their obligations stated in tax laws or in the contract between the system operator and the retailer.

FTA is organizing workshops and seminars in cooperation with Planet to introduce retailers already registered for VAT to the simple procedures for registering in the digital system of the refund scheme.

As a first step towards creating awareness on retailer’s registration, an extensive awareness campaign in cooperation with Planet, the system operator for the tax refund scheme for tourists, and Chambers of Commerce and Industry has been carried out around the country from September 2018 onwards. So far two workshops were organised in the Chamber of Commerce and Industry in both Abu Dhabi and Dubai and both the workshops have received tremendous response from the businesses.

The System operator ‘Planet’ will make agreements with retailers to equip them with the technologies needed to be part of the scheme, which links these businesses to the digital systems of the Federal Tax Authority, as well as airports and land and seaports.

FTA in its drive to maximize the registration, as developed a comprehensive plan to introduce the new scheme and its registration requirements and conditions, including induction programmes offered through the FTA official website.