In most of the countries, a specialized incentive mechanism is put in place to minimize the overall cost of tourists with the objective of increasing the tourism in their country. UAE, especially Dubai, being one of the most sought after tourist destinations, the UAE VAT Executive Regulations are provisioned with ‘Tourist refund scheme’. In this article, we will discuss on tourist refund scheme and tax refund details to be furnished in VAT Return form 201.
Under this scheme, the VAT paid by the overseas tourist is refunded. However, the tax refund under the tourist refund scheme is subject to fulfilment of certain conditions.
Before discussing the applicable conditions for tourists’ refund, let us understand who is an overseas tourist.
Who are Overseas Tourists?
For purpose of VAT in UAE, an overseas tourist means, any natural Person who is not a resident in any of the Implementing States and who is not a crew member on a flight or aircraft leaving an Implementing State.
Conditions for Tax Refund for Tourists Scheme
For purpose of VAT in UAE, an overseas tourist means, any natural Person who is not a resident in any of the Implementing States and who is not a crew member on a flight or aircraft leaving an Implementing State.
- The Goods which are subject to the tax refunds for tourists’ scheme must be supplied to an overseas tourist who is in the State during the purchase of the Goods from the supplier
- At the date of supply, the overseas tourist intends to depart from the State within 90 days from that date, accompanied by the Goods
- The relevant Goods are exported by the overseas tourist to a place outside the Implementing States within 3 months from the Date of Supply, subject to such conditions and verifications as may be imposed by the Authority
VAT Return Filing – Tax Refund for Tourists Scheme
In VAT Return form 201, a separate box ‘Tax Refunds provided to tourists under the tax refunds for Tourists Scheme’ is made available under ‘VAT on Sales and All other outputs’. This is applicable only for businesses who are registered and enrolled under the official tourists refund scheme:
As shown in the above image, you need to mention the value of any tax refunds provided to tourists under the tax refunds for tourists scheme and the amounts reported in this box should always be in negative. This will reduce your total output tax liability.
For businesses who are not registered and enrolled under official tourist refund scheme, the box 2 will not be applicable. In such case, you need to mention nil values (0) which are auto-populated.
Key Points for filing Tax Refund details in VAT Return Form
- Insert all amounts in United Arab Emirates Dirhams (AED)
- Tax Refund for Tourists scheme is applicable for business who are registered and enrolled under the scheme
- Others (who are not enrolled), need to enter nil values (0) which is auto-populated
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