Tourist Refund Scheme under VAT | VAT Refund for UAE Tourists

Tourist Refund Scheme in UAE


The UAE is a major shopping destination globally. As a move to encourage tourists visiting UAE, the VAT rules provide for a tourist refund scheme, under which the VAT paid by tourists on purchases in UAE will be refunded to them. While the tourist refund scheme has not been implemented in UAE yet, let us understand the provisions and applicability of the tourist refund scheme.

What is the tourist refund scheme?

The tourist refund scheme in UAE is a VAT refund scheme applicable for 'overseas tourists' visiting UAE. The VAT paid by overseas tourists on purchases made in UAE will be refunded to them.

Who is an 'overseas tourist'?

The term 'overseas tourist' means a natural person who is not resident in any of the GCC VAT implementing States and who is not a crew member on a flight or aircraft leaving a GCC VAT implementing State. Hence, tourists from a GCC VAT implementing State and crew members on a flight or aircraft leaving a GCC VAT implementing State are not included here.

What are the conditions to be eligible for this scheme?

The conditions to be fulfilled to be eligible for the tourist refund scheme in UAE are:

  • a.The overseas tourist should be in UAE during the purchase of the goods from the supplier- This means that the tourist claiming refund of VAT should be physically present in UAE at the time of purchase of the goods.
  • b.The overseas tourist intends to depart from UAE within 90 days from the date of purchase of the goods, accompanied by the goods- This means that the tourist claiming refund of VAT should leave from UAE within 90 days from the date of purchase of the goods, along with the goods.
  • c. The goods are exported by the overseas tourist to a place outside the GCC VAT implementing States within 3 months from the date of supply- This means that the goods purchased by the overseas tourist should be moved to a place outside the GCC VAT implementing States within 3 months from the date the goods are purchased.

Hence, the tourist refund scheme is a very attractive scheme for tourists visiting UAE. It has been designed to provide an incentive for tourists to shop in UAE. It is expected that it will be designed in a manner that tourists will be able to collect the refund of VAT at the time of departure from the airport, similar to the EU (European Union). This scheme is currently not implemented, as the Government is in the process of conducting a feasibility study on it. As a result, the details of the process for tourists to claim refund, the date from which it is implemented, etc. are still not known. Hence, tourists visiting UAE before the implementation of the tourist refund scheme will not be able to recover VAT paid on purchases made in UAE. Another important point to note is that the tourist refund scheme in UAE is not applicable for tourists from GCC VAT implementing States. They will not be able to recover the VAT paid on purchases in UAE.



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