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Claiming VAT Refunds for Tax-Free Shopping in the UAE
Introduction
Value Added Tax (VAT) is a tax that is added to the price of most goods and services. When you buy something, you usually have to pay this extra tax on top of the main cost. In the United Arab Emirates, the VAT rate is 5%. This means that when you make a purchase, an extra 5% is added to the price you pay. As a tourist visiting the UAE, you can get a refund of this 5% VAT on your purchases. This allows you to essentially shop tax-free and save money on your trip.
Eligibility Criteria
To be eligible for a VAT refund, you must meet the following criteria:
- You must be a tourist visiting the UAE on a valid visa. This means you must hold a passport from a country other than the UAE and have spent less than 6 months in the country during your current visit.
- You must export the purchased goods out of the UAE within 90 days from the date of the tax invoice.
- You must request the refund within one year from the date of exporting the goods.
Minimum Purchase Amount
- There is a minimum purchase amount of AED 250 (approximately $68) to qualify for a VAT refund.
Excluded Goods
A VAT refund is only applicable for goods that are eligible under the Tourist Refund Scheme. Certain items are not eligible, such as:
- Goods that are fully or partially consumed in the UAE
- Goods that are prohibited or restricted for import/export
- Goods that are subject to excise tax
Refund Percentage
If you are qualified for the VAT refund scheme, you will receive 85% of the total VAT amount paid, minus a fee of AED 4.80 per tax-free tag.
Refund Limits
- The maximum cash refund amount is AED 35,000 per tourist per day. If your refund exceeds this limit, the additional amount can be refunded to a credit/debit card.
- By meeting these eligibility criteria and making purchases above the minimum threshold at participating retailers, tourists can save significantly on their shopping expenses in the UAE through the tax-free program.
Making Tax-Free Purchases
When making purchases at participating stores, look for the “Tax-Free” or “Premier Tax Free” logo. Inform the shop assistant that you would like to claim a VAT refund.
They will then process your purchase through the Planet Payment system, which creates a digital tax refund form. Make sure to keep your tax invoice and tax-free tag safe.
Validating the Refund
Before leaving the UAE, you must validate your tax refund at the airport. Go to a Planet validation point, which are located in three different areas of Zayed International Airport in Abu Dhabi.
Present your tagged receipts and goods for inspection if required.Once validated, you can choose to receive the refund in cash (up to 10,000 AED) or have it credited back to your credit/debit card.
Receiving the Refund
Once your tax refund is validated, you can choose to receive the refund in cash (up to 10,000 AED) or have it credited back to your credit/debit card. Please note that there may be additional fees or exchange rate charges depending on your chosen refund method.
By following these simple steps, tourists can save 5% on their shopping expenses in the UAE through the tax-free program. This can result in significant savings, especially for larger purchases.
