How to claim VAT refund in UAE?

If you’re planning to claim a VAT refund in the UAE, understanding the process is crucial. This guide will walk you through the necessary steps, eligibility criteria, and provide practical tips to ensure a smooth refund experience.

How to Claim a VAT Refund in UAE: A Step-by-Step Guide

What is VAT and Who Can Claim a Refund?

Value Added Tax (VAT) is a consumption tax levied on goods and services. In the UAE, VAT is set at 5%. Tourists and businesses can claim VAT refunds under specific conditions, making it important to know if you qualify.

Steps to Claim VAT Refund in UAE

1. Determine Eligibility:

   • Tourists can claim VAT on goods purchased within the UAE if they plan to leave the country within 90 days.
   • Businesses registered for VAT can claim refunds on inputs used for taxable supplies.

2. Collect Necessary Documents:

   • Tourists need original tax invoices and a valid passport.
   • Businesses require tax invoices, import declarations, and proof of payment.

3. Use the Designated System:

   • Tourists should use the Planet Payment System available at airports, seaports, and border crossings.
   • Businesses must file VAT returns via the Federal Tax Authority (FTA) portal.

4. Submit Your Claim:

   • Tourists present goods and documents at designated refund points before departure.
   • Businesses submit claims during the VAT return filing process.

5. Receive Your Refund:

   • Tourists can receive cash or credit card refunds.
   • Businesses will have refunds credited to their bank accounts.

Key Considerations for VAT Refunds

• Time Frame: Tourists must claim refunds within 90 days of purchase. Businesses should file within the tax period.
• Minimum Spend: Tourists need a minimum spend of AED 250 per invoice to qualify.
• Goods Condition: Items must be unused and in original packaging for tourist refunds.

Practical Examples and Tips

• Tourist Example: A tourist buys a luxury handbag for AED 5,000. The VAT is AED 250. To claim this, they must present the handbag, invoice, and passport at the airport refund point.
• Business Example: A UAE-based company imports raw materials worth AED 100,000. The VAT on this is AED 5,000, which can be claimed back if the materials are used for taxable goods.

Common Challenges and How to Overcome Them

• Incomplete Documentation: Ensure all invoices are VAT-compliant and retain copies.
• Missed Deadlines: Set reminders for refund claim deadlines to avoid missing out.

People Also Ask

How Long Does It Take to Process a VAT Refund in UAE?

For tourists, VAT refunds are processed almost immediately at the point of departure. Business refunds can take up to 60 days after filing the VAT return.

Can I Claim VAT Refund for Online Purchases in UAE?

Yes, tourists can claim VAT refunds for online purchases if the items are delivered within the UAE and meet the eligibility criteria.

What Happens If My VAT Refund is Denied?

If denied, check the reason provided by the FTA or refund service. Common issues include missing documents or non-compliance with refund conditions. Correct and resubmit if possible.

Are There Any Fees for VAT Refunds in UAE?

Yes, a small processing fee is deducted from tourist refunds. This fee varies depending on the refund method chosen.

Can I Get a VAT Refund on Hotel Stays in UAE?

No, VAT refunds do not apply to services like hotel stays or dining in the UAE.

Conclusion

Claiming a VAT refund in the UAE can be a straightforward process if you understand the requirements and follow the steps outlined. Whether you’re a tourist or a business, ensuring you have the right documentation and meet the eligibility criteria is key. For more detailed guidance, you might consider visiting the Federal Tax Authority’s website or consulting with a tax professional.

For further reading, explore topics like "How to Register for VAT in UAE" or "Understanding VAT Compliance for UAE Businesses."