5 min. reading

Complete Guide: VAT Refund in UAE and Dubai

In a world of luxurious malls and limitless shopping, the UAE is a true paradise for shopping fans. And as a bonus to your purchases, the government gives you the opportunity to get back part of the VAT paid using Tax Free. But how to do it? In this article we will look at all the nuances in detail.

Content

The latest 2023 news

In an effort to make the shopping process even more attractive to tourists and locals, the UAE government has taken meaningful steps in 2023. A number of changes have been made to the VAT refund program to make the tax refund process even more convenient and transparent for consumers.

Main changes:

Digitalization of the process: Introduction of an e-refund system that allows users to make requests online, without having to visit physical refund points.
Simplified procedure: Fewer documents to submit and fast approval of requests.
Extensive information support: Official government resources have detailed guides and FAQs to help buyers understand the new system.

VAT

Briefly - what is VAT

VAT (Value Added Tax) is a tax on consumption. It is levied on most goods and services sold for final consumption. This tax is paid by the consumer, but is passed on to the government through the businesses or entrepreneurs selling the goods and services.

History and purpose of the introduction of VAT in UAE

Prior to the introduction of VAT in UAE, most of the country's government revenues depended on oil sales. However, given the fluctuations in global oil prices and the desire for sustainable economic development, UAE decided to diversify its revenue sources.

The introduction of VAT in January 2018 was part of this diversification strategy. The goal was to reduce dependence on oil revenues, strengthen the local economy, and create long-term stability for public services.

Principles of VAT operation

VAT is an indirect tax and its cost is allocated at each stage of the supply chain. Let’s look at the basic principles:

Calculating VAT: When a good or service is sold, the seller adds a certain percentage (in the UAE it is 5%) to the price as VAT. This added value is ultimately paid by the consumer, but is passed on by the government through the seller.
VAT refund: If a company purchases goods or services on which VAT has been paid, it may claim a refund of this amount upon providing appropriate documentary evidence.
Principal Payers: Although the tax is ultimately paid by the consumer, it is the responsibility of the business to collect and remit it to the government. This includes companies, entrepreneurs and organizations that provide goods or services subject to VAT.

Thus, VAT plays a dual role: on the one hand, it is a source of income for the state, on the other hand, it is a mechanism for regulating economic activity and stimulating economic growth.

10 nuances

Ten nuances of the UAE VAT refund program

Navigating the complex VAT refund process, revealing all its intricacies.

AT refund in UAE is a tempting prospect for many tourists who want to get back some of the money they spent. However, the refund process is not without its subtleties. Let's consider ten main nuances of this program.

Nuance 1 – why 4.76% when the rate is 5%?

This is a question that worries many people. The answer is that 5% is the full VAT rate, but a processing fee is deducted on the refund. Therefore, the actual refund is 4.76%.

Nuance 2 – not all stores participate in the VAT refund program

Only those stores that are registered in the Tax Free system can provide you with a refund. Before making purchases, check with the seller for information about participation in the program.

Nuance 3 – not all products participate in the refund system

Some goods, such as food or necessities, are not eligible for VAT refunds.

Nuance 4 – limits on amount

There is a minimum and maximum purchase amount at which a VAT refund can be claimed.

Nuance 5 – you need to take a Tax Free Tag

This is a special label that is given at the time of purchase and must be kept with the receipt to receive a refund.

Nuance 6 – it is necessary not to lose and not to damage Tax Free Tag receipts

These documents are your right to a refund. Without them, the refund procedure is not possible.

Nuance 7 – Tax Free Tag is valid for 90 days

During this time, be sure to claim a refund.

Nuance 8 – refunds are made in the machine

There are specialized VAT refund machines at the airport and some shopping malls. The process can sometimes seem confusing, but follow the instructions on the screen.

Nuance 9 – cash back doesn't always work

Sometimes systems can be overwhelmed and you may have to settle for a refund to your bank card.

Nuance 10 – there is a commission!

Yes, this is an additional fee that is deducted upon refund. It may vary depending on the chosen method of refund.

Knowing all these nuances, you will be able to make the most of the UAE VAT refund system and get back some of the money you spent.

ALGORITHM of VAT refund receipt

Getting a VAT refund may seem like a complicated process, but by following certain steps, you can make the process easy and simple. Let's take a look at the details.

Which documents will be required

Original receipts or invoices are the primary proof of purchase that include VAT.
Tax Free Tag (if applicable) – some stores provide this tag with the receipt, which is necessary for an automatic tax refund at the airport.
Passport – to prove your identity and that you are a foreign national entitled to a VAT refund.
Return flight ticket – to confirm departure from the country.
Bank card or other payment details – in case the refund is made to your bank account or credit card.

Step-by-step process of VAT refund

Preparation: When buying, make sure that the store is participating in the VAT refund program. Ask the seller to provide all the necessary receipts or documents for VAT refund.
Keep your documents safe: Keep all receipts and Tax Free Tags in a safe place before departure.
Visit a VAT refund point at the airport: Before going through customs control at the airport, find a specialized VAT refund point (usually designated as "Tax free").
Submission of documents: Show all required documents, receipts and tickets to the refund clerk.
Verification of goods: In some cases, customs may require you to verify the authenticity of your goods, so make sure you have easy access to your purchases.
Choice of return method: After placing the order you will be asked to choose the method of return - cash or bank card.
Receiving a refund: If all documents are in order, the VAT will be refunded on the spot or transferred to your bank account.

By following this algorithm, you will be able to get a VAT refund in the UAE without any problems. Don't forget to keep all receipts and documents until you leave to avoid unnecessary inconvenience.

tax free

What you need to know about VAT refund when shopping in Dubai (tax free)

When a hot Dubai day turns to a cool evening and you stroll through luxury boutiques and malls, every purchase fills you with joy. Just imagine, your shopping experience could be even more enjoyable if you know you can get some of your money back!

Specifics of VAT refund on purchases in Dubai

In the shopping world of Dubai, where every boutique and mall attracts with its unique offers, the VAT refund system allows tourists to enjoy additional benefits.

What are the restrictions on VAT refunds?

Returning to the hotel with packages from Dubai's most luxurious stores, many people wonder, "What can I expect to get for my VAT refund?". There are some important points to consider:

Minimum purchase amount: There is usually a minimum purchase amount at which a VAT refund can be claimed.
Categories of goods: Not all goods can be included in the VAT refund program. For example, some food products or alcoholic beverages may be excluded from the program.
Timeline: After your purchase, you will have a limited period of time to claim your VAT refund, usually until you leave the country.

How to shop around to get some of the VAT back?

As the setting sun beams down and golden hues play across storefronts, follow these steps to make your shopping experience even better:

Selecting a store: Make sure the store participates in the tax free program.
Ask for forms: When paying for your purchase, ask the retailer for a special VAT refund form or a tax receipt.
Keep proof: Always keep receipts and refund forms, you will need them at the airport or at specialized refund points.
Keep track of time: Don't forget to request a refund before you leave.

As you stand atop one of Dubai's many skyscrapers and contemplate the vast city, think of the additional joys that the VAT refund system will bring you. In this fabulous country, even shopping can become part of your amazing trip!

What is the Tax Free system?

Tax Free is an international Value Added Tax (VAT) refund system for tourists shopping abroad. In UAE, tourists have the opportunity to refund a portion of the VAT paid on purchases, making shopping even more profitable.

How it works?

Purchase

When you buy goods in stores participating in the Tax Free program, you are given a special Tax Free receipt.
When making a purchase, be sure to have your receipt and original passport with you.

Document Confirmation

Visit the VAT refund point at the airport before leaving UAE.
Present Tax Free receipts, goods (unused and in original packaging) and passport.

Getting a refund

Once all documents and goods have been verified, you will be refunded. This is usually in cash or by bank card transfer, depending on your choice.

What's worth paying attention to?

Not all goods are subject to VAT refund. Inform about the categories of goods in stores.
Tax Free checks are valid for a certain period of time. Remember to take your money back before the end of this period.
VAT refunds can only be made to those who leave the country within a certain time after purchase.

Tax Free system in UAE is a great opportunity for tourists to save money on purchases. By following simple steps, you can get back some of the money you spent.

Tracking of VAT refund process

Just as the palette of colors reflects the multifaceted nature of life, the world of taxes has its own shades and nuances. VAT refund in UAE is not just a formality, it is a process that deserves attention. Amidst the exciting pace of life in Dubai, when every minute counts, the question arises: how to know the status of VAT refund?

Available tracking tools

Under the golden skies of UAE, where age-old traditions combine with advanced technology, tracking returns has become easier thanks to electronic systems.

Online systems: Most shopping centers and stores use modern programs for automatic accounting of refunds. You can be notified by e-mail or SMS about the status of the refund.
Mobile apps: Some retailers and organizations offer their own mobile apps to track the VAT refund process in real time.
Phone Help: By calling the organization's hotline, you can find out information about your refund by simply providing your receipt number or other credentials.

How to understand that the refund has been successfully issued and processed?

So how do you know if your efforts have been successful?

Email Notification: Once all steps have been successfully completed, you will receive an email or mobile app notification confirming that the refund has been processed.
SMS notification: You can receive an SMS message on your cell phone with information about the status of your refund.
Bank Account Verification: If a refund has been requested to a bank account or credit card, check your transactions regularly. Successful refunds will be reflected on your statement.

Against the backdrop of the picturesque landscapes of UAE, where ancient caravans once crossed the deserts, modern technology makes the VAT refund process transparent and accessible to everyone. Vivid moments of anticipation and the joy of a successful refund are the true satisfaction of shopping in UAE.

This guide will help you make the most of the UAE VAT refund system to make your shopping experience not only enjoyable but also profitable. Enjoy your purchases!

yacht

Yacht charter in UAE

Among all the opportunities that UAE has to offer, yacht charter stands out. UAE is not only a paradise for shoppers, but also a mecca for connoisseurs of luxury and maritime adventure. Imagine sailing through the calm waters of the Persian Gulf on your own luxury vessel, enjoying panoramic views of cityscapes such as the famous Burj Khalifa.

Chartering a yacht gives you the opportunity not only to explore UAE coastline at your own pace, but also to host an unforgettable celebration or corporate event right on board. Many companies offer a variety of charter packages, from short cruises to multi-day voyages, and everyone can find an option to suit their tastes.

Important information

The article is for informational purposes only. The Tirena Boats company deals only with renting yachts and organizing events on them.

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