UAE Federal Tax Authority completes preparations for launching phase two of tax refunds for tourists scheme on Sun

H.E. Khalid Al Bustani: 

• As phase two is implemented, the Scheme now covers 12 air, land, and sea ports across the country. 

• The Scheme is effectively enhancing the UAE’s appeal as a tourist destination and cementing its status as a hub for trade.

Abu Dhabi: – The Federal Tax Authority (FTA) asserted that all preparations were complete by the system operator ahead of launching phase two of the Tax Refunds for Tourists Scheme next Sunday (December 16, 2018), whereby the Scheme would cover 12 air, land, and sea ports across the country.

Phase two comes on the heels of the previous phase of implementing the nation-wide Scheme, which went into effect on November 18, 2018, covering the Abu Dhabi, Dubai, and Sharjah international airports.

In a press statement issued by the Authority, the FTA explained that phase two of the Scheme would cover three additional airports: Al Ain International Airport, Al Maktoum International Airport, and Ras Al Khaimah International Airport; as well as two sea ports: Zayed Port in Abu Dhabi and Port Rashid in Dubai; and four land ports: Al Ghuwaifat Border Post in Abu Dhabi, Hili Border Port and Al Madheef Border Crossing in Al Ain, and Dubai’s Hatta Border Exit.

FTA Director General His Excellency Khalid Ali Al Bustani noted that the number of participants in the Scheme has grown exponentially as phase two goes into effect, expanding the scope of the system to include six airports, four land ports, and two sea ports used by tourists to enter and exit the UAE.

“The Federal Tax Authority coordinated with the system operator Planet, running all necessary experiments to ensure the Scheme is implemented smoothly and accurately,” H.E. added. “We have witnessed great turnout among retailers to register for the Tax Refunds for Tourists Scheme; their numbers continue to increase in light of the workshops and lectures the FTA is organising, in collaboration with Planet, to introduce them to the simple procedures for registering in the Scheme, which adheres to international best practices.”

The FTA Director General went on to explain that with the rapidly expanding scope of the Scheme, the Authority projects daily refunds of Value Added Tax (VAT) to grow quickly in the coming period, where the number of refund requests processed surpassed 3,800 daily transactions.

H.E. Al Bustani stressed that implementing the Scheme effectively enhances the UAE’s appeal as a tourist destination, encourages internal trade, and cements the country’s status as a commercial hub for the region.

Cabinet Decision No. (41) of 2018 on Introducing the Tax Refunds for Tourists Scheme; Federal Tax Authority Decision No. (1) of 2018 on the Requirements for Retailers to Participate in the Tax Refunds for Tourists Scheme; and FTA Decision No. (2) of 2018 on the Tax Refunds for Tourists Scheme outlined clear and transparent requirements and standards for processing refund requests for overseas tourists.

The Scheme’s electronic system consists of integrated mechanisms to connect retail stores registered with the Authority and wishing to register for the Tax Refunds for Tourists Scheme, linking them to the UAE’s ports of entry. This, in turn, allows tourists to apply for tax refunds on their purchases through the system, which operates on the latest technology, if they are eligible to recover VAT as per the terms and criteria specified in Cabinet Decision No. (41) and FTA Decisions No. (1) and (2) of 2018.

The Authority asserted that to be refundable, tax invoices need to have been issued by the retail stores included in the Scheme and registered in the system; these venues can be identified by visibly showcasing “Tax-Free” stickers on their storefronts.

The FTA had outlined several conditions for a tourist to be eligible for a tax refund, namely: The tourist in question is at least 18 years old; they must meet the criteria specified in Cabinet Decision No. (52) of 2018 regarding the Executive Regulations of Federal Decree-Law No. (8) of 2017 on VAT, whereby goods eligible for the Scheme are supplied to an overseas tourist who was on UAE soil when the purchase was made, and who intends to exit the UAE along with the purchased items within 90 days; Goods are also to be exported out of the UAE by the tourist within 3 months of the date of supply.

-End-

The Federal Tax Authority was established by Federal Decree-Law No. (13) of 2016 to help diversify the national economy and increase non-oil revenues in the UAE through the management and collection of federal taxes based on international best practices and standards, as well as to provide all means of support to enable taxpayers to comply with the tax laws and procedures. Since its inception in 2017, the FTA has been committed to cooperate with the competent authorities to establish a comprehensive and balanced system to make the UAE one of the first countries in the world to implement a fully electronic tax system that encourages voluntary compliance, with simple procedures based on the highest standards of transparency and accuracy – beginning from registration, to the submission of tax returns, to the payment of due taxes through the Authority’s website: www.tax.gov.ae 

© Press Release 2018