VAT refund (Vat Refund) in the UAE
How to regain a part of the money spent in Dubai? What is Vat Refund? How to use? What are important nuances? Read detailed answers in this article.
This article will also be useful to those tourists who already have the experience of returning VAT in other countries and beginners in this topic. Figures and other data in this article are relevant for February 2021. By the way, the Commission for Return and the Maximum amount recently increased.
First, let’s talk about the nuances of the return VAT in the UAE, and in the end we will give a complete actions algorithm for tourists.
VAT refund (Vat Refund) in the UAE
From January 1, 2018, the VAT tax was introduced in the United Arab Emirates at a rate of 5%, and up to this point in the UAE there was no tax tax at all – there was no VAT, there was no NPT.
On November 18, 2018, the Tax Refund For Tourists Scheme system was launched (Decree "Decision No. 2 FTA from 2018"). Exclusive system operator – Planet, and rather her subsidiary, controlled by FTA UAE (UAE Tax Control).
Planet Terminals are now installed in the departure areas of airports and seaports across the country. Look for terminals with a big inscription "Planet". The system is completely automatic.
Now tourists can return 4.76% of their purchases in the UAE. At first glance, this is great. But this procedure has a lot of nuances. The procedure for refunding VAT in the Arab Emirates is very different from the procedures in other countries. Read this article to the end, we will tell you everything in detail.
But first, we will tell you briefly and understand what VAT is and why he returned to tourists.
Briefly – what is VAT (VAT)
This is "value added tax" (English: "Value Added Tax"). This tax is paid from the price of goods (almost any) from the moment of creation until the final consumer.
Example (simplified, but understandable). The plant produced a frying pan and sold this frying pan of the trading company, and at this point the plant must pay VAT for the state of the state. The trading company sold a frying pan store, and at this moment should pay VAT to the state. Next, the store sold a frying pan to the consumer, and the store is obliged to pay VAT to the state.
Companies do not pay VAT completely. They pay the difference between the incoming (from their buyer) and the outgoing (paid to its supplier). VAT payer is the end user, it’s we and you! We pay 100% of this tax.
VAT is a consumption tax!
From the logic of the work of this tax it follows that the tax should be paid only for the product that is consumed in this country. If the goods are exported outside the country, the goods should not be taxed. For this reason, in many countries (not in all) there is a procedure for returning VAT to tourists when leaving.
Nuance 1 – Why 4.76%, if the rate is 5%?
VAT is considered as: "The price of goods (full) = price of goods (without VAT) + 5%".
Accordingly, "Size VAT = product price (full) – price of goods (full) * 100/105".
If you calculate the formula above, you will get 4.76%. This is the percentage of money from shopping that you can return. That is, if you paid for the purchase of 1000 dirhams, you can return 47.6 dirhams.
Nuance 2 – Not all stores are involved in the VAT Return Program
Not all stores are participants of the program "Tax refund for Tourists Scheme". If the store is not a member, then the refund is not possible at all.
Participants usage usually have Tax refund signs, or "RTS" or "Planet TRS". Some participants do not hang plates, then you need to ask the seller. Fortunately, in the UAE now most stores joined the program. Even carrefour and lulu supermarket chains participate.
Nuance 3 – Not All products participate in the return system
The goods should not have been consumed in the UAE. For example, if you bought clothes, it should be new when leaving with tags. Customs has the right to check – demand to present checks and goods from which VAT Return. Do not forget it to not get into trouble at customs.
Respectively. VAT from paying the hotel can not be returned, as the hotel services are obtained in the UAE. VAT with checks from restaurants, cafes or fast food can not be returned for the same reasons. Similarly with transport costs.
VAT from payment of water parks, amusement parks, excursions, tickets for attractions can also be returned, as services rendered on the territory of the UAE. How to save in this case, read the article "How to save on entertainment in Dubai".
Nuance 4 – limitations over the amount
Lower Planca of the total check amount – 250 dirhams. Actual course, see our article "Money UAE – Dirham".
Top plank – missing. But when returning cash, the maximum return amount – 7,000 Dirhams of the UAE (previously 10,000).
Nuance 5 – you need to take Tax Free Tag
You need to inform the seller in the store that you want to make a refund. The seller will issue a special "Tax Free Tag", which will attach to the check. For registration it will be necessary to make the seller passport. On Tax Free Tag there is a QR code that can scan and find out the status of this return.
From now on, on this check it will be possible to get a refund. If not issued Tax Free Tag, then the return will not be.
Nuance 6 – you need not to lose and not spoil the check and Tax Free Tag
Check and Tax Free Tag must be kept until departure from the UAE. Often, our tourists put checks in his pocket, where checks come to an unexpected appearance. So you can not do. Check and Tax Free Tag will be needed to get a return in the automatic machine at the airport.
After receiving the return check and Tax Free Tag you can not throw out. Custom sometimes selectively checks tourists. So that the customs have no complaints, you need to have: 1 – passport; 2 – the goods for which VAT returned; 3 – Check; 4 – Tax Free Tag.
Nuance 7 – Tax Free Tag valid 90 days
Returns need to be obtained within 90 days from the date of registration of TAX FREE TAG. Next Tax Free Tag becomes invalid.
Nuance 8 – Return is made in the machine
Machines Planet are available at international airports in departure areas. At the airports of Dubai, Abu Dhabi, Sharjah, Ras Al Khaima, Al-Ain for sure. Work with an automatic. First you need to register your passport in the machine. Then register checks and tax free tag to them. At the end, enter a bank card number to transfer money.
Machines Easy to find out – they are green with a big inscription "TAX FREE". Watch the photo near, click on the photo to enlarge.
So far, Planet machines do not know the Russian language, but only know Arabic, English and Chinese. With knowledge of English can do everything quickly and without problems. Without knowledge of English will be difficult. Read our review "In which language is spoken in the UAE".
Nuance 9 – Cash Return does not always work
In the machine there is an opportunity to get money in cash. But according to tourists, it does not always work. Be sure to reserve the card in case the cash return will not work. And naturally, the card must be Visa or Mastercard, about the world map you can forget.
Nuance 10 – there is a commission!
Commission is charged 15% of the return amount. In addition, the system deducts 4.8 Dirhams (there used to be 4.5 dirhams) for processing each Tax Free Tag.
Algorithm for obtaining VAT refund
Step 1. You make a purchase in the amount of 250 dirhams or more at the Tax Refund For Tourists Scheme program.
Step 2. Ask for a check of a sheet Tax Free Tag ("Taks Free Tag"). Registration by passport, do not forget the passport. Check and Tax Free Tag Save, do not lose.
Step 3. Before departure, approach the Planet machine. In the machine, register your passport and Tax Free Tag, enter the card number and get a refund to the card.
Step 4. Check and Tax Free Tag Save, do not lose. Prepare in case of checking customs to present: passport, exported goods (for which compensation received), Check and Tax Free Tag.
VAT refund is clearly not the thing that is worth worrying in advance and which is worth planning. After all, the percentage of the return is small (4.76%), and the procedure is quite complicated. And the more you should not walk only in those stores that are connected to the system.
Just with large purchases just in case ask the seller if he will give Taks Free Tag? If it gives, it will be wonderful – there will be a nice bonus on returning home. Will not give up, do not be mistaken.
It’s important to know
– At customs, when traveling, you can get into trouble not only due to the lack of checks. Read about other potential problems in our articles "What can not and can be exported from the UAE" and "danger to tourists in the UAE";
– VAT is only 5% – this is the main reason why many things in the UAE are cheaper, and why Dubai has already become the global capital of shopping. Details in our article "Why in the UAE cheap";
– What is exactly what is interesting to bring from the UAE, read in our review "What to bring from the UAE".
A pleasant stay in the UAE, and read our interesting articles about this country (List of articles below).