VAT Refund Scheme Approved by UAE Cabinet
More good news regarding the VAT rules in the UAE. This time it’s for the tourists planning to visit the country soon. The UAE Cabinet has approved VAT refund scheme for tourists.
This means that non-resident tourists who travel to the UAE will be able to refund the 5% VAT tax applied on goods at “participated retailers”. This, however, will be on the condition that these goods are not exempted from the VAT system through the designated refund list.
According to the state news agency WAM, this decision is to support the tourism sector in the UAE and maintain its position as one of best touristic destinations around the world. The tourism sectors are one of the most supporting sectors to the UAE’s economy. In 2017, the sector contributed by 11.3% the country’s GDP, that is AED 154.1 billion.
Government officials in the UAE expect such move to boost tourism even more. “Future visitors will now feel the direct impact of this decision in their travel budgets, meaning they can potentially stay longer, explore further and experience more when they are here”, said Sultan Al Mutawa Al Dhaheri, the executive director of the Department of Culture and Tourism for Abu Dhabi sector.
The VAT refund system will be effective starting October 2018. An International company that is specialized in tax recovery services is to support its implementation.
The VAT is a new rule in the UAE which has only been implemented since the beginning of 2018 placing 5% value added taxes on products and services.