The Dubai VAT Refund Scheme allows individuals to receive an 85% refund on the VAT they have paid. In this guide you will find all the useful information for the Dubai VAT Refund for tourists, which allows you to shop tax free in the emirate and enjoy the benefits of your holiday to the fullest.
Many people love shopping in the UAE due to the vast selection of premium and luxury goods available at relatively affordable prices. However, what not everyone knows is that since 2018, the UAE has implemented a value-added tax (VAT), which also applies to tourists. The good news is that tourists can request a refund on the VAT they paid. In this comprehensive guide, we will walk you through the process of applying for a VAT Refund in Dubai (the same rules also apply in other UAE airports), and provide you with a brief overview of Dubai’s tourist taxes.
What you will find in this guide to the Dubai VAT Refund:
Dubai VAT Refund Scheme: All You Need to Know
In recent years, with the advent of the economic crisis in the Gulf countries, heavily dependent on the oil economy, the UAE government has introduced the application of VAT, the Value Added Tax. Introduced in 2018, the UAE implemented a 5% value-added tax, but tourists can still enjoy tax-free shopping throughout the country. VAT refunds are applicable only to goods purchased during their stay in the UAE that will be exported.
VAT is paid by all, residents and tourists, on all goods, including food, without exception. The VAT amount is clearly indicated on the invoice. The VAT Refund Scheme in Dubai and the UAE allows individuals to receive an 85% refund on the VAT they have paid. During the VAT refund process, a nominal cost of AED 4.80 per Tax-Free Dubai Tag is deducted automatically from the total refund amount.
Planet Payment serves as the sole operator of the Dubai VAT Refund system in the UAE, and most popular stores, including those in prominent locations like the Dubai Mall and the Dubai Gold Souk, are registered with the scheme, making it convenient for tourists to obtain their refunds upon departure, regardless of their mode of transportation. It’s important to note that refunds do not apply to goods that have been fully or partially consumed within the UAE or to goods that are not accompanied by the tourist when leaving the country. Additionally, tourists must depart within 90 days of making the purchase and obtaining the refund.
Dubai VAT Refund and Tax-Free Shopping in Dubai
Tax-free shopping in Dubai refers to the purchase of taxable goods in the UAE that will be exported, subject to specific terms and conditions. Eligible tourists have the option to request a refund on the VAT incurred on their purchases after validating them at the point of exit. Refunds for items with validated export tags can be claimed within one year from the date of export validation.
Were you aware that you can claim a refund on the VAT paid for purchases made in the UAE? It’s true! When you visit the United Arab Emirates, you can legally enjoy tax-free shopping and even receive money back for your purchases. Although it may seem too good to be true, it’s not.
How does the Dubai VAT Refund work?
Dubai’s VAT Refund scheme, initiated by the Federal Tax Authority in November 2018, offers a convenient way for tourists to benefit from tax refunds not only in Dubai but also across the United Arab Emirates (UAE).
The UAE VAT Refund Scheme operates through an integrated electronic system managed exclusively by PlanetPayment on behalf of the UAE Federal Tax Authority. This system is connected to a wide range of popular retail outlets, boasting over 13,800 participating stores in Dubai, Abu Dhabi and other cities, that are registered with the VAT Refund scheme. Moreover, it establishes a direct link between 13 entry and exit ports, encompassing air, land, and maritime transportation, throughout the UAE. This connectivity allows eligible shoppers to effortlessly claim their tax refunds prior to their departure.
One of the noteworthy aspects of this scheme is the availability of Self-Service Kiosks. These user-friendly kiosks streamline the tax refund process by automating the required procedures. With these kiosks, tourists can complete the necessary steps for their tax refund effortlessly and with confidence.
To simplify references, the scheme is commonly known as “VAT Free Shopping Dubai” or “Tax Refund Dubai“. It’s important to note that while these terms are commonly used due to Dubai’s popularity, the scheme extends its benefits to tourists throughout the UAE, making it a comprehensive and accessible solution for visitors across the entire country.
To obtain a UAE VAT Refund and make the most of your tax-free shopping experience in Dubai or Abu Dhabi, follow these two steps:
- Request a Tax-Free purchase from the shopkeeper, who will then initiate the refund procedure for you;
- Validate your purchase at the airport or port before your departure and collect your VAT refund.
When making your purchase, you will pay the entire amount to the shopkeeper, including taxes. However, upon validation, you will be refunded the VAT portion, which typically amounts to around 5% of the total (note that the refund will not cover the full amount).
Requirements for the UAE VAT Refund
To apply for a UAE VAT Refund, you can only do so for goods that are intended for consumption outside the UAE. It’s important to note that you cannot claim a UAE VAT Refund for services or goods that have been consumed, even partially, within the UAE. This includes expenses related to restaurants, food, hotels, and medical bills. It’s worth mentioning that medical bills in the UAE can be quite expensive, so I highly recommend reading my post on Dubai Travel Insurance for further information.
You must also comply with these conditions:
- Goods must be purchased from a retailer participating in the “UAE Tax Refund for Tourists Scheme“;
- Goods are not excluded from the UAE Federal Tax Authority’s UAE VAT Refund Scheme;
- You must have the explicit intention to leave the UAE within 90 days and you must bring the purchased goods with you (which will be verified and validated before departure);
- The minimum spend must be AED 250.
How to shop tax free in Dubai or Abu Dhabi
Although most of the shops that allow tax-free shopping are located in major cities in the UAE (including Sharjah and Ajman, for example) these rules apply to all UAE.
- When in the store, and spending at least AED 250, ask the shopkeeper for a tax free purchase;
- Show your passport and your visa, the shopkeeper will have to scan it and enter it in the UAE VAT Refund system;
- The shopkeeper will attach a Tax Free tag behind the sales receipt
- The shopkeeper will show you the digital Tax Free form, which you must validate before departure, within 90 days from the date of purchase.
Before departure, at the entrance to the Dubai and Abu Dhabi airports, the ports (including cruise terminals) and at the road borders, you will find a desk where you can go to validate your Tax Free form.
At Abu Dhabi and Dubai Airports, the UAE VAT Refund counter is located in the entrance halls of each terminal.
You have to go to the counter with your passport and with the purchased goods to be validated. Remember this must be done prior to check-in and going through security!
How to apply for a UAE VAT Refund at Dubai Airport if you are short on time
In Dubai Airports, both Dubai International Airport (DXB) and Al Maktoum International Airport (DWC), there are Planet Payment self-service kiosks, located near the VAT Refund Desk.
If you are in a hurry you can go to one of these automatic kiosks, submit the sales receipt (the one relating to tax free purchases), your passport and your credit card. The kiosk will process the validation and refund automatically.
Your tax refund will be credited to your credit card or you can choose to withdraw it immediately (maximum AED 7000), in which case the machine will issue your refund in dirhams.
You can find more information on the UAE VAT Refund on the official government website or on the website of Planet, the operator that manages the refunds.
Dubai Tourist Taxes: Everything You Should Know
Just like in most countries around the world, many products in the UAE are subject to excise duties, which are already included in the retail price. Excise duties primarily apply to tobacco and derivatives, energy drinks, sweets, and alcohol.
Additionally, there are tourist taxes that mainly pertain to hotels. When you receive a hotel bill, you should anticipate the following charges:
- VAT: 5%
- Municipal tax: approximately 7%
- Tourist tax: around AED 10-20 per room per night
- Service tax: approximately 10%
These taxes are typically already incorporated into the price when you book through platforms like Booking.com, ensuring a transparent transaction without any unexpected surprises.
In restaurants, service charges and VAT (5%) are usually included in the prices displayed on the menu. It’s important to note that tipping is not obligatory in UAE restaurants. However, if you have had an exceptional dining experience, it is customary to round up your bill or leave a tip of about 10%.
When it comes to alcohol, it’s crucial to be aware of the intricate regulations enforced in most emirates, particularly Dubai and Abu Dhabi (where alcohol is prohibited in Sharjah). In Dubai, the price of alcohol served in restaurants and bars includes VAT (5%), which is generally already factored into the menu prices. To purchase alcohol from liquor stores, a special license is required. Currently, tourists can obtain a complimentary 30-day permit directly from the liquor store.
Read more: Drinking Laws in Dubai for Tourists and UAE Alcohol Rules
FAQ on Dubai VAT Refund for Tourists
How to Shop Tax-Free in Dubai and the UAE?
When shopping in Dubai and the UAE, tourists have the option to make tax-free purchases.
To qualify for this, a minimum expenditure of AED 250 is required.
To initiate a tax-free purchase, tourists should present a valid travel document at the store. The document will be scanned and used in the payment system. The shop assistant will capture the tourist’s information using the Planet system.
Once the purchase is made, the shop assistant will attach a ‘tax-free’ tag to the back of the sales receipt. Additionally, a digital tax-free form will be generated for the transaction.
To complete the process, the tourist must validate the tax-free transaction at the airport within 90 days of the purchase date. This ensures that the tax-free status is properly applied and any applicable refunds are processed accordingly.
What goods are excluded from the Dubai VAT Refund for Tourists?
Dubai VAT Refund for Tourists are not applicable for the following:
– Consumed items, whether fully or partially, within the UAE;
– Goods that are not in the possession of the tourist when leaving the country;
– Additionally, as mentioned earlier, purchases with a total value below AED 250 are excluded from the refund process;
– Non-exportable goods, such as medical expenses, hotel bills, and restaurant bills, are not eligible for the Dubai VAT Refund.
How much will I get back from my Dubai VAT Refund?
The VAT Refund Scheme in Dubai and the UAE enables you to claim 85% of the total VAT amount paid, with a deduction of AED 4.80 per Tax-Free Dubai Tag as a processing fee. The entire refund amount will be automatically calculated during the VAT Refund Process.
Therefore, the VAT refund in Dubai and the UAE is not total; you will not receive 100% of the amount back. However, it is worth noting that the VAT rate in the UAE is relatively low at 5%. Consequently, you can still save some money on your purchases.
What are the requirements for obtaining a Dubai VAT Refund?
To obtain a Dubai VAT Refund, the following requirements must be met:
– The tourist must be at least 18 years old;
– Goods must be purchased from a retailer participating in the ‘Tax Refund for Tourists’ scheme;
– The tourist must physically present the tax invoice, ‘tax-free’ tags, and the relevant goods.
Additionally, it’s important to note that every adult tourist can claim a maximum cash refund of AED 35,000 per trip. This allowance represents a significant amount of money!
Are you planning your trip? These tips may come in handy:
THINGS TO DO AND SEE IN DUBAI
USEFUL TIPS TO KNOW BEFORE YOU GO TO DUBAI
GUIDE TO THE BEST CAR RENTALS IN DUBAI AND ABU DHABI
TOP Things to Do In and Around Dubai:
☞ Afternoon Tea, Champagne and Drinks at the Burj Al Arab SkyBar
☞ Dubai Helicopter Tour
☞ Lunch or Dinner at the Burj Khalifa
☞ Dinner on a Billionaire’s Yacht in Dubai Marina
☞ Dubai Desert Safari & Camel Trek
☞ La Perle by Dragone: the most famous show in the Middle East
☞ Combo Ticket Burj Khalifa & Dubai Aquarium (DISCOUNTED!)
☞ Excursion to the Great Mosque and the Abu Dhabi Louvre