Tourist VAT refund scheme approved by UAE Cabinet

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Visitors will be able to get 5-per cent back on their purchases from Q4 2018…

Good news for anyone looking to visit the UAE later this year, the UAE Cabinet has formally approved plans to implement a VAT refund scheme for tourists.

Introduced on January 1, 2018 the 5-per cent value added tax law is applicable across a range of goods and services in the UAE including education, petrol and groceries.

One of the byproducts of this new law is that the millions of tourists who visit the country each year are also subject to the VAT, unlike in some other countries where they are able to claim it back upon returning to their home.

This is set to no longer be the case when a new VAT refund scheme, which will be integrated between retail outlets with tax refund points, begins to roll out nationwide from the fourth quarter of 2018, according to a statement from government news agency WAM.

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“The system will be implemented from the fourth quarter of 2018 in cooperation with an international specialised company in tax recovery services,” a statement said. Non-residents will be able to refund VAT on purchases made at participating retailers, provided that such goods are not exempt from the tax system.

Dubai has long been a popular shopping destination for international travellers. Between the twice-annual shopping festivals and the proliferation of international brand name stores, there are no shortage of ways to spend money on shiny things.

The introduction of a VAT refund scheme should go a long way to keeping the city at the top of many tourist’s shopping lists.

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