Shopping in Dubai is a delight for tourists, offering everything from luxury malls to traditional souks. Do you want to purchase expensive items from Elie Saab or Adidas but are hesitant due to the 5% Value-Added Tax (VAT)? Here is the perfect solution. With a tax refund in Dubai, enjoy tax-free shopping from selected retailers. Ready to save big while shopping in Dubai? Continue reading to know more.
VAT Rate in Dubai
In 2018, the Federal Tax Authority (FTA) imposed a 5% VAT on most goods and services in Dubai. It is one of the main types of taxation in the UAE. While shopping in the city can be costly due to this tax, here’s some good news – tourists are eligible for a tax refund in Dubai. Yes, you heard that right!
Tax-Free Shopping
FTA works in collaboration with Planet to facilitate this tax-refund initiative. Tax-free shopping refers to tourists shopping for taxable goods and services and then getting a tax refund. This refund is 85% of the combined VAR for all purchased products. Additionally, FTA charges an AED 4.80 fee on every tax-free tag.
Process for Getting a Tax Refund in Dubai
Now that we know what tax-free shopping is, let’s move on how to get a refund. The process follows some steps such as:
1. Understanding Eligibility Criteria
Not every tourist can avail of tax-refund but there is a set eligibility criteria. Tourists coming from foreign countries are eligible under the following conditions:
- Tourists must be 18 years or older.
- It can be a national of any country except the UAE.
- Purchases a minimum of goods worth AED 250 in Dubai.
- Leave the UAE with goods within 90 days of purchase.
- Goods must be in the eligible category and retailers must be registered with FTA.
Eligible Goods
Almost all goods are eligible, excluding these:
- Goods that have been consumed completely or partially at the time of exit from Dubai
- Boats
- Motor Vehicles
- Aircrafts
- Goods that the owner doesn’t have at the time of exit from Dubai
Registered Merchants
FTA has four types of registered merchants where tourists can enjoy tax-free shopping. All these merchants issue invoices in different ways, such as:
- Handwritten Tax Invoice
- Paper Tax Invoice and the Tax-Free Tag
- Paper Tax Invoice with a Digital Tag
- Invoice generated using a Paperless method
2. Shop at an Eligible Retailer
The next step to claim a VAT refund is to shop at an eligible store. After shopping, here is the refund process to follow:
- The shop assistant will take details from a tourist’s passport or GCC National ID Card.
- Then the shop assistant will take a record of transaction details like amount, VAT, and purchase date.
- After this, a tax-free tag is attached as proof to the back side of the tax invoice. It is also scanned to add transaction details to a tourist’s passport or GCC National ID Card.
3. Validate Your Tax-Free Purchase
The last step in this process is validating your tax-free purchase at one of the validation points. There are multiple ways and locations to do so, let’s explore each one by one.
Dubai International Airport
Validate the purchase at Terminals 1, 2, and 3 at Dubai International Airport. Additionally, tourists in Dubai can validate purchases at Port Rashid. Here is a brief process to follow:
- Validate before luggage check-in as staff may inspect the luggage.
- Be ready with documents like a passport copy, tax-free tags, tax invoice, and debit card copy.
- Approach the validation point and provide the documents.
- After verification, choose to receive a refund in cash or via card. Cash transactions are acceptable for refunds below AED 35,000. Refunds above that must be credited to the card or digital wallet.
- Move out of the UAE within six hours.
- Refunds via card will be credited within nine days.
Self-Service Kiosks
Another quick tax refund method is using self-service kiosks. Follow the below process to get a refund:
- Visit one of the self-service kiosks at the airport or seaport.
- Scan your passport or provide your passport or National ID Card number.
- Follow the steps on the screen and complete them. At the end, there will be two lights, green or red. Green validation means transactions are verified whereas red means an inspection of goods is required.
- Select a refund method such as a card, cash, or digital wallet.
- Refunds via online transfers will be processed within nine days of leaving Dubai.
FAQs
Tourists can easily get a refund of 85% of the VAT value and an AED 4.80 fee for every tax-free tag.
Easily check for the tax refund status in Dubai on the Planet’s official website.
That was all about tax refunds in Dubai. Use this scheme next time you desire a shopping spree as a tourist in Dubai. Enjoy tax-free shopping and save extra VAT costs on your favourite products.
To save big on your travel journey, you can buy a Dubai Pass and save up to 60% for visiting top attractions. As a tourist here, you must explore the best places to visit in Dubai for an unforgettable experience.
