UAE launches new VAT refund system for online purchases by tourists

The Federal Tax Authority (FTA) has unveiled a new VAT refund system designed specifically for e-commerce purchases made by tourists during their stay in the UAE.

This system, which is the first of its kind globally, reflects the UAE’s ongoing efforts to enhance its tourism sector through innovation and digital transformation.

In collaboration with Planet, the official operator of the UAE’s VAT refund system for tourists, the FTA has developed a comprehensive plan to include e-commerce platforms and retailers in the VAT refund programme.

The new system allows tourists to reclaim VAT on eligible purchases made through online platforms registered with the FTA, streamlining the process to create a seamless shopping experience.

Khalid Ali Al Bustani, director-general of the FTA, emphasised the significance of this new system in further enhancing the UAE’s global reputation as a top tourist destination. “We are proud of the success of the FTA in launching the world’s first electronic system that enables tourists to recover VAT on their e-commerce purchases during their stay in the UAE,” he stated.

“This is part of the authority’s ongoing efforts to develop its systems and provide innovative services that set global benchmarks,” he added.

Highlights of the new VAT refund system

The new e-commerce VAT refund system builds upon the success of the FTA’s fully digital VAT refund system, which was first introduced over two years ago.

The system is entirely paperless and allows tourists to easily scan their passports, complete purchase transactions, and receive automatic digital invoices for their purchases.

Through a digital platform, tourists can also verify their invoices via the shoppers’ portal, ensuring fast, efficient, and paperless VAT refund procedures.

Al Bustani highlighted that this innovation enhances the UAE’s image as a sophisticated, technology-driven tourism hub. “The system has received high satisfaction and praise from tourists for its simplicity, efficiency, and speed in processing VAT refunds for eligible tourists,” he said. “This achievement reflects the UAE’s commitment to providing world-class services and making the shopping experience for tourists more enjoyable.”

The FTA’s new VAT refund system allows tourists to recover VAT on all eligible purchases made during their stay in the UAE, whether from traditional retail stores or e-commerce platforms.

Tourists can apply for VAT refunds directly on the e-commerce platforms, where they can submit their travel document details and relevant personal information to confirm their eligibility.

Once the identity of the tourist is verified during delivery or order fulfillment, the VAT refund registration is complete.

This ensures a simple and clear procedure that complies with tax regulations, while maintaining the system’s efficiency.