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UAE tax authority urges retailers to sign up for tourist VAT refund system

UAE tax authority urges retailers to sign up for tourist VAT refund system

The new system is expected to begin operating from the fourth quarter

The UAE’s Federal Tax Authority (FTA) has invited retailers and shops registered for value added tax (VAT) to sign up for a digital system offering tax refunds to tourists.

The country introduced the 5 per cent VAT on January 1 and it applies to most goods and services.

Read: Revealed: Goods and services subject to VAT in the UAE

The tourist refund system has taken longer to implement but will come into force from the fourth quarter of this year.

Retailers can sign up for the digital platform, which is being implemented in cooperation with international operator Planet, if they have a VAT registration number, the supplier’s sale of goods is not excluded from the scheme,bthey meet financial credit requirements and have committed to submitting tax returns and paying tax regularly.

Read: Here’s how the UAE’s VAT refund system for tourists will work

A meeting will be held on September 25 with attendees from the FTA, Planet, retail companies and outlets in Ajman. Similar meetings are planned in Abu Dhabi and Dubai.

“The system operator will coordinate between retailers registered in the tax system and wishing to register for the scheme, connecting them with ports of entry and exit all around the UAE,” said FTA director general Khalid Ali Al Bustani.

“This, in turn, allows tourists who are eligible for a tax refund – as per the terms and conditions of the cabinet decision – to request a refund for taxes incurred on their purchases through a state-of-the-art digital system.”

Planet will work with retailers to ensure they have the right technologies to be part of the platform.

Tourists will then be able to apply for a refund after a purchase from registered outlets at designated points.

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