Dubai: The UAE has launched a groundbreaking VAT refund system for tourists’ online purchases during their stay, marking a world-first initiative. This move aligns with the Federal Tax Authority’s (FTA) strategy to enhance digital services and boost the country’s digital competitiveness.
The new system, implemented in collaboration with Planet, the authorized VAT refund operator, allows tourists to claim VAT refunds on e-commerce purchases made during their visit. This builds on the existing VAT refund program available for physical store shopping in the UAE.
To avail of the online VAT refund:
Tourists must apply through e-commerce platforms registered with the FTA before their purchases are shipped.
At the time of purchase, they need to provide their travel document details and relevant personal information for eligibility verification.
The refund registration is finalized when the tourist’s identity is verified during delivery or order fulfillment.
Khalid Ali Al Bustani, Director General of the FTA, emphasized the significance of this initiative, stating, “We are proud to launch the world’s first electronic system enabling tourists to recover VAT on e-commerce purchases. This achievement underscores our commitment to developing innovative systems that set global standards.”
The UAE, which implemented a 5% VAT rate in January 2018, already offers tourists a fully digital VAT refund process for in-store purchases. The extension to online shopping is expected to significantly benefit the e-commerce market, particularly for higher-priced categories often purchased online by tourists.
Industry experts highlight the immense potential of this development, noting its positive impact on demand for online goods. It also reinforces the UAE’s efforts to enhance digital innovation and global competitiveness across tourism and e-commerce sectors.
The FTA’s existing digital VAT refund process, introduced over two years ago, provides a seamless, paperless experience for tourists. By scanning their passports, completing purchases, and sharing digital invoices, tourists can verify and claim refunds efficiently before departing the country.
This latest enhancement to include online purchases reflects the UAE’s forward-thinking approach to meeting evolving consumer demands and solidifying its leadership in the global digital economy.
YAllA TV – www.yallatv.ae
