VAT is a tax paid on the price of a product from the moment it is created until it is sold to the final buyer. In fact, this is a consumption tax, i.e. it is not paid by manufacturers or sellers, but by consumers, and in 100% volume. Hence the conclusion: if the product is intended for consumption in another country (i.e. he was taken out), then he should not be subject to VAT. That is why most countries have long introduced the tax free procedure – the reimbursement of part of the VAT that tourists paid to the country when buying goods for export.
Until 2018, VAT did not exist in the UAE, which means that the tax-free procedure was unnecessary. However, 6 years ago, the state introduced such a 5% tax. This was the reason for the launch of the Tax Refund for Tourists Scheme system at the airports of Abu Dhabi, Dubai and others – procedures for refunding part of the VAT – free taxes.
VAT Refund Terms
To use tax free, a person must not:
- be a resident of the UAE;
- is a member of the flight crew departing from the UAE;
- be at least 18 years old.
In addition, there are a number of requirements for the product:
- The minimum purchase amount is 250 AED UAE.
- Items (products) must be purchased from a seller registered in the Tax Refund for Tourists Scheme system and exported undamaged, i.e. in packages and with labels (the customs service has the right to check this).
- When applying for a refund of the purchase, as well as electronic receipts for them must be carried with you.
- The purchase must be removed from the territory of the UAE. Within 90 days, it is necessary to obtain a customs permit for the export and export of the purchase from the territory of the UAE.
Refunds can be made in cash or non-cash. For the amount of only 7000 dirhams UAE per day.
What is not included in the Tourist Tax Refund Scheme program
- Services consumed in the country. For example, hotel accommodation, transportation costs, buying tickets to museums, exhibitions, and water parks.
- Refunds are not made for vehicles: boats, yachts, cars.
- The program does not allow VAT refunds on purchases:
- tobacco products;
- alcoholic beverages;
- commercial, medical, and industrial equipment;
- pork products;
- batches of goods for commercial purposes, for example, 5 or 10 mobile phones will already be considered as a batch.
How to Get Tax Free in Abu Dhabi
Where and how to buy
Most of the country’s retail outlets are connected to the VAT refund system. However, there are stores that are not participating in the program. Therefore, before you buy something, check whether the store operates with free taxis. All shopping malls, fashion boutiques, retail stores, electronics, jewelry salons, and duty free at airports are connected. This is usually indicated by a bright sticker at the entrance and at the checkout – Tax-Free shopping or Planet Payment.
Purchase registration scheme:
- Ask the seller to arrange a taxi free.
- You will need a passport, which must be given to the seller for scanning. In this way, the buyer’s data is entered into the payment database.
- The seller must:
- print out the Tax Free Tag and attach it to the receipt (by the way, it has a QR code that allows you to track the stages of refund promotion);
- create an electronic form that needs to be registered when crossing the border.
Receipts and tax receipts must be saved until the end of the trip. The Customs Service conducts spot checks of those leaving. In this case, along with the passport, you must present the goods, the receipt and the registered receipt for the refund.
Where to issue a refund
Via the Planet Payment terminal
Such vending machines are available in all major shopping malls and airports (in departure areas). They are bright green with the inscription Planet Payment. This is the fastest way to get a refund, as the money can be received on the spot.
The algorithm of actions is as follows:
- Register your passport, boarding pass (at least one day before departure), receipts and Tax Free Tag at the terminal by scanning.
- Enter your Visa, Mastercard, or Unionpay bank card number to transfer money. You need the card regardless of whether you receive cash or transfer the amount to the card.
All terminals have menus in Arabic and English, only some in Russian.
At the airport or other point of entry/exit
To apply for taxi fries in Abu Dhabi, Dubai, Sharjah, Ras al Khaimah, you must:
- Before the start of check-in and screening, go to the counter where the taxi fares are issued.
- Present your passport, ticket, checks and receipts, and credit card.
- Receive money in cash (with restrictions) or by credit card (without restrictions).
Frequently Asked Questions (FAQ)
Is it necessary to have physical receipts?
Yes, they can be useful if you come under random inspection at customs.
What should I do if the product has been partially used?
The VAT refund program does not apply to partially used goods.
How long can I wait for funds to be credited?
Crediting to:
- A bank account takes up to 30 days;
- the card lasts from 2 to 8 weeks.
Conclusions
The UAE is a Mecca for shoppers. The low VAT rate makes goods much cheaper than in other countries, while there is still a refund system in place. At first glance, the refund percentage is small – 4.76% (this is 85% of VAT), but if the product costs 1000 dirhams, the refunded amount will be 47.6 AED. And those who travel to the Emirates for the purpose of shopping, collect tens and even hundreds of thousands of things, saving a lot of money in the end.
To make everything go smoothly, remember:
- Before you buy something, make sure that the store issues a Tax Free Tag.
- The purchase must be properly executed, for which you will need a passport.
- Be sure to take the receipt with the receipt attached to it.
- Keep all the evidence of purchases before leaving the country: they can be checked at customs.
- You can get taxi free through the terminal or at the airport of Abu Dhabi, Dubai, Sharjah, but before passing through customs inspection, as well as check-in for the flight.
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