UAE introduces paperless tax refund system for tourists

The amount of VAT refunds claimed by visitors is up 104.15 per cent this year

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The UAE has introduced a paperless tax refund system for tourists visiting the country, doing away with the need to retain receipts.

Under the initiative, registered retail merchant tills in the Emirates will generate electronic invoices that will allow visitors to claim VAT refunds.

The system is integrated for purchases at a variety of hotels, shopping centres, malls and other retail locations.

Tourists will not be required to carry paper invoices to claim the refund, which they can collect in cash or have it transferred to a credit card on departure through one of Planet Tax Free's 100 self-service kiosks available at 13 airports or ports in the UAE.

“The new solution is integrated electronically between retail outlets and the tax refund scheme, ensuring a seamless digital process of issuing, sending, modifying and saving invoices for tourists,” said Khalid Al Bustani, director general of the Federal Tax Authority.

“The system achieves high satisfaction rates by users for its simple, effective and smooth tax-refund process for eligible tourists.”

Tax refunds claimed by tourists have increased by 104.15 per cent in 2022, with the number of transactions doubling to 2.31 million during the first eight months of this year.

Eyad Al Kourdi, general manager of Planet Tax Free, the exclusive operator of the tax refund system for tourists in the UAE, said the pilot phase of the paperless refund system began on November 14 last year.

“In a matter of moments, shoppers can complete a transaction, receive a digital invoice and share it directly with Planet Tax Free,” he said.

Officials estimate that more than 3.5 million traditional paper invoices will go digital, saving merchants up to five minutes per customer that would have been spent printing receipts.

The self-service tax refund can complete refunds in fewer than two minutes.

“The 100 per cent paperless process will save more than 16,800 trees per year,” said Mr Al Kourdi.

The UAE in 2018 introduced 5 per cent VAT on a majority of goods and services as part of its plans to diversify the economy and reduce its dependence on oil.

All tourists who spend at least Dh250 on purchases can claim their VAT refunds at designated outlets before leaving the country.

Tourists can either go to the validation point or self-service kiosks to have the receipts validated and receive a card refund or go to the refund point for the cash refund.

According to Planet Tax Free website, cash refunds is subject to a limit of Dh35,000. If the refund amount exceeds Dh35,000, it must be paid into a credit or debit card.