New VAT rules for tourists in UAE

New VAT rules for tourists in UAE

 

The UAE cabinet has pushed through a new decision on the value added tax refund in context of tourists vising the country. In a decision that aims to put an impetus on the implementation of the tax system in the UAE, the cabinet has decided to implement the VAT refund system for tourists which will integrate between retail outlets with tax refund points. A statement issued by the administration stated that the new VAT rules will be an effective measure to boost the tourism industry thus helping the UAE to retain its favored status among travel aficionados.

According to the new VAT rule, tourists visiting the country now have the opportunity to get refunds on VAT on purchases made at retailers that are privy to the new scheme. Several designated refund outlets will be established at various strategic points that will make it easy for tourists to go about collecting their refunds. However, the fact remains that the tourists can hope to get this VAT refund only when they purchase goods that are not exempt from the tax system.

The proposal seeks to establish convenient tax refund outlets at spots that may figure on a tourist’s potential itinerary like airports, metro stations etc. The tourism industry in UAE contributes vastly to the nation’s economy, accounting for 11.3 per cent of the GDP last year. This can be gauged by the fact that in 2017, an estimated 123 million passengers passed through the UAE’s airports, bringing in revenues to the tune of Dh 154.1 billion.