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What is it about? Tax-free in Dubai is a procedure for VAT refund on goods purchased by foreigners in the UAE and exported from the country unused. Such an approach is practised in many countries. In the UAE, the value-added tax is 5%.
How to apply for it? To apply for tax-free, the goods must be purchased only in shops participating in the programme. This can be done in two ways: the old way, by completing the necessary papers and forms, or in a modern electronic format.
Everyone knows what VAT is. This abbreviation stands for “value-added tax”. In essence, these are the charges that are added to the price of any product from the moment it is created until it is purchased by a consumer. Let's provide a simple and understandable example.
At a car manufacturing plant, they produced a series of new cars and sold them to sales representatives. At this stage, the factory must pay VAT to the state. The sales representatives transferred the batch to the car shop and also have to pay this tax. The showroom, after selling the car to the consumer, is also obliged to transfer the VAT amount to the state.
Companies do not need to pay VAT in full. For them, the difference between the amounts they received from the buyer and paid to their supplier is relevant. Ordinary buyers, such as you and I, are those who pay the tax in full, at the rate of 100%. This is why VAT is called a consumption tax.
It is logical to assume that this tax should be required to be paid if the product was manufactured within the country. This fee does not apply to exported products. This is why many countries have developed a procedure for refunding tax payments when leaving the country.
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What percentage of tax-free in Dubai will be refunded? With a VAT rate of 5%, the size of the amount is determined as 4.76%. Let's figure out why.
To calculate the cost of a product with VAT, you need to use the formula: Cost of the product without VAT + 5%.
The percentage of tax-free in Dubai for ordinary tourists can be calculated as follows: Cost of the product minus Cost of the product *100 / 105.
The described formula results in 4.76%. This is the percentage of funds that is available to the buyer for refund, in other words, that's how much tax-free in Dubai an ordinary tourist can count on. So, for example, if you paid 10,000 dirhams for a shirt, you can get back 476.
Please note that the Tax Refund for Tourists Scheme in Dubai does not apply to all retail outlets. Many shops do not participate in it, and when purchasing goods there, you cannot count on a refund.
At retail outlets that do participate in the scheme, you can see a sign that reads either “TAX REFUND”, “RTS”, or “Planet TRS”. Most chain stores and supermarkets, such as Carrefour and Lulu in the UAE, participate in the scheme. If there is no indicator at the retail outlet, you need to ask the salesperson about the VAT refund promotion.
All tourists know that in duty-free shops, you can buy various goods without high markups and VAT. How does this system differ from tax-free?
The principle of tax-free at Dubai airports resembles cashback. First, you need to pay, and then get a certain percentage of refund. The duty-free shop system does not support markups.
The cost of products presented on the shelves does not include VAT, various excise taxes, and duties. The list of exceptions may vary depending on the taxation system of a particular state and the type of product.
The second difference lies in the location of the shops. Retail outlets supporting the tax-free system are most often located within the city, large and small shopping centres, and marketplaces. Centres operating under the duty-free system can only be found on the territory of international air and sea ports, as well as near land border crossings.
Look for such shops after passing the passport and customs control. Often they are located in the departure area. Basically, this guarantees that the traveller will not resell the duty-free goods on the territory of the state. The duty-free cashiers may ask you to show your passport and ticket.
Before checking in at the airport, every tourist can apply for a VAT refund on products purchased in UAE shops. To do this, you need to go to the departure area and find a special register for VAT refund. They are usually located near the flight check-in counters and have invoice scanning machines.
The customs officer checks whether the purchased goods meet the requirements. Purchases need to be presented unfolded without packaging. After this, you will need to provide the original sales receipts with tax-free stickers. If the invoice is in digital format, it can be shown on a smartphone screen. After this, the tourist will be given a receipt that confirms the receipt of VAT, or a special stamp will be placed directly on the invoice.
There are several options for tax refund:
The refund period is up to 30 working days. For transferring funds to a card, you will need to wait from 2 to 8 weeks. There is a limit on receiving VAT in cash, so it is necessary to keep in mind how much tax-free in Dubai is returned per day. Each person can apply for a refund of no more than 7,000 dirhams.
Planet payment is a specially developed system that allows tourists to apply for and return the VAT paid while outside the airport. Terminals working with the tax-free system can be found in large shopping centres in the cities of Dubai and Abu Dhabi. To return the tax-free percentage, you need to go to the shopping areas such as Dubai Mall, Mall of the Emirates, Yas Mall, and others.
Image source: Elena Serebryakova / shutterstock.com
Is there a way to get the tax-free refund in Dubai through special self-service terminals? The principle of operation is similar to those installed at airports.
First, the main spread of the passport is scanned, or the data is entered manually through the keyboard, after which a quick identification is carried out. Next, it is necessary to scan the barcodes corresponding to the tax-free tags (they should be issued for each receipt for which a refund was planned).
Planet payment terminals allow you to get previously spent funds before going to the airport, saving you time during the check-in and preparation for departure.
How to get tax-free in Dubai the easiest way? FTA UAE — the Federal Tax Authority of the United Arab Emirates — has announced the transition to a digital format for VAT refund in the near future.
Thanks to this, you will not need to store numerous receipts in your wallet. All the payment receipts will be registered and stored in a special database. To get the refund, you will only need a passport.
Such an electronic refund system does not yet exist in any other country in the world. The Emirates have become a real pioneer in this complex procedure.
How does tax-free work in Dubai? Currently, the electronic refund system works in test mode. You can get the refund both in the usual way and in the described paperless one. The number of shops that have successfully transitioned to the electronic type of work with VAT under the tax-free system is increasing every day.
How to apply for a tax-free refund in Dubai? Doing this in a paperless way is simple; even a schoolchild can handle it. When paying for goods in a shop that supports the tax-free system, tell the seller that you plan to make a refund. Show your passport, and the seller will enter the purchase in the database, giving you an electronic receipt.
Where to get the tax-free refund in Dubai? Find a P-planet terminal, scan your passport data, and verify the refund amount on the screen. After this, you need to fill in the card number information to receive the transfer, or choose cash.
What is the starting amount for tax-free in Dubai? Keep in mind that there is a limit on refund per receipt: a minimum of 250 dirhams is allowed. There is no upper limit for the refund. But there is a limit when receiving refunds in cash — 7,000 dirhams (it used to be 10,000 dirhams in the past).
What is needed to get the tax-free refund in Dubai? While still in the shop, you need to notify the seller that you plan to make a refund. At the checkout, you will be given a Tax Free Tag and it will be attached to the printed receipt. A passport is required to obtain it.
The original Tax Free Tag contains a special QR code, by scanning which you can check the status of the refund operation. After performing the described actions, you can proceed with the registration of the refund. Without a Tax Free Tag, it is impossible to make a refund.
The original receipt and the issued Tax Free Tag must be saved until the departure from the country. Do not put them in your pocket; hide them away from the sunlight and moisture. Receipts must be in a good condition so that you can present them when processing a refund at the airport terminal.
Even after receiving the funds, the receipt and Tax Free Tag should be kept. Customs officials have the right to randomly check passengers.
To avoid unpleasant situations, you should have with you:
The Tax Free Tag has a limited validity period, which is 90 days. If you apply for a VAT refund after the expiry of the specified period, you will be refused.
Unfortunately, according to tourist reviews, not all machines that should issue reverse amounts in cash work. In this case, it will not be possible to cancel the operation; you can only change the type of issuance.
Before processing a refund, make sure that you have your card with you, as the machines only work with Visa and Mastercard payment systems.
How much money will you get in the end and what is the tax-free refund in Dubai? Note that for any operation, a commission fee is charged, it is 15% of the VAT amount. But that's not all; for processing each receipt, the machine deducts 4.8 dirhams.
Under the cloudless sky of the Arab Emirates, the latest cutting-edge technologies are surprisingly combined with ancient traditions. The introduction of modern electronic systems allows you to quickly track any financial operations, including Tax Free Tag.
How do you know that the refund operation has been completed successfully:
You can get VAT back for any goods, except for the following categories:
It applies to a large number of retail outlets. You can buy fashionable clothes from famous brands, jewellery, and various electrical goods.
Shops that support the tax-free programme undergo mandatory registration with the Federal Tax Administration. To get an answer to the question of where to get tax-free refunds in Dubai, look for the “Tax-Free shopping” sticker, which should be located in a visible place — on the doors of the shop or near the checkout. At the specified retail outlets, a tax invoice is issued, which has a special mark.
Where to apply for tax-free in Dubai, which shopping centres support the refund system? Dubai Mall, Mall of the Emirates in one of the following outlets:
Any tourists travelling to the UAE who are 18 years of age or older can get a VAT refund for purchased goods. This category of people excludes individuals who are residents or crew members of an aircraft or sea vessel that operates a voyage from the territory of the UAE.
Not all foreigners have the right to use the tax-free refund service. It will not be possible to get a refund if you have an official refugee status, violated the period of visa-free stay in the country or have any of the following documents:
Now you know where to find tax-free at Dubai airports. In general, getting a refund for VAT in the UAE is simple and accessible.
But remember, to get a refund, you need to save the receipts, invoices, and other necessary documents until departure. Making use of the tax-free system in the UAE will make your journey to the eastern country not only enjoyable but also less costly.
Article header image source: tete_escape / shutterstock.com
