The United Arab Emirates (UAE) has launched the world’s first digital VAT Refunds for Tourists making e-commerce retail purchases. This innovative initiative, introduced by the Federal Tax Authority (FTA), allows tourists to receive Value Added Tax (VAT) refunds on their online purchases while visiting the country.
In a press release issued on Monday, the FTA explained that the launch of this new system, in collaboration with Planet, the authorized operator of the system that supports the VAT refund for tourists, aligns with the FTA’s plans to adopt proactive solutions within the framework of innovation and digital transformation.
The statement also noted that the FTA, in collaboration with the authorized operator, has developed a plan to include platforms and e-commerce retailers registered with the Authority in the “VAT Refund for Tourists on E-Commerce Purchases” system during their stay in the UAE.
The new system integrates directly with retailers and e-commerce platforms, enabling tourists to claim VAT refunds at the point of sale. This eliminates the need for manual paperwork or visits to refund offices, offering a seamless shopping experience. Tourists can now enjoy tax-free shopping on a wide range of products, from luxury goods to everyday items, purchased online during their stay in the UAE.
This system is fully paperless and regularly updated, providing a digital platform where tourists can easily scan their passports, complete purchase transactions, and receive digital invoices automatically. Tourists can also verify their invoices through the shoppers’ portal, ensuring a seamless shopping experience with fast, fully digital VAT refund procedures for eligible purchases.
Tourists in the UAE can apply for VAT refunds directly through e-commerce platforms registered with the Authority before their purchases are shipped. They can do so by providing their travel document details and relevant personal information to verify their eligibility at the time of purchase. The VAT refund registration is completed once the tourist’s identity is verified during delivery or online order fulfillment.
For tourists, this system simplifies the shopping experience, allowing them to benefit from tax-free prices without additional steps. Retailers and e-commerce platforms benefit from increased sales, as the tax refund incentive attracts more tourist shoppers. The system also enhances the UAE’s appeal as a shopping destination, promoting economic growth and tourism.
His Excellency Khalid Ali Al Bustani, Director General of the Federal Tax Authority, stated: “We are proud of the success of the Federal Tax Authority in launching the world’s first electronic system that enables tourists to recover VAT on their e-commerce purchases during their stay in the UAE. This is part of the Authority’s ongoing efforts to develop its systems and provide innovative services that set global benchmarks.”
The FTA’s initiative aligns with the UAE government’s vision to leverage technology in enhancing services and boosting the economy. By adopting cutting-edge solutions, the UAE aims to provide exceptional experiences for visitors and maintain its status as a global leader in innovation.
“This new achievement enhances the effectiveness of the pioneering digital VAT refund system for tourists, serving as one of the mechanisms that reflect the UAE’s sophisticated image as a top international tourism destination. The country is distinguished by its safe environment, hospitable people, and diverse attractions, events, and tourist facilities. The system has received high satisfaction and praise from tourists for its simplicity, efficiency, and speed in processing VAT refunds for eligible tourists.” Khalid added.
The introduction of this system sets a precedent for other countries considering similar measures. As e-commerce continues to grow, tax authorities worldwide may look to the UAE’s model as a benchmark for integrating tax refunds into digital retail platforms.
On the other hand, Eyad Alkourdi, General Manager of Planet, commented: “The FTA has undoubtedly succeeded in achieving its vision of developing an integrated VAT refund system for tourists. We are proud to manage this exceptional initiative, which provides a comfortable and seamless shopping experience for international visitors.”
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