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What you need to know now
Retailer participation and the customer’s refund are different steps. A retailer needs the scheme’s onboarding and transaction procedures.
The original article is preserved below as a historical record. Earlier deadlines, rates, offers and approval statements should not be used as current guidance.
- VAT registration does not itself prove scheme participation.
- Till data must identify the correct traveller.
- Staff need a process for purchase corrections.
Distinguish retailer participation from customer recovery
A retailer’s VAT registration and participation in the tourist-refund scheme are separate questions. The customer’s tax-free transaction must follow the scheme process; ordinary issuance of a VAT receipt does not by itself demonstrate that the shop participates. Before advertising tax-free shopping, confirm the current onboarding and operational requirements with the official scheme operator. The old rollout announcement below is background and should not be used as proof that a store is currently enrolled.
Capture the purchase accurately at the till
Train the sales team to connect the actual purchaser, travel document and eligible transaction in the scheme process. Review the details with the customer before completing the sale. The finance team should be able to link the scheme reference to the invoice and payment without merging unrelated transactions. Where several sales channels or branches are involved, confirm which locations and systems have been included rather than assuming participation automatically extends to every trading outlet.
Create a correction and returns procedure
A cancelled sale, returned item or incorrectly captured traveller detail needs a consistent operational response. Record the original transaction and the action taken so the retailer’s invoice, stock movement, payment and scheme information do not contradict one another. Assign responsibility for contacting the operator when a transaction cannot be corrected at the till. Staff should explain the customer’s next step accurately rather than promising that every invoice change can be resolved at the airport.
Reconcile the scheme to accounting records
Regularly compare issued, amended and cancelled tax-free transactions with the sales ledger and relevant settlement reports. Investigate unmatched references and retain evidence of the resolution. A retailer should describe what it can do at the point of sale and what the traveller must do before departure, including responding to any inspection request. Clear customer instructions reduce avoidable problems while keeping the shop’s participation separate from the authority’s or operator’s final handling of the customer’s refund. Include the scheme procedure in training for seasonal and replacement till staff.
YOUR NEXT STEPS
A practical way forward
- 01
Step 1
Check current retailer onboarding requirements.
- 02
Step 2
Train sales staff on accurate transaction capture.
- 03
Step 3
Reconcile issued and cancelled tax-free transactions.
CLEAR ANSWERS
Frequently asked questions
Does every VAT-registered shop offer tax-free shopping?
Do not assume so; confirm scheme participation.
Who should fix a wrongly captured purchase?
Raise it promptly with the retailer and scheme operator.
Read the original article First published 23 September 2018 · retained for context
This earlier article is preserved for context. Its rates, deadlines, approvals and announcements may have been superseded. Use the current guidance and official references on this page for your next step.
VAT REFUND FOR RETAILERS : 4 CONDITIONS FOR UAE RETAILERS TO REGISTER IN THE SYSTEM
VAT refund for retailers: The Federal Tax Authority (FTA) on Saturday announced four conditions for retailers to register in the digital system of the Tax Refund Scheme for Tourists, which will come into effect as of the fourth quarter of this year.
vat refund
The FTA set condition that the retailer must be registered with the FTA and have a tax registration number (TRN); the supplier’s sales of goods must not be excluded from the VAT refund scheme; the retailer must submit a request to participate in the Scheme as determined by the FTA; and finally, the retailer must meet the financial credit requirements specified by the system operator and be committed to submitting Tax Returns and paying due taxes regularly.
The Authority is implementing the Scheme in cooperation with Planet.
In a press statement issued today, the Federal Tax Authority cautioned that a retailer’s membership in the Tax Refund Scheme for Tourists would be revoked if they fail to meet their obligations, whether those stated in tax laws or in the contract between the system operator and the retailer.
“The system operator will coordinate between retailers registered in the tax system and wishing to register for the Scheme, connecting them with ports of entry and exit all around the UAE,” he explained.
“This, in turn, allows tourists who are eligible for a tax refund – as per the terms and conditions of the Cabinet Decision – to request a refund for taxes incurred on their purchases through a state-of-the-art digital system.”
He said Planet will make agreements with retailers to equip them with the technologies needed to be part of the Scheme, which link these businesses to the digital systems of the Federal Tax Authority, as well as airports and land and seaports. The Scheme creates designated places for tourists to apply for a tax refund and easily recover the eligible refundable amounts, which will be accurately calculated through the advanced digital system.
The FTA is hosting a meeting on September 25 in Ajman in an effort to maintain direct and constant communication with businesses, and introduce them to the terms and conditions for registering in the Tax VAT Refund Scheme for Tourists, Al Bustani added.
“We have seen strong enthusiasm from retailers, outlets and shops across the UAE to register for the scheme, and look forward to seeing registrations grow,” said Gary Byrne, director of Worldwide Strategic Partnerships & New Markets at Planet.
Nimish Goel, partner, WTS Dhruva Consultants, said in line with the best global practices, the UAE has also adopted a key measure to allow the refund of the VAT to international tourists. (VAT refund scheme) However, the key shall be the implementation i.e. educating as well as on boarding retailers and an efficient mechanism to grant refunds to tourists.
VERIFY THE DETAIL
Official sources & further reading
Source checks support this general guide. Your treatment depends on the facts, tax period and applicable legislation.
