Sometimes it’s more cost effective to be a non-GCC tourist in UAE! Tourists from non-GCC countries like UK, US and Germany will be able to reclaim VAT expenses, according to a report from Federal Tax Authority UAE, cited in Gulf News recently.
How can tourists reclaim VAT in UAE?
While the mechanism to reclaim VAT expenses has not been finalized yet, it might be similar to the process in countries like UK and US. The Federal Cabinet will finalize this mechanism in the next couple of months.
The New Year has implemented a 5% VAT on goods and services sold in UAE. Tourist services will also be affected including:
- Hotel Bookings
- Car Rental Agencies
- Airport Transfers
- Limo Services
- Food & Beverage
In addition, all other related tourism expenses will be affected by this regulation as well.
Reclaim VAT Effectively
In order to make sure you have not been overcharged:
- Insist on an itemized bill for all your expenses.
- Make sure the VAT amount is 5% of the total bill.
If you find yourself overcharged, contact Consumer Protection Department at 600 54 5555 to file a formal complaint.
Duty Free Shopping? Sort of…
How does VAT affect duty free shopping in Dubai Airport? According to Federal Trade Authority, cited by Whatson Dubai, goods departing UAE will not be taxed. However, goods arriving in UAE will be taxed. However, when it comes to tobacco, soft drinks and energy drinks, the VAT will be applicable on departing AND arriving goods.
Mechanism Details
Normally in UK there is a Form 407 used to reclaim VAT at customs section of the airport. Currently the UAE Federal Tax Authority has provided a name for this mechanism. It will be called Tax Refund For Tourists Scheme and will be applicable in the coming months. For now, non-GCC tourists might have to continue paying VAT on their expenses, however this is set to change soon. Since GCC is implementing VAT across the board regionally, tourists from Saudi, Qatar and other GCC countries will continue paying VAT and will not benefit from this scheme.