Tax Refund Scheme for Tourists - Saif Chartered Accountants

Tax Refund Scheme for Tourists: Federal Tax Authority Urges All Retail Companies to Register and Connect to the Digital System of Its “Tax Refund Scheme for Tourists”

The Authority outlined 4 conditions for retailers to become part of the system and launched an integrated media campaign to introduce them
H.E. Khalid Ali Al Bustani: We have registered great turnout for the system – one of the most advanced of its kind in the world.

Abu Dhabi, September 22, 2018, The Federal Tax Authority (FTA) has invited retailers, outlets and shops registered for Value Added Tax (VAT) 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.

The Authority is implementing the Scheme in cooperation with Planet, the global operator of the “Tax Free” system, and has identified 4 basic conditions for registering, namely: the retailer must be registered with the Authority for VAT and have a tax registration number (TRN); the supplier’s sales of goods must not be excluded from the refund scheme, as determined by the Authority; 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.

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.

FTA Director General His Excellency Khalid Ali Al Bustani asserted that the past few days witnessed a great demand for registration in the Tax Refund Scheme for Tourists, adding that the Authority continues to organize workshops and seminars – in cooperation with Planet – to introduce retailers already registered for VAT to the simple procedures for registering in the digital system of the Refund Scheme, which is one of the most advanced of its kind in the world.

“The Federal Tax Authority is hosting an extended meeting in collaboration with the system operator on September 25, bringing together representatives of retail companies and outlets in the Emirate of 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 Refund Scheme for Tourists,” H.E. Al Bustani added, revealing that the FTA intends to hold similar meetings in the Chambers of Commerce and Industry in Abu Dhabi and Dubai.

“The Authority began in the first half of September 2018 to carry out an extensive awareness campaign in cooperation with Planet, the system operator for the Tax Refund Scheme for Tourists, and Chambers of Commerce and Industry around the country,” the FTA Director-General explained, adding: “Two workshops were organised in the Chamber of Commerce and Industry in both Abu Dhabi and Dubai. Both meetings achieved remarkable success and great response from businesses in the two emirates; the activities included presentations to explain the Scheme in detail, as well as Q&A sessions to answer queries and concerns raised by representatives of registered businesses.”

Tax Refund Scheme for Tourists

“The Authority has developed a comprehensive plan to introduce the new Scheme and its registration requirements and conditions, including induction programmes offered through the FTA official website, as well as social media, print, and audio-visual outlets,” H.E. remarked.

H.E. Al Bustani noted that the Cabinet Decision No. (41) of 2018, issued on July 24, 2018, outlined a clear set of standards for transparency and accuracy in the procedures to refund VAT to tourists visiting the UAE, and who are not residents in the country. The Tax Refund Scheme for Tourists is in line with international best practice, H.E. asserted, citing the Scheme’s integrated system that enables direct connection to all outlets and shops across the UAE.

“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,” H.E. 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.”

“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,” H.E. Al Bustani concluded. Gary Byrne, Director of Worldwide Strategic Partnerships & New Markets at Planet, added, “We are delighted to support the Federal Tax Authority in rolling out this innovative and 100% digital Tax Refund Scheme for Tourists. We have seen strong enthusiasm from retailers, outlets and shops across the United Arab Emirates to register for the scheme, and look forward to seeing registrations grow before launching in the fourth quarter of this year. We encourage all retailers to register with us using a specific Merchant Application Portal, which can be reached at www.planetpayment.ae.”