VAT on Business Visitors & Tourists
Business Visitors
Under Article (67) of Executive Regulations of Value Added TAX explain the VAT refund on purchases and expenses incurred by Business Visitors to UAE from Other Countries:
- The FTA will implement a VAT refund scheme for those visitors who are having companies and establishments in outside UAE.
- The refund will be on their purchases and expenses.
- But if the business visitor’s intention is to purchase for supply or sale the goods inside the UAE then this refund scheme will not be applicable as per Clause 3 (a) of the Article 67.
- A tour operator is not entitled to make a claim under the VAT Refunds for Foreign Business Scheme.
- The claim for refund shall be made on Electronic Form.
- The Minimum Claim amount should be AED2,000/-
- The Period of Claim shall be 12 calendar months.
- The Claim shall be accompanied by such documents or evidence as may be required by the FTA.
Tourists
Under Article (68) of Executive Regulations of Value Added TAX explains reclaim scheme for the purchases and expenses incurred by tourists to the Country.
The regulations do not give details of the mechanism of reclaim and Under Clause 1 of Article (68) says:
- The cabinet may issue a decision regarding introduction of Tax Refunds for tourists specifying the following:
- The date on which the schemes come to effect.
- The Mechanism of refunds
- Limitation of claiming
- Process of any verification to be undertaken under the scheme
Under the Clause 3 of the Article (68) define the “overseas tourist’ as ‘any natural person who is not resident in any of the implementing State and who is not a crew member on a flight or aircraft leaving an implementing state’.
Many tax regime countries having VAT also offer Tax refunds to its tourists.
The FTA may publish a list of goods that shall not be subject to Tax Refunds for tourist’s scheme.