UAE announces world’s first paperless tax refund experience for tourists

The UAE’s Federal Tax Authority (FTA) on Wednesday announced the world’s first paperless tax refund scheme for tourists.

Khalid Ali Al Bustani, director-general of the Federal Tax Authority (FTA), said the system has been linked with the retailers hence all the receipts will be generated electronically and tourists will not have to carry paper receipts of their purchases in order to claim VAT refunds.

Al Bustani was speaking at a press conference on Wednesday which was attended by senior officials of Planet Tax Free, Seddiqi Holding, Rasool Khoory, GMG and Apparel. The UAE introduced a five per cent value-added tax (VAT) in 2018 and tourists in the country can claim VAT refunds on the purchases made at the outlets on leaving the country.

The tourists need to spend a minimum of Dh250 to claim a VAT refund. In addition, there are a number of kiosks also placed at various locations in the country where tourists can claim a refund.

“The biggest challenge for tourists was to carry a lot of papers to claim the refund. When tourists make purchases, they have a printed invoice with a sticker which shows the reference number of the tourist refund code. When they come to the airport for an audit, they will check the paperwork. This is a lengthy process. Hence, we worked with our partner Planet Tax to ensure that data is ready before the tourist arrives at the airport and can collect the refund,” said Al Bustani.

He said the UAE is the first country in the world to achieve this milestone.

In addition, tourists will also be able to access details of their VAT refunds online through the Planet Tax Free website.

“Tourists can check about their refund amounts on the Planet portal once the invoice is posted. This service has been activated now and 95 per cent of merchants will be covered under this scheme in a year,” said the FTA director-general

FTA said tourist VAT refund transactions doubled to 2.31 million during the first eight months of this year. In 2021, 1.13 million transactions were registered during the same period.

It’s estimated more than 3.5 million paper invoices will go digital, saving merchants up to five minutes per customer compared to printing receipts, and eliminating human error. The paperless process will save more than 16,800 trees per year and more than 4,200 tons of carbon dioxide emissions.

Eyad Al Kourdi, general manager, UAE, for Planet Tax Free, said shoppers can complete a transaction, receive a digital invoice and share it directly with Planet Tax Free. The electronic tax-refund system is integrated for purchases at a range of hotels, shopping centres, malls and other retail locations. Upon departure from the UAE, tourists can use one of more than 100 self-service kiosks available at departure points, for a simple, quick and hassle-free experience.

In addition, he said tourists should scan their passports, and then they will be able to access their transactions. Following that, they can select their preferred refund method.

He added that there have been instances where tourists forgot their VAT refund receipts at hotels and homes.

“We have seen tourists missing or forgetting to carry receipts to the airport in the la few years. An older woman once bought all her stuff to the airport but she forgot the receipt at the hotel. This motivated us how to improve the tourist VAT refund experience and eliminate the need to carry receipts. The UAE is the first country to go paperless,” he said during the press conference on Wednesday.

Planet is also operating about 100 kiosks for VAT refunds in the country.

Al Kourdi added that this initiative will help save 16,000 trees. “Safa Park in Dubai is home to 16,000 trees. That is saving not only for the environment but also give a decent amount of saving for retailers in terms of papers, printers and cartridges as major groups operate hundreds of outlets in the UAE,” he said.

Abdul Salam, treasurer at Dubai Gold and Jewellery Group, said the process of linking the electronic systems is underway at many gold and jewellery stores which will ease the collection of VAT refunds for tourists.

“Even customers will also prefer to have an electronic receipt rather than a print receipt,” he added.

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