UAE’S VAT Refund Scheme Set to Reverse Slump in Jewelry Sales

Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp
Share on pinterest
Share on email
Share on telegram
  • Refunds available from Nov. 18, maximum daily amount 10,000 dirhams ($2,700)
  • Scheme does not include motor vehicles, boats and aircraft

 

The UAE on Nov. 12 announced the details of a value-added tax refund scheme for visitors designed to boost tourism and sales of luxury goods.

 

From Nov. 18, foreign residents aged 18 and over with proof of purchase and a refund form issued by the retailer can reclaim VAT on goods they are exporting from the UAE, with the exception of motor vehicles, boats and aircraft, according to the Federal Tax Authority’s Decision No. (02) of 2018, by Sheikh Hamdan bin Rashid Al Maktoum, UAE minister of nance and FTA chairman.

 

Merchants and leisure operators hope it will revive the sale of luxury goods and increase tourism, reversing a decline in retail sales of jewelry and gold since the 5 percent tax was introduced on Jan. 1.

 

The items must have been bought within the past 90 days and have a total value of at least 250 dirhams (about $68). The maximum tax refund to any tourist within a 24-hour period will be 10,000 dirhams. Refunds can be claimed in cash or credited to cards.

 

An administrative fee of 15 percent of the VAT refund plus a fixed fee of 4.8 dirhams will be deducted from each claim by Planet, which is operating the digitized system on behalf of the tax authority. The item must be exported whole and must be accompanied out of the country by the tourist claiming the refund.

 

The scheme will start at Abu Dhabi, Dubai, and Sharjah International Airports on Nov. 18 and be extended to the UAE’s other land, sea and airports on Dec. 16.

 

“Due to the now practical implementation of the VAT refund scheme, retailers who focus on tourists can expect an increase in sales, especially for high value goods, such as the sale of jewelry and luxury items,” Thomas Vanhee, founding partner at Aurifer Tax Advisers, in Dubai, said by email Nov. 13.

  •