UAE unveils digitised VAT refunds for tourists

The UAE has introduced a digital value-added tax (VAT) refund scheme for tourists, among the first in the world to do so.

Making the announcement on Wednesday, the country's Federal Tax Authority (FTA) said it will reduce paper work and the time taken to reclaim VAT when tourists fly out.

The new system is integrated electronically between retail outlets and the tax refund scheme, ensuring a seamless digital process of issuing, sending, modifying and saving invoices for tourists.

The announcement was made at a joint press conference in the presence of Khalid Ali Al Bustani, FTA Director-General, and Eyad Al Kourdi, General Manager of Planet Tax Free, the operator of the tax refund system for tourists in the UAE.

Retailers will now be able to generate e-receipts, so tourists no longer need to present printed bills (with specific codes) to claim their refunds.

Under the new system, the data for the VAT refunds will be ready even before the tourist arrives at the airport, added Al Bustani.

"In a matter of moments, shoppers can complete a transaction, receive a digital invoice and share it directly with Planet Tax Free. Tourists can use one of more than 100 self-service kiosks available at departure points, for a simple, quick and hassle-free experience," explained Al Kourdi.

It was in 2018 that the UAE introduced 5 per cent VAT, with tourists allowed to claim refunds when leaving the country.

During the press conference, officials estimated more than 3.5 million traditional paper invoices will go digital, resulting in overwhelmingly positive benefits including keeping pace with the digital transformation strategy of the country, saving merchants up to five minutes per customer (compared to printing receipts), reducing friction to maintain public health at the point of sale and eliminating human error.

The 100 per cent paperless process is also expected to save more than 16,800 trees per year and more than 4,000 tonnes of carbon dioxide emissions.