Federal Tax Authority Launches World’s First Tax Refund System for E-Commerce Retail Purchases for Tourists in UAE (Corporate tax in UAE)

The Federal Tax Authority (FTA) has announced the introduction of a groundbreaking VAT refund system for E-Commerce Retail Purchases aimed at tourists during their time in the UAE, marking it as the first system of its kind globally. In a press release today, the FTA detailed that this innovative system has been launched in collaboration with Planet, the authorized operator of the VAT refund system for tourists. This initiative is part of the FTA's strategy to implement proactive solutions within the context of innoVATion and digital transformation. These efforts are fueled by creativity to anticipate future needs, enhancing the UAE's competitiveness in service delivery and realizing its vision of being the premier government worldwide. This notable achievement is set to improve the country’s digital competitiveness and innoVATion performance on a global scale, bolstering the UAE’s leadership across all sectors, including tourism and e-commerce. The FTA's statement also highlighted that, in partnership with the authorized operator, a plan has been established to incorporate platforms and e-commerce retailers registered with the Authority into the “VAT Refund for Tourists on E-Commerce Purchases” system during their stay in the UAE. Furthermore, the FTA noted that this initiative builds on previous accomplishments in this area, as more than two years ago, the Authority launched a fully digital VAT refund system for tourists. This paperless system is continuously updated and provides a digital platform that enables tourists to easily scan their passports, complete purchase transactions, and automatically generate digital invoices. Tourists can verify their invoices through the shoppers’ portal, ensuring a smooth shopping experience with quick and fully digital VAT refund processes for qualifying purchases. His Excellency Khalid Ali Al Bustani, Director General of the Federal Tax Authority, expressed pride in the success of launching the world’s first electronic system that allows tourists to reclaim VAT on their e-commerce purchases while in the UAE. He noted that this is part of the Authority’s continuous efforts to enhance its systems and deliver innoVATive services that establish global standards. He further stated: "This new accomplishment boosts the effectiveness of the pioneering digital VAT refund system for tourists, showcasing one of the mechanisms that reflect the UAE’s advanced image as a leading international tourism destination. The country is characterized by its secure environment, welcoming people, and a variety of attractions, events, and tourist amenities. The system has garnered high satisfaction and commendations from tourists due to its simplicity, efficiency, and rapid processing of VAT refunds for eligible visitors." His Excellency elaborated: "The FTA provides a unique user experience through the comprehensive 'VAT Refund for Tourists on E-Commerce Purchases' system, allowing tourists to recover refundable VAT on all their purchases during their stay in the UAE, whether from physical stores or e-commerce platforms registered with the Authority. The VAT refund process is handled smoothly, quickly, and efficiently, from the moment of purchase until the refund is completed upon the tourist’s departure. This initiative contributes to enhancing tourism prosperity and promoting the growth of both e-commerce and traditional retail in the UAE." Eyad Alkourdi, General Manager of Planet, commented: "The FTA has undoubtedly achieved its vision of creating an integrated VAT refund system for tourists. We are proud to manage this exceptional initiative, which ensures a comfortable and seamless shopping experience for international visitors." The FTA clarified that the “VAT Refund for Tourists on E-Commerce Purchases” system is designed with straightforward and clear procedures while ensuring adherence to tax legislation. Tourists in the UAE can apply for VAT refunds directly through registered e-commerce platforms before their purchases are shipped. They do this by providing their travel document details and relevant personal information to confirm their eligibility at the time of purchase. The VAT refund registration is completed once the tourist’s identity is verified during the delivery or online order fulfillment.