UAE offers VAT refunds to Tourists

United Arab Emirates (UAE) is all set to launch Value added Tax (VAT) from 1st January 2018 onwards.

Amidst all preparation to welcome the new tax regime, the Federal tax authority has clarified that tourists to UAE will be able to claim refund of VAT on purchases they made. This refund system will be only available to people those who are travelling to the UAE from outside the Gulf Corporation Council.

The exact mechanism for the refund of VAT including the details such as, the date implementation, the mechanism for tax refunds, and the limitations on claiming tax refunds etc. will be announced by the UAE’S cabinet in the next two months.

It was already reported that The UAE will implement five per cent VAT on goods and services from January 2018 as part of a GCC-wide agreement. “Very important to the wider public is the subjecting of the education and healthcare sectors to zero rate. Tuition fees will, therefore, not increase.

The UAE residents will have to pay 5 percent of VAT on food, water, power and higher education from next month onwards. Coming to education, extracurricular activities such as sports classes, music lessons or school transport etc., will be subject to VAT.

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