Special VAT Refund Schemes in the United Arab Emirates

The UAE government has suggested different special refund schemes under VAT, under which certain designated persons, even if they are not taxable persons in the UAE, are entitled to a refund of VAT paid on purchases made in the UAE. Certain conditions have been set down in each of these schemes that must be met by these individuals in order to receive a VAT refund. Let's look at the specific VAT refund schemes in the UAE.
1: Governments, diplomatic bodies and missions, and international organizations from other countries
Foreign governments, diplomatic entities and missions, and certain international organizations are all covered under this arrangement. The tax paid by such individuals on purchases purchased in the UAE would be repaid under this scheme. The following are some of the conditions that must be met under this scheme:
• A comparable plan exists in the country where the relevant foreign government, international organization, diplomatic body, or mission is created or has its official seat.
• And it exempts similar entities from paying any tax in the UAE.
• The items and services should be purchased solely for official purposes.

As a result, the UAE Government's various refund programs encourage relevant persons to make purchases from the UAE without incurring VAT.

2: Tourist Visitors
Tourists visiting the UAE who are not residents of any of the GCC VAT implementing states are eligible for this refund scheme. These visitors will be able to obtain a VAT refund on purchases purchased while in the UAE. The following are some of the requirements to be qualified for this program:
• The visitor must plan to leave the UAE within 90 days of making the transaction.
• The visitor must not be a member of the crew of a flight or aircraft departing from a country that has adopted VAT (i.e. currently, Kingdom of Saudi Arabia).
3: Citizens of the United Arab Emirates are building new homes
This applies to UAE nationals who own or buy land in the UAE and build or commission the construction of their personal dwelling on such land. These UAE nationals would be able to receive a refund of the VAT they paid on the construction costs of their home.
The following are some of the requirements to be qualified for this program:

• The claim must be for a freshly constructed building that is only used as the person's or family's primary dwelling.
• The claim must be filed within six months of the newly constructed residence's completion date.

4: Visitors from the business world
Foreign businesses can claim a return of VAT paid on expenditures spent in the UAE under the business VAT refund scheme. Any business that is registered with a competent government in the jurisdiction where it is established is considered a foreign business. The following are some of the requirements to be qualified for this program:
• The company should not be based in a country that has introduced GCC VAT.
• The tax claimed should not be for products or services that are not subject to tax recovery.
Our article 'Business VAT refund scheme' goes into great detail on the business VAT refund system.