This morning I came across an interesting question from a friend who had come on a tourist visa to UAE. He had purchased an expensive camera through an online shopping website and wanted to know if he could get the VAT refund while leaving back to his country.
UAE Government has a scheme in place for facilitating tourists who visit UAE, where they can claim the VAT (Value Added Tax) refund on their purchases made during their stay in the country. They can get a refund at exit points like airports from an authorised operator named Planet. The goods must be purchased from retailers who have registered themselves in the scheme and the minimum purchase value should be AED 250 per tax invoice.
The question is what about purchases made online? I asked my friend if he had provided his passport details while purchase or was given any tax free tag on the invoice, the answers to which were all NO. So, clearly there was no question of claiming VAT refund on it.
Let us see what the law says:
EXCEPTIONS FOR CLAIMING VAT REFUND FOR TOURISTS:
- Goods that are partially or fully consumed in the UAE are not eligible.
- Goods that have been used, fully or partly, in the UAE and are not accompanied by the original packaging (for example: a smartphone that was used in the UAE and is accompanied by the original packaging upon leaving the UAE is eligible, but if the packaging is not present it is not eligible);
- Goods purchased online, unless they are picked up in person at the store, and the receipt and Tax Free Tag are issued on the same day as the collection date.
- Motor vehicles, boats, and aircraft are not qualified for Tax Refund Scheme for Tourist.
- Crew members of flight or aircraft and all the GCC residents are not eligible for Tourist Tax Refund.
- Goods sold to companies.
So, the above points clarify that goods purchased online are not covered under refund scheme, unless you have placed order, personally picked up goods from store and received tax free tag on the invoice.
Anyway, my friend left the country, giving me a food for thought how this online shopping, should also be covered under the ‘Tourist VAT Refund Scheme’ to facilitate our tourist brothers.
If you have any queries with regard to VAT, feel free to write us at email@example.com and we shall get back to you.
CA Pooja Agarwal
Partner ‐Perspective Accounting & Bookkeeping