UAE's Federal Tax Authority (FTA) on Wednesday announced the world's first paperless tax refund program.
According to Khalid Ali Al Bustani, director-general of the Federal Tax Authority (FTA), the system is linked with retailers, so all receipts will now be generated electronically, and tourists won't need paper receipts to claim VAT refunds.
At a press conference on Wednesday, Al Bustani was joined by senior officials from FTA, Planet Tax, Seddiqi Holding, Rasool Khoory, GMG and Apparel.
Tourism in the UAE can claim VAT refunds on purchases made at outlets when leaving the country due to the UAE's five-percent value-added tax (VAT).
For a VAT refund, tourists must spend a minimum of Dh250. In addition, there are a number of kiosks also placed at various locations in the country where tourists can claim a refund.
For tourists, the biggest challenge was carrying a lot of paperwork to claim a refund. When tourists make purchases, they have a printed invoice with a sticker which shows the reference number of the tourist refund code. When they come to the airport for an audit, they will check the paperwork. This is a lengthy process. Thus, we worked with our partner Planet Tax to ensure that data is ready before the tourist arrives at the airport and can collect their refund," Al Bustani said.
The UAE is the first country in the world to achieve this milestone. This initiative is also part of the government’s efforts to provide the maximum number of digital services to residents and visitors. In December 2021, the Dubai government became the first in the world to go paperless completely.
Because retailers, FTA, and Planet Tax systems will be linked, all receipts will be generated electronically and tourists will be able to access their VAT refunds online through Planet Tax.
The refund process is very efficient, and tourists can always check their refund amounts on the Planet portal once the invoice is posted. This service has been activated now and 95 per cent of merchants will be covered under this scheme in the first year,” said the FTA director-general.
According to Eyad Al Kourdi, general manager, UAE, for Planet Tax, tourists should scan their passports to access their transactions. Following that, they can select their preferred refund method.
It had happened that tourists forgot to bring their VAT refund receipts to hotels and homes.
In the last few years, we have seen tourists forget or lose receipts at the airport. An older woman once bought all her stuff to the airport, but she forgot the receipt at the hotel. This motivated us to improve the tourist VAT refund experience and eliminate the need to carry receipts. The UAE is the first country to go paperless,” he said during the press conference on Wednesday.
About 100 kiosks for VAT refunds are also operated by Planet Tax in the country.
This initiative will save 16,000 trees, according to Al Kourdi.
There are 16,000 trees in Safa Park in Dubai. That is saving not only for the environment but also give a decent amount of saving for retailers in terms of papers, printers and cartridges as major groups operate hundreds of outlets in the UAE,” he said.
According to Abdul Salam, the treasurer of Dubai Gold and Jewellery Group, the electronic systems are being linked at many gold and jewellery stores, making it easier for tourists to receive VAT refunds.
"Even customers will prefer an electronic receipt over a print receipt," he said.