FTA Simplifies VAT Refunds for UAE Tourists
The Federal Tax Authority (FTA) had facilitated VAT refunds for tourists with the introduction of an entirely electronic, tax-free shopping program in the latter half of 2018, hardly months following the UAE's implementation of VAT in January of that same year.
Overseas visitors have a paperless, trouble-free experience of seeking refunds on eligible purchases from participating outlets/stores, which could be followed by secure processing at exit ports through kiosks or operators. Fast forward to the present, and the FTA has added it one step further.
In Dec 2024, they launched the world's first fully digital system for getting VAT refunds on e-commerce purchases made by tourists during their visits to the UAE, from checkout to refund, fully online, one of the first of its type in the world. [1] Let’s read more about it!
What Changed: From In-Store to E-Commerce, All Digital
Classic In-Store Refunds
Earlier, when tourists shopped at centres and spent at least AED250 and above, they were issued a tax-free tag on the bill. At exit points like airports, they would check the tag at self-service kiosks or counters.
Upon validation, they could claim back typically around 85% of paid VAT, after letting go a small fee for the handling. It was an entirely electronic process from issue of tag to exit validation, offering paperless convenience to visitors and tourists.
New E-Commerce Integration: Purchasing Electronically, Refunding with Ease
The new online shopping VAT refund system is fully synchronized with online stores and websites that are registered under the FTA.
In this online payment checkout process, tourists are required to scan their passport, provide necessary information, and automatically generate digital receipts/invoices for the refund.
Validation is done either at the delivery point or when exiting the country. Basically, the entire process is via shopper portals, with no hard paper documents or waiting lines.
Why It Matters: Speed, Accessibility, and Global Leadership
The UAE has again positioned itself as one of the most tax-friendly landscapes by merging VAT refund processes with e-commerce facilities.
The system now serves 18,410 licensed retail outlets in the Emirates, up from 17,720 at the end of 2024, a rise by 29% as more retailers are added to the system. [2] Around 96 automated self-service kiosks have been installed at high-shopper retail and exit points by mid-2025 for fast refunds processing.
These equate to more convenience for travellers wherever and whenever they shop, whether window shopping at an online boutique from their hotel room or shop-hopping in Abu Dhabi. It is the UAE emphasis on innovation, digitalization, and more visitor experience.
Key Features of the New VAT Refund Process
- The Fully Digital Experience
In-store and online refund procedures are incorporated within electronic systems. The procedure: from purchase, rendering of an invoice, verification, and disbursement of a refund, is automated and paperless.
- Shopper Portal and Invoice Tracking
Shoppers are offered SMS links or QR codes to access a shopper portal, through which they can monitor and preserve their tax-free shopping until their exit.
- Multiple Refund Methods
Refunds can be made in cash, credit/debit card, or other accepted digital platforms. The accepted card brands are Visa, MasterCard, American Express, and UnionPay, with refunds made usually in AED.
What Tourists Need to Know: Eligibility and Steps
Eligibility Criteria:
- Be a non-UAE resident tourist, aged at least 18 years or more. GCC residents holding foreign residency could be eligible on the basis of status.
- Payment must be made from FTA registered Tax Refund scheme stores.
- Export within 90 days of purchase and in tourist's presence on departure.
- Minimum purchase value: AED 250 per transaction.
Steps to Claim VAT Refund:
- Shop at partner stores or online stores and provide passport details at point of sale.
- For shopping in-store, append the tax-free tag; for online shopping, invoice is obtained electronically.
- On exiting, check purchases from kiosks or dedicated counters, or apply delivery-time validations when shopping online. Choose your refund method: cash or card refund. Get approximately 85% of VAT refunded, after tag fee.
Lesser-Known Benefits and Useful Tips
- Extended Retail Network: FTA having recently onboarded additional outlets (over 18,410 as of June 2025), visitors to the country now enjoy more shopping facilities across all emirates.
- Minimum Exit Delays: Higher self-service kiosks and paperless verification propel the exit process to about two minutes for each transaction, bringing down wait times considerably.
- E-commerce Works Anywhere: Purchased on your device or shipped to your hotel, e-commerce transactions booked on your trip are now part of the refund process.
- Trackable and Transparent: The consumer portal allows you to follow your purchase and refund status from purchase to final.
The FTA's new VAT refund facility is not only an incentive; it's a badge of smart tourism and smart governance. From window shopping at designer fashion boutiques or online shopping for holiday suite-based, the process is now more efficient, convenient, and fully digitalized.
Traveling soon? Make the most of it: shop wisely, validate on time, and track via the portal. And if you’re planning to include VAT considerations in your business’s tourist-friendly offerings, connect with Charles and Darwish Associates (CDA).
CDA: The best tax consultants in UAE
CDA being one of the best tax consultants, has been providing tax related assistance to its clientele for more than a decade. The businesses in UAE can approach the expert team of CDA to get the consultations regarding the VAT or corporate tax registrations, tax return filings, refund applications etc. whereby simplifying the tax framework for the businesses. With the professional assistance provided by the team the businesses can focus on its core operations while the CDA’s team handles the complex tax procedures.
To explore more about the services, connect with CDA today!
References:
Mitesh Maithia
Tax Manager
Mitesh is a Tax Professional with expertise in direct, indirect, and international taxation, including transfer pricing, since 2018. Passionate about making complex tax matters simple, he shares insights to help businesses stay compliant and forward-looking.
