In most countries, a special incentive mechanism has been established to minimize the overall cost of tourists in order to increase the country’s tourism industry. The UAE, especially Dubai, is one of the most sought-after tourist destinations. The UAE’s VAT enforcement regulations stipulate a “tourism refund plan”. In this article, we will discuss the tourist tax refund plan and tax refund details provided in the VAT refund form 201.

According to the plan, value-added tax paid by overseas tourists will be refunded. However, tax refunds under the Tourist Tax Refund Program must meet certain conditions.

Before discussing the applicable conditions for tourist refunds, please let us know who is an overseas tourist.

Who are overseas tourists?

For the purpose of value added tax in the UAE, overseas tourists refer to natural persons who are not residents of any implementing country and are not crew members who take a flight or leave the implementing country.

Tourist tax refund conditions

For the purpose of value-added tax in the UAE, overseas tourists refer to natural persons who are not residents of any implementing country and who are not flying or crew members leaving the implementing country.

In the process of purchasing goods from suppliers, the goods to be refunded under the Tourist Tax Refund Program must be provided to overseas tourists in the state

On the date of provision, the overseas tourist intends to leave the country within 90 days after the date and carry the goods

Within 3 months from the date of provision, relevant commodities are exported by foreign tourists to places outside the country of implementation, subject to the conditions and verifications that may be imposed by supervision

VAT Return-Tourist Tax Rebate Program

In the VAT Refund Form 201, there is a separate box under “VAT on Sales and All Other Outputs” under “VAT refunds provided to tourists under the Tourist Tax Refund Scheme. This only applies to businesses that have registered and registered under the official tourist refund program:

Exempt supplies

As shown in the picture above, you need to mention all tax refunds provided to tourists under the tourist tax refund program. The amount reported in this box should always be negative. This will reduce your total output tax.

For businesses that have not registered and registered under the official travel refund program, Box 2 will not apply. In this case, you need to mention the zero value (0) that is auto-filled.

Key points for submitting tax refund details in the VAT return

Insert all amounts in the United Arab Emirates Dirham (AED)

The tourist tax rebate scheme is applicable to businesses registered and registered under the scheme

Others (not registered) need to enter the auto-filled zero value (0)