The UAE Federal Tax Authority introduced a VAT of 5% in January 2018, and will launch Tax Free Shopping in Q4 2018.
Tax Free shopping is the purchasing of goods in the UAE which will be exported (subject to terms and conditions) whereby shoppers can obtain a refund on the VAT on these items, providing that they validate their purchases according to local rules.
“Overseas tourist” means any natural Person who is not resident in any of the Implementing States and who is not a crew member on a flight or aircraft leaving an Implementing State. Therefore under the current rules, GCC Nationals are eligible.
You will receive 85% of the total VAT amount paid, minus a fee of 4.80 dirhams per Tax Free tag.
Taxable goods except for:
• Goods that have been consumed, fully or partly, in the UAE or any Implementing State
• Motor vehicles, boats and aircraft
• Goods that are not accompanied by the Overseas Tourist at the time of leaving the Emirates.
Your tax free tag needs to be validated within 90 days of the purchase date. For instance: a form issued on 1st of January is valid until 1st of April. If this is not done, the Tax Free tag expires, and the VAT cannot be claimed anymore