The UAE Federal Tax Authority (FTA) has announced it has decreased the daily limit on cash refunds for tourists visiting the UAE. Previously tourists were able to claim back up to Dhs10,000 in cash, whereas now they will only be able to receive Dhs7,000.
Any remaining VAT to be claimed can be refunded via electronic transfer to the traveller’s credit card. This move comes as the FTA aims to ‘reduce its reliance on cash’ and focus more on electronic transactions. There is currently no limit on credit card transfers.
VAT was introduced to the UAE in January 2018, and added a five per cent charge to many goods and services. For tourists to claim back the tax, they must present their receipts at the airport, along with their passport and credit card, to receive a maximum of Dhs7,000 back in cash.
Khalid Ali Al Bustani, FTA Director General said: “The new decision regarding the maximum daily amount a tourist can reclaim in cash is in line with the UAE’s overall strategy to reduce reliance on cash in financial transactions, and benefit from the country’s advanced digital and technological infrastructure.”
Electronic kiosks have also been installed to make the refund process more seamless and convenient for tourists. The new system allows them to check their eligibility, verify the purchases are in their possession and receive their refund without face to face employee interaction.
Since January 2018, five per cent tax applies to goods and services including food, water and electricity (though public transport, international air travel, education and healthcare are exempt).