Tax Flash

Federal Tax Authority Decision No. 4 of 2022 on Setting the Time Limit for Claiming Refund of VAT by Tourists 

4 July 2022

The Federal Tax Authority (FTA, “the Authority”) has issued a new Decision No. 4 of 2022 on Setting the Time Limit for Claiming Refund of VAT by Tourists (“FTA Decision No. 4”, “the Decision”) providing guidance on several requirements for the operators of the Tax Refunds for Tourist Scheme in the UAE.

Tourists visiting the UAE are eligible to receive a refund of VAT incurred on purchases made in the country under Article 68 of the UAE VAT Law and by way of Cabinet Decision No. 41 of 2018, which specifies the detailed process of obtaining a VAT refund and the requirements prescribed for a person to be eligible for its application.

The newly published FTA Decision No. 4 specifies that the operator of the Tax Refunds for Tourist Scheme is required to set a one-year time limit for tourists to claim the VAT refund through cash or a debit/credit card from the date of verification of the refund request. Such time limit should be duly disclosed in the operator’s published list of terms and conditions.

The Decision further narrates that the operator of the Tax Refunds for Tourist Scheme is mandated to return any unclaimed VAT amounts to the FTA within one month of the expiration of the prescribed time limit.

Any previous legislative provisions or communications issued by the Authority in this regard that are contrary to or inconsistent with the provisions of the Decision are repealed with the newly published Decision No 4. coming into effect on 1 June 2022.

KPMG has a team of experienced tax specialists that can help you assess your current tax position, assist in obtaining VAT refunds, prepare VAT Voluntary Disclosures and clarification requests, advise on the appropriate tax treatment or represent you in front of the FTA as registered tax agents.

We are happy to discuss your specific circumstances and determine the way forward. Should you have any questions or concerns in this regard, please get in touch with your usual KPMG contact or any of the tax professionals below.