VAT refunds for tourists in UAEBusiness Registration Dubai
What is VAT?
UAE announced the implementation of Value Added Tax (VAT) effective from the 1st of January, 2018. This is a tax that is to be applied on every stage of manufacturing the product or service.
For example, when a water bottle is wrapped with the name of the brand, value is being added to the water bottle. Similarly, when a parts are put together to form a new product, value is said to have been added.
Due to VAT in Dubai, the business are able to reclaim the payment made to other establishments for the products and services. This advantage of VAT attract potential investors to set up their business in the UAE.
What is VAT registration?
Businesses in the UAE are being advised to register for VAT in Dubai. The requirement of the registration is that a business that should able to produce equal to or over £85,000 limit of turnover that is taxable.
When the businesses register for VAT, the image of the business is seen as one that follows the new guidelines determined by the government. This develops a sense of trust between consumers and the business.
Furthermore, due to the high required amount of turnover, the presence of the business is assumed to be big. This further attracts the attention of customers.
Refund Policy and its advantages
A new regulation that has been put in to effect starting 18th November, 2018, by the Federal Tax Authority (FTA) is the refund scheme for tourists. According to this policy, tourist who make purchases of goods in the UAE will be able to claim 85% VAT, while the remaining 15% will be paid to the global manager of the refund policy, Planet.
UAE has been producing ways to attract the attention of foreigners in order to boost the economic activity. The increase in tourism will act as an opportunity to attract potential investors to UAE. In addition, the tourists will see this opportunity to spend more for large amounts of goods, as later they will be able to reclaim VAT.
The refund policy allows tourists above the age of 18, to reclaim up to Dh10, 000, in cash in one day. Meanwhile, no limit has been set on credit card refunds. Furthermore, the time period during which the tourist can reclaim VAT on the goods purchased is 90 days after the purchase has been made. The tourists are to leave the country after the 90 days with the purchased goods.
Moreover, the goods that VAT can be claimed on need to be from the companies that have been registered for the refund policy. These refunds can be claimed at the airports in Dubai, Sharjah and Abu Dhabi. The lowest price of good that VAT can be claimed on is Dh250, inclusive of tax.
We help you with Value added taxes
Business Setup Consultants Dubai has helped ease out the process of company formation in Dubai. The business consultants in Dubai deal with all kinds of businesses, whether it be a business in the free zone regions, the mainland regions or falls in the category of an offshore organization.
The first step for business consultants in Dubai is to analyze the best type of business for the client. After which the process of the setup is started. There are many kinds of licenses and registrations a new business in Dubai owner needs to go through before the company formation in Dubai is completed.
Other factors that business owners need to consider are recruiting employees, contracting the right service providers etc. Furthermore, due to the new regulations introduced by the government, business in Dubai owners may have a hard time obtaining licenses and bank accounts.
Business Registration Dubai can help simplify the process as they are well-versed in the regulations. Therefore, the consultancy can accurately and efficiently get the process completed.
We have all the help you need. Talk to us through call or email and get your answers.