GCC Indirect Tax Weekly Digest

UAE FTA opens retailer registration for VAT Tourist Refund Scheme

The United Arab Emirates (UAE) Federal Tax Authority (FTA) has opened registration for retailers who wish to participate in the Value Added Tax (VAT) Tourist Refund Scheme (TRS).

The FTA website’s TRS section now includes a link to the official operator of the TRS - Planet, and retailers will need to register directly with the operator.

The conditions for joining the scheme can be found on Planet’s website and are also confirmed in Federal Tax Authority Decision No. (1) of 2018 On the Requirements for Retailers to Participate in the Value Added Tax Refunds for Tourist Scheme. Retailers need to be registered for VAT with the FTA already, as a valid TRN is one of the registration requirements. They should not be behind on their VAT returns or settlement of payable tax, and must sign a contract and credit check consent form.

Further documentation requirements include the need for a copy of the trade license, sample signature of the contract signatory, and power of attorney if applicable.

The TRS is aimed at allowing overseas tourists visiting the UAE to reclaim the VAT incurred on eligible purchases from retailers registered under the TRS. The tourist will need to request a VAT refund from Planet directly, which should be paid upon the provision of satisfactory evidence, less an admin fee. Planet will charge this VAT amount to the retailer. The retailer will then be able to reduce this amount from the output tax in their VAT return filed with the FTA.

Any retailers not complying with the conditions of the TRS may have their membership of the scheme cancelled by the FTA.

FTA publishes Public Clarification and two new Cabinet Decisions

The United Arab Emirates (UAE) Federal Tax Authority (FTA) has published a new Value Added Tax (VAT) Public Clarification on tax invoice requirements, and the Cabinet Decisions on the introduction of the Tourist Refund Scheme and marking tobacco and tobacco products.

The new Public Clarification is relevant to all businesses making a taxable supply and provides further clarity over the issuance of tax invoices. The new Cabinet Decisions introduce the framework for the introduction of the Tourist Refund Scheme for VAT, and set out the previously announced tax stamps regime for certain excise goods.

VAT Public Clarification VATP006 addresses the application of Article 59 of Cabinet Decision No. (52) of 2017 on the Executive Regulations of the Federal Decree Law No. (8) of 2017 on Value Added Tax (Executive Regulations), which sets out the requirements for when a tax invoice must be issued and the particulars that must be included.

Cabinet Decision No. (41) of 2018 on Introducing the Tax Refunds for Tourist Scheme provides details on the mechanism of the Tourist Refund Scheme (TRS) and its implementation, and was issued on 24 July 2018.

Cabinet Decision No. (42) of 2018 on Marking Tobacco and Tobacco Products sets out the rules for applying a digital or physical stamp, seal, or mark which has been approved by the FTA on tobacco/tobacco products, and came into effect on 24 July 2018.

For a summary of each document, please refer to Deloitte’s recently published alert.

This digest is for information purposes only and should not be construed as advice. It does not necessarily cover every aspect of the topics with which it deals. You should not act upon the contents of this alert without receiving formal advice on your particular circumstances.