UAE tourist tax refunds surge 14.41% to 4.18 million in 2023: FTA DG

The Federal Tax Authority (FTA) has reported a 14.41 per cent increase in tax refund transactions for tourists, totalling 4.18 million transactions in 2023, with a daily average of transactions of 11,460.

Khalid Ali Al Bustani, director-general of FTA, said that the electronic system for refunding value-added tax to tourists has exceeded expectations in recent years, with a significant rise in tax refund transactions. The FTA’s data indicates that approximately 14 million electronic transactions for tax refunds to tourists have been processed since the system’s launch in November 2018 until the end of the previous year.

He noted that the daily average of electronic transactions executed for tax refunds to tourists has consistently increased over the past four years, rising from 4,130 transactions as a daily average in 2020 to about 7,390 transactions daily in 2021, and jumped significantly to about 10,020 transactions daily in 2022, and continued to rise, with the daily average of tax refund transactions for tourists executed during 2023 reaching about 11,460 transactions.

Al Bustani said: “With the tourism recovery witnessed by the UAE, and the continuous development operations carried out by the Authority for the electronic system for VAT refunds to tourists; the total annual number of electronic transactions executed for tax refunds to tourists has witnessed continuous growth in recent years, rising from 1.51 million transactions in 2020 to 2.7 million transactions in 2021, with an increase of 78.54 per cent. The increase continued to 3.66 million transactions in 2022, with an increase of 35.44 per cent. It rose again to 4.18 million transactions in 2023, with an increase of 14.41 per cent.”

Regarding the electronic linkage of retail systems with the digital system for VAT refunds to tourists, Al Bustani clarified that this linkage constitutes a key element in the significant achievements made during the past period, noting that the digital system developed for VAT refunds to tourists, launched in 2022, is considered the latest of its kind globally.

He added, “The digital system primarily relies on dealing with electronic invoices issued by registered retailers (point of sale) with the Authority’s system instead of traditional paper invoices, through electronic linkage between these outlets and the system, to issue, send, modify, and store invoices electronically between the seller, the tourist (buyer), and the system, in accordance with the best standards, and to enhance the country’s competitiveness in all sectors, including the tourism sector.”