The UAE tourist VAT refund scheme has just been updated, and the changes matter to every retailer, tour operator, and shopping mall serving overseas visitors. Under Federal Tax Authority Decision No. 11 of 2026, effective 12 July 2026, the fees charged to tourists claiming a VAT refund have been reduced, while the maximum cash refund available within 24 hours has more than tripled. For UAE businesses registered for VAT, understanding these changes is essential to stay compliant and to keep advising customers correctly at the point of sale.
This article breaks down what has changed, who qualifies as an Overseas Tourist, how the refund process works from purchase to export, and what retailers need to do differently from 12 July 2026 onwards.
What Is the UAE Tax Refunds for Tourists Scheme
The Tax Refunds for Tourists Scheme allows an Overseas Tourist to reclaim the VAT paid on eligible goods purchased in the UAE, provided the goods are exported out of the country within a set period. The scheme was first introduced under Federal Tax Authority Decision No. 2 of 2018 and has since been amended three times:
- Decision No. 9 of 2023, effective 12 July 2023
- Decision No. 2 of 2024, effective 1 March 2024
- Decision No. 11 of 2026, effective 12 July 2026
The scheme is administered by an appointed Operator, which verifies purchases, checks export documentation, and processes refunds on behalf of the Federal Tax Authority.
What Has Changed Under FTA Decision No. 11 of 2026
The latest amendment revises Article 4 of the original decision, which governs the fees charged to tourists and the cash refund limit. The key updates are as follows:
- Administrative fee reduced from 15 per cent to 13 per cent of the VAT amount being refunded
- Fixed fee per refund claim reduced from AED 4.8 to AED 3.6
- Maximum cash refund per Overseas Tourist per 24 hours increased from AED 10,000 to AED 35,000
In practical terms, tourists now keep a larger proportion of the VAT refund owed to them, and those making high-value purchases can access significantly more cash within a single day. This is a clear signal from the Federal Tax Authority to make UAE tax-free shopping more competitive for the retail and tourism sector.
Who Qualifies as an Overseas Tourist
Not every visitor automatically qualifies for a VAT refund. To be eligible, the customer must meet the definition of an Overseas Tourist under Clause 3 of Article 68 of Cabinet Decision No. 52 of 2017, and must be physically present in the UAE at the time of purchase. Retailers are required to confirm eligibility in one of two ways:
- The customer is present in-store when purchasing the goods and requests a refund claim form
- The customer buys the goods through an electronic platform, requests the refund through their own account, and personally receives the goods
Retailers must also confirm that the goods were supplied no more than 90 days before the refund documents are requested, and no VAT refund form may be issued to anyone under 18 years of age.
Minimum Purchase Value and Excluded Goods
A refund can only be claimed where the tax-inclusive value of purchases from a single VAT-registered retailer reaches AED 250 or more. Certain categories of goods remain permanently excluded from the scheme, regardless of value:
- Goods not physically accompanied by the tourist when leaving the UAE
- Goods that have been wholly or partly consumed within the UAE or another Implementing State
- Motor vehicles, boats, and aircraft
Export and Verification Requirements
Before releasing any refund, the appointed Operator must confirm that the goods are being exported out of the UAE within 90 days of the original supply date. Verification is carried out according to criteria agreed between the Operator and the Federal Tax Authority, and with the Authority’s consent, the Operator may delegate this verification to a third party.
What Retailers Need to Do From 12 July 2026
VAT-registered retailers participating in the scheme should review the following before the new fee structure takes effect:
- Update point-of-sale and refund claim systems to reflect the revised administrative and fixed fees
- Brief front-line staff on the new AED 35,000 cash refund cap so they can inform high-value shoppers accurately
- Confirm that eligibility checks, purchase records, and refund documentation continue to meet Federal Tax Authority requirements
- Review agreements with the scheme Operator to ensure fee deductions are calculated on the correct revised basis
Getting this wrong can lead to incorrect refund calculations, customer disputes, and potential compliance issues during an FTA audit.
Frequently Asked Questions
What is the new administrative fee under the UAE tourist VAT refund scheme?
The administrative fee has been reduced to 13 per cent of the VAT amount refunded to the tourist, down from 15 per cent, effective 12 July 2026.
What is the maximum cash VAT refund a tourist can claim in the UAE?
A tourist can now claim up to AED 35,000 in cash refunds within any 24-hour period, up from the previous limit of AED 10,000.
Is there a minimum purchase value to claim a VAT refund in the UAE?
Yes. The tax-inclusive value of purchases from the same retailer must be AED 250 or more for a refund claim to be valid.
Can a tourist claim a VAT refund on a car, boat, or aircraft bought in the UAE?
No. Motor vehicles, boats, and aircraft are permanently excluded from the Tax Refunds for Tourists Scheme.
Get Expert VAT Compliance Support from Tax Gian
Fee changes like these have a direct effect on refund calculations, retailer agreements, and VAT reporting obligations. If your business needs support reviewing its VAT registration, refund scheme participation, or broader UAE VAT compliance, the team at Tax Gian can help you stay accurate and audit-ready.
Contact Tax Gian today for expert guidance on UAE VAT compliance and the Tax Refunds for Tourists Scheme.
