UAE reports major boost in VAT refund programme for citizens, tourists

DUBAI: The United Arab Emirates (UAE) has announced significant advancements in its VAT refund initiatives, benefiting both Emirati citizens building new homes and international tourists. The Federal Tax Authority (FTA) reported that its digital VAT refund systems achieved impressive results in 2024, propelled by ongoing digitalization efforts, reported Nukta.com

According to the FTA, a total of 34,900 VAT refund applications from UAE nationals constructing residential properties have been approved, totalling AED2.9 billion (approximately $790 million). This cumulative amount represents refunds processed since the program’s launch over six years ago, up to the end of 2024.

For UAE nationals, the increase in approved applications marks noteworthy growth compared to the end of 2023, when 27,000 applications worth AED2.2 billion (around $599 million) were approved. In the past year alone, the number of approved applications grew by 27.52 percent, with the monetary value of refunds increasing by 32 percent. In 2024 specifically, 7,520 applications were approved, amounting to AED704.38 million (around $192 million). This upward trend has been consistent since 2018, when only 270 applications totalling AED9.11 million ($2.5 million) were approved. The numbers surged to 1,900 applications worth AED121.46 million ($33.1 million) in 2019.

In addition, the FTA highlighted the expansion of its digital VAT refund system for tourists, which has positively impacted the retail and hospitality sectors. By the end of 2024, the number of retail outlets registered under this system rose to 17,847, a 9 percent increase from the 16,357 outlets in 2023. This growth included 1,490 new retailers in 2024, building on the previous year’s addition of 1,518 new outlets.

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Over the past two years, 3,008 outlets have joined the VAT refund system, demonstrating the UAE’s dedication to enhancing its attractiveness as a tourist destination. The FTA also improved the efficiency of refund procedures by increasing the number of self-service kiosks to 97 by the end of 2024, compared to 82 in 2023—an 18.3 percent annual increase. These kiosks, located in shopping malls, hotels, and airport terminals, enable tourists to complete tax refund processes in under two minutes.

Khalid Ali Al Bustani, Director-General of the FTA, emphasized the authority’s commitment to advancing digital systems that adhere to global best practices and align with the UAE’s digital transformation strategy. “Our digital transformation efforts have significantly enhanced the performance and quality of VAT refund services, benefiting both Emiratis and tourists. These systems have been continually improved to streamline processes and ensure customer satisfaction,” Al Bustani stated.

Looking ahead to 2025, the FTA plans to introduce new initiatives aligned with the UAE’s smart transformation strategy, which aims to reduce bureaucracy and improve service efficiency through proactive digital solutions. The FTA’s ongoing initiatives reflect the UAE’s broader objective of providing seamless, customer-focused services that promote economic growth and bolster the country’s standing as a global leader in innovation and hospitality.