The UAE has made history as the first nation to permit tourists to receive Value Added Tax (VAT) refunds on their online shopping. This initiative, launched by the Federal Tax Authority (FTA) last year, marks a major advancement in enhancing digital services and providing a seamless experience for visitors.
Previously, VAT refunds were only available for in-store purchases at registered retailers. Now, this service covers online shopping, offering tourists more convenience and expanding their shopping options in the UAE.
Khalid Ali Al Bustani, Director-General of the Federal Tax Authority, mentioned that this service has been operational for about eight months. “We attract numerous tourists who prefer online shopping. While many countries view this as risky due to potential tax evasion by non-residents, we have partnered with online platforms to ensure buyer verification before refund details are entered,” he explained.
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Al Bustani highlighted that the FTA uses an integrated electronic system to monitor tourist purchases from arrival to departure.
Currently, the authority is working with three e-commerce platforms and is open to expanding, provided they comply with verification requirements.
This initiative aligns with the UAE’s broader strategy to cut red tape and embrace digital transformation.
The FTA’s ‘Digital Services with Zero Bureaucracy’ strategic retreat brought together government and private-sector leaders to discuss initiatives for enhancing digital services in the UAE’s tax sector.
These efforts have already achieved notable success, placing the UAE at the top of the global Tax Index for low bureaucracy and tax payment ease. Improvements include a 53% reduction in required documents, a 55% reduction in data fields, and a 77% reduction in service time.
“Our future plans aim to continue this progress,” said Al Bustani. “These achievements inspire us to introduce new initiatives to expedite service completion and make impactful changes quickly.”
UAE’s Zero Bureaucracy Initiative
The strategic retreat also reviewed the Authority’s plans for the second phase of cutting bureaucracy and enhancing digital services.
The retreat builds on a successful first phase, aligning with Sheikh Mohammed bin Rashid Al Maktoum’s vision, UAE Vice President and Prime Minister, and Ruler of Dubai.
In the first phase, 24 interactive workshops with over 560 participants generated 589 development proposals.
This collaboration resulted in over 100 approved zero bureaucracy processes for digital services, with 64 completed and the rest ongoing.
The FTA’s exceptional performance in the first phase won the inaugural Government Zero Bureaucracy Award in the Business Sector Impact category.
The second phase, planned through this strategic retreat, focuses on leveraging artificial intelligence and continuing efforts to eliminate digital bureaucracy.
