Federal Tax Authority applies VAT refund of Dhs2.9 billion for 35,000 UAE nationals

The Federal Tax Authority (FTA) has confirmed that its digital VAT refund systems, including the VAT-refund system for UAE nationals for the construction of new residences and the VAT-refund system for tourists, achieved outstanding results in 2024 due to a continuous development of digitalisation plans, implemented by the FTA over the calendar year.

The FTA also announced on Sunday that the cumulative total of approved applications by UAE nationals who received VAT-refunds for the expenses they have incurred for the construction of their newly built residences reached 35, 000 applications with a total value of Dhs2.9 billion, since the start of the service, more than six years ago until the end of last year.

That figure can be compared to the cumulative total number of applications by the end of 2023, which was a little over 27,000 applications and a total value of over Dhs2.2 billion, reflecting an annual increase of 27.52 per cent in the number of approved applications, and 32 per cent in the monetary value of refunds.

According to statistics, the number of applications approved during 2024 for UAE nationals VAT- refunds, related the construction of new residences, reached 7,520 applications with a total value of Dhs704.38 million.

The number of approved applications for tax refunds for the construction of new UAE national-owned residences also increased from 270 applications, worth Dhs9.11 million in 2018, to 1,900 applications during 2019, with a total value of Dhs121.46 million. In 2020, 3,750 thousand applications worth Dhs301.35 million were received, and 5,990 thousand applications, worth Dhs 467.52 million in 2021.

In 2022, 7,170 applications worth Dhs583.38 million were received, with 8,250 applications worth a total of Dhs 720.12 million were processed, in 2023.

The Federal Tax Authority explained that regarding the digital VAT- refund scheme for tourists, the number of retail outlets linked electronically to the system has witnessed a remarkable expansion across the UAE over the past years.

The number of outlets registered for VAT-refund increasing to 17,847 outlets by the end of 2024, compared to 16,357 outlets by the end of 2023 - an increase of 9 per cent over the previous year. A total of 1,490 new retailers joined the scheme, in 2024, following the 1,518 outlets that were linked to the scheme in 2023. This brings the total number of outlets that have joined the digital VAT- refund system for tourists to 3,008, over the past two years.

The FTA confirmed its ambition to increase the number of self-service kiosks across the UAE, through which tourists can finalise tax refund procedures as they leave the country.

With all transactions processed in less than two minutes, self-service kiosks are currently situated in major shopping malls and hotels, in addition to airport terminals. The number of self-service kiosks for tax refunds for tourists saw an increase to 97 kiosks by the end of 2024, compared to 82 kiosks by the end of 2023 - an increase of 18. 3 per cent, over the past year. The 15 new kiosks installed during 2024, represents a more than doubling of units over 2023, which saw 6 kiosks added.

Khalid Ali Al Bustani, Director-General of FTA, said, “The FTA pays great attention to the continuous development and update of its digital systems in accordance with global best practices, in line with the UAE’s digital transformation strategy. Indicators show that FTA’s efforts in this field have positively reflected on the quality and performance of its mandate in general, including the digital systems for VAT refunds for eligible categories.

“Two key examples are the tax refund service for new housing construction for UAE nationals and the tax refund service for tourists, both of which have witnessed successive development processes over the past years. This has been achieved by introducing more facilities to streamline and accelerate the procedures related to self-service tax refund systems.” He added, “Building on the positive results of the FTA’s development of digital services, during 2024, in 2025 we will continue to launch various projects and initiatives in the field of digital transformation in the tax sector to keep pace with the smart transformation strategy laid out by our wise leadership, which entails transformation of all services based on seamless and proactive digital procedures, supporting efforts to reduce bureaucracy and maintain high levels of customer happiness.”

Meanwhile, the Federal Authority for Identity, Citizenship, Customs, and Port Security emphasised the important role of “UAE Customs” in enhancing community security, maintaining stability, supporting the economic growth of the UAE, and achieving prosperity.

This is accomplished through facilitating trade, strengthening commercial exchanges with countries around the world, managing customs risks, combating the smuggling of prohibited goods and hazardous materials, protecting borders, countering money laundering and terrorist financing attempts, as well as combating illicit trade and enhancing international cooperation.

Major General Suhail Saeed Al Khaili, Director General of the Authority, stated, coinciding with International Customs Day, which is celebrated on 26th January each year, that “UAE Customs” has managed to build and innovate modern and advanced customs systems, achieving unprecedented accomplishments and results in the areas of digital transformation, operations, and customs seizures.

WAM