UAE VAT Refunds Explained: Who Qualifies and How to Claim (2025 Update)

Since the introduction of Value Added Tax (VAT) in the UAE in 2018, many businesses and individuals have asked a key question: Can I get a VAT refund?

The good news is that under UAE tax law, VAT refunds are available in several cases. Whether you’re a business with excess input VAT, a tourist shopping in Dubai, or a foreign company operating in the UAE, refunds can help you recover significant costs.

In this guide, we explain who qualifies for a UAE VAT refund in 2025, the claim process, and common mistakes to avoid.

Who Qualifies for a VAT Refund in the UAE?

Not everyone can claim a VAT refund, but several categories qualify:

1. UAE Businesses (Input VAT Refund)

Businesses registered for VAT can claim refunds when their input VAT exceeds output VAT for a tax period.

• Example: A company pays AED 50,000 in input VAT on purchases but collects only AED 30,000 in output VAT from sales → Refundable: AED 20,000.

Key condition: Expenses must be business-related and recoverable (not blocked items like entertainment, private vehicles, or certain employee benefits)

2. Tourists in the UAE

Tourists can claim VAT refunds on shopping through the Tax Refund for Tourists Scheme.

• Available at participating retailers
• Refund processed via kiosks at airports, seaports, and land borders
• A small admin fee applies

3. Foreign Businesses

Foreign companies may claim VAT refunds under the Foreign Business VAT Refund Scheme, provided they:

• Do not have a place of establishment in the UAE
• Are registered for VAT in their home country
• Incur VAT expenses in the UAE (e.g., attending exhibitions, business trips)

4. Specific Sectors and Cases

Certain entities may also be eligible for VAT refunds:

• Education and healthcare providers (on zero-rated supplies)
• Charities (approved by FTA)
• Special refund schemes for diplomats, embassies, and international organizations

How to Claim a VAT Refund – Step-by-Step

For UAE-Registered Businesses

1. Submit VAT Return on the FTA portal
2. If input VAT > output VAT → system shows a “Refundable Tax” balance
3. File VAT Refund Application (Form VAT311) via the FTA e-Services portal
4. Upload supporting documents if requested (invoices, bank details, contracts)
5. Refund approved → amount credited to your bank account

Refunds are typically processed within 20 business days, though delays may occur.

For Tourists

1. Shop at participating retailers (look for the “Tax-Free” logo)
2. Request a tax-free purchase voucher
3. At departure, validate the voucher at airport kiosks
4. Choose cash refund or card refund (minus admin fee)

For Foreign Businesses

1. Submit a refund claim to the FTA during the designated period (usually annually)
2. Provide invoices, proof of payment, and VAT certificate from home country
3. Refund processed after FTA review

Common Mistakes That Lead to VAT Refund Rejections

❌ Claiming blocked input VAT (e.g., entertainment, personal vehicles, non-business expenses)

❌ Submitting incomplete invoices (missing TRN, incorrect format)

❌ Late filing of VAT returns or refund applications

❌ Mismatched financial records and VAT submissions

Deadlines for VAT Refunds in 2025

• Businesses: Refund can be claimed after each VAT return submission
• Tourists: Refunds must be claimed at departure points
• Foreign Businesses: Refund applications must be filed within 6 months after the calendar year-end

Best Practices for Successful VAT Refunds

✅ Keep FTA-compliant invoices for all expenses

✅ Reconcile VAT accounts monthly

✅ Use accounting software integrated with UAE VAT rules

✅ Consult a tax advisor for complex cases (cross-border transactions, mixed supplies)

Conclusion

VAT refunds are an important way for businesses, tourists, and foreign entities to recover excess taxes paid in the UAE. But success depends on eligibility, proper documentation, and timely filing.

In 2025, with the FTA becoming stricter on compliance, businesses must be extra careful with blocked input VAT items, accurate invoicing, and refund claims.

Call to Action

At Advanced AnalytIQ, we specialize in:

• VAT refund applications for UAE businesses
• Tourist refund guidance for retailers
• Foreign business VAT refund support
• Full VAT compliance reviews

Contact us today to ensure your VAT refunds are processed smoothly and on time.