UAE Levies VAT on Tourism

The UAE's travel experts see no major impact from the introduction of value-added tax on the tourism sector, despite the fact that no system is yet in place to allow tourists to recoup the VAT payments. Mamoun Hmedan, managing director of travel website Wego, said the VAT introduced in the UAE at a standard rate of 5% from this month is not likely to have a negative impact on the travel and tourism sector, Zawya.com reported. “It is still rather early to form an opinion about the impact of the newly-imposed VAT on any sector. Yet it is heartening to note that international and domestic flights have been exempt from the new VAT charges in the UAE,” Hmedan said. According to the official executive regulations released by the Federal Tax Authority in November 2017, tourists to the UAE will be able to reclaim VAT on their purchases when exiting the country. However, details related to the implementation of this refund scheme are yet to be announced.