VAT refunds have now exceeded Dh3.2 billion in the UAE as of June. This impressive figure reflects the strong uptake of the refund program launched eight years ago for citizens building new residences. Furthermore, the Federal Tax Authority confirmed this total, adding that nearly 38,000 applications had been approved.
Previously, the number stood at 31,000, with refunds valued at Dh2.54 billion by June 2024. Therefore, the latest figures show a rise of over 22 percent in applications and a 26 percent increase in refund value. In just the first six months of 2025, 3,097 applications were approved. Consequently, these approvals accounted for Dh284.77 million in additional refunds.
The UAE introduced a 5 percent VAT in 2018 on most goods and services. This move, notably, supported national goals to diversify income sources and reduce reliance on oil revenue. However, when citizens build or commission a private residence, they may recover VAT paid on construction costs.
In addition to residential refunds, the VAT refunds initiative also supports tourism. The government, as part of its broader strategy, continues to enhance its digital tax refund system for tourists. Currently, 18,410 retail outlets are part of the program, up from 17,720 stores in December 2024. Two years ago, only 15,020 outlets had joined. This clearly shows steady progress in expanding the system’s reach.
Moreover, tourists spending more than Dh250 can claim a refund at approved counters before leaving the country. In 2022, the government launched a paperless version of the service. That move effectively eliminated the need for printed receipts. By June 2025, 96 self-service kiosks were operational in malls and hotels. Notably, each kiosk processes a refund in under two minutes.
Additionally, e-commerce VAT refunds for tourists began in December 2024. This system specifically helps visitors reclaim VAT on online purchases made during their stay.
To further boost convenience for citizens, the FTA recently introduced the Maskan smart app. This tool allows fully digital, paperless VAT refunds on private home construction. Officials said Maskan supports the government’s wider digital transformation goals. Ultimately, the app helps reduce bureaucracy and improves customer service.
As a result, VAT refunds remain a key tool in improving economic transparency and easing burdens on both residents and visitors.
