Do tax-free merchants charge less VAT at the till?
No — you charge the normal 5% on every sale. The tourist's refund happens at departure through the scheme, not at your counter.
Merchant Requirements
Tax-Free Merchant Requirements: Running the Scheme Properly In-Store
Joining the scheme is the start; running it correctly is the obligation. A registered merchant carries defined duties — at the counter, in the books, and toward Planet and the FTA — and clean execution is what keeps the tax-free sign an asset rather than a liability.
- Counter workflows documented and trained
- Issuance accuracy monitored with simple checks
- Scheme data reconciled to VAT returns
- Audit-ready records without extra bureaucracy
Dubai-based support for retailers joining the UAE tourist tax-free scheme.
Quick Answer
A registered merchant must: issue digital tags correctly at the time of sale against valid passports and qualifying invoices; charge VAT normally (the refund happens downstream, not at your till); keep invoice-and-tag records reconciled; reflect scheme reporting accurately in VAT returns; and cooperate with Planet/FTA oversight. Staff competence at the counter is the requirement everything else depends on.
At saleTags issued with the transaction
5% as normalYou still charge full VAT at the till
ReconciledTags matched to invoices and returns
TrainedEvery counter, every shift
Counter Duties: Where Compliance Lives
The scheme's integrity rests on issuance: right buyer, right goods, right invoice, right moment. That means passport verification on every tag, no retroactive tags for yesterday's purchase, no splitting sales to reach thresholds, and no tax-free promises on excluded goods. These are staff habits — built by training, sustained by spot checks.
- Passport scanned and verified for every issuance
- Tag matches the tax invoice — items, values, date
- No retroactive, split or courtesy tags
- Excluded goods flagged in POS to prevent errors
Back-Office Duties: Books That Reconcile
Behind the counter, the merchant's books must tell one consistent story: sales invoices, issued tags, scheme reports and VAT returns all reconciling. You continue charging and reporting 5% VAT normally; scheme adjustments flow through the operator's reporting — and mismatches between that reporting and your returns are exactly what reviews find.
- Daily/weekly tag-to-invoice reconciliation
- Scheme reports checked against POS data
- VAT returns aligned with scheme adjustments
- Records retained to standard VAT timelines (5 years)
Staying in Good Standing
Planet and the FTA monitor merchant behaviour — validation failure rates, issuance anomalies, tourist complaints. Good standing is cheap to keep: trained staff, a documented workflow, a monthly reconciliation, and fast correction when something does go wrong.
- 1Onboard every new hire on the issuance workflow
- 2Spot-check issuances weekly against invoices
- 3Reconcile scheme reports monthly into VAT workings
- 4Investigate validation failures traced to your store
Tax-Free Merchant Requirements UAE FAQs
What records must a merchant keep?
Tax invoices matched to issued tags, scheme reports, and VAT workings that reconcile — retained on standard five-year VAT timelines.
Who is liable for a wrongly issued tag?
The merchant owns issuance accuracy under the agreement — repeated errors invite operator scrutiny and, in patterns, FTA attention.
How should staff be trained?
A short structured session on eligibility, issuance and exclusions, refreshed for new hires — plus visible quick-reference guides at the counter.
Does the scheme complicate VAT returns?
Only if unreconciled — with a monthly routine aligning scheme reports to your returns, the VAT side stays clean and mechanical.
Registered but Running It by Guesswork?
We will document your workflow, train the team, and build the monthly reconciliation that keeps your scheme record — and your VAT returns — spotless.
