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.
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
Getting the Counter Process Right
For a registered merchant, compliance lives at the counter. Staff must verify the customer qualifies, meet the minimum spend, issue the tax-free tag correctly through the Planet system against the passport, and hand over the right documentation. Most refund failures trace back to a counter step done wrong — a tag issued to an ineligible customer, or details that do not match. Training and a simple checklist at the till are what keep the merchant's refunds validating.
- Verify the customer qualifies
- Meet the minimum purchase value
- Issue the tag correctly via Planet
- A till checklist prevents failures
Books That Reconcile
Behind the counter, the merchant's records have to reconcile the tax-free sales with its VAT accounting. Tax-free transactions still affect the VAT position and must be recorded correctly, and the Planet system's data should tie to the store's sales. A merchant whose tax-free sales do not reconcile to its books creates exactly the inconsistency an FTA reviewer looks for — so the back-office discipline matters as much as the counter one.
- Reconcile tax-free sales to the VAT accounting
- Record the transactions correctly
- Planet data tied to store sales
- Consistency the FTA expects
Staying in Good Standing
Remaining a scheme merchant means keeping the obligations current: a valid VAT registration, a working Planet integration, staff who know the process, and clean records. Lapses — an expired registration, a broken integration, untrained new staff — produce failed refunds that reflect on the store and can jeopardise participation. Treating the scheme as an ongoing standard to maintain, not a one-time signup, is what keeps the commercial benefit flowing.
- Keep VAT registration and Planet integration valid
- Keep staff trained on the process
- Maintain clean, reconciled records
- Treat it as an ongoing standard
Related Exiloz Services & Guides
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.
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.
What are a tax-free merchant's main duties?
Verifying customers qualify and issuing tags correctly at the counter, reconciling tax-free sales to its VAT accounting, and keeping registration, integration, training and records current.
Why do tourist refunds fail at merchants?
Usually a counter error — a tag issued to an ineligible customer or details that do not match — which fails at validation. Training and a till checklist prevent most failures.
Do tax-free sales affect my VAT return?
Yes — they still form part of your VAT accounting and must be recorded and reconciled correctly, with the Planet data tying to your store's sales.
How do I stay a registered tax-free merchant?
Keep your VAT registration and Planet integration valid, staff trained, and records clean — lapses produce failed refunds and can jeopardise participation.
What is the merchant's main responsibility?
Issuing tax-free tags correctly at the counter for qualifying sales, reconciling those sales to its VAT accounting, and keeping its registration, integration, training and records current.
What happens if a merchant issues tags incorrectly?
The refund fails at validation, frustrating the customer, and repeated failures can reflect on the store and jeopardise its participation — which is why counter training matters.
Do tax-free sales still appear on my VAT return?
Yes — they form part of your VAT accounting and must be recorded and reconciled correctly, with the Planet data tying to your store's sales.
Can a merchant lose its tax-free status?
Yes — lapses such as an expired VAT registration, a broken Planet integration or repeated failed refunds can jeopardise participation, so the obligations must be kept current.
The rest of what we do
Licence, visas, bank account, books and the first tax return — handled by the same team, so the structure has to survive its first year.
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PRO & Document Clearing
Establishment card, immigration file, visas, medicals and attestation.
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VAT Registration
Threshold checks, grouping and registration handled against the FTA's current rules.
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VAT Return Filing
VAT201 prepared, reconciled and filed, with the position documented.
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Corporate Tax Registration
Every taxable person must register, including free zone companies applying 0%.
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Corporate Tax Filing
Returns, elections and the qualifying income analysis behind them.
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Accounting & Bookkeeping
Books kept audit-ready from month one, not reconstructed at year end.
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Audit Preparation
Schedules, reconciliations and the evidence your auditor will ask for.
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Payroll & WPS
Payroll, WPS files and end-of-service calculated correctly.
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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.
