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UAE tax authority issues $872mn VAT refunds to nationals building new homes
The Federal Tax Authority (FTA) has processed VAT refunds worth AED3.2 billion for UAE nationals constructing new residences, according to data released on Sunday covering the period up to June 2025.
The authority approved approximately 38,000 applications for the residence refund scheme since its launch eight years ago.
This represents growth from 31,000 approved applications valued at AED2.54 billion recorded by June 2024.
UAE Federal Tax Authority approves 38,000 residence VAT refund applications worth AED3.2bn
Between June 2024 and June 2025, the FTA approved more than 7,000 new applications worth AED653.1 million.
In the first six months of 2025 alone, 3,097 applications received approval, generating refunds totalling AED284.77 million.
The data shows a 22.74 per cent increase in application numbers and a 25.72 per cent rise in refund values over the past year.
The digital tax refund system for tourists expanded to include 18,410 retail outlets by June 2025, compared with 17,720 outlets at the end of 2024 and approximately 17,080 outlets by June 2024.
During the first half of 2025, 697 outlets connected to the system, representing a 29 per cent increase from the 540 outlets that joined during the same period in 2024.
Over the past two years, including the first half of 2025, 3,390 outlets have joined the tourist refund system.
The authority operates 96 self-service machines that process tourist tax refunds in approximately two minutes per transaction. These machines are located at shopping malls, hotels, and tourist departure points.
'The indicators reflect the ongoing development and upgrade of our digital systems in line with global best practices, and in alignment with the UAE's digital transformation strategy. The Authority's initiatives in this regard have positively impacted the overall quality and performance of its services, particularly the digital VAT refund systems for eligible categories,' Khalid Ali Al Bustani, Director General of the FTA said.
Al Bustani highlighted the 'Maskan' smart application, which processes VAT refunds for UAE nationals through paperless procedures with fully digitised operations.
The FTA launched the world's first e-commerce purchases VAT refund system for tourists in December 2024.
The system allows tourists to claim refunds on online purchases made during their stay in the UAE.
'As part of its efforts to develop digital services, FTA launched last December the world's first e-commerce purchases VAT refund system for tourists during their stay in the UAE, supporting the UAE's leadership in all sectors, including the tourism sector and the e-commerce sector,' he added.
The digital platform enables tourists to scan passports, share transactions as digital invoices, check invoices through a shopper portal, and receive refundable tax credits through fully digitalised procedures.
Al Bustani confirmed the authority would continue implementing digital transformation projects in the tax sector to support the government's strategy for reducing bureaucracy and maintaining customer satisfaction levels.
