April 28, 2025

Tax Regulations on Purchases Made in Dubai for Luxury Goods

Dubai is a prominent shopping destination that applies a 5% Value Added Tax (VAT) on most goods and services, including luxury fashion and tailoring. This VAT rate, introduced in January 2018, is lower than in many other global cities. Tourists in the UAE are eligible for a partial VAT refund on purchases made from participating retailers.

Source: The United Arab Emirates' Government portal

Let's Begin

Dubai has become a global name in luxury shopping—a place where style, precision, and personal taste come together. For us at Kachins Couture, this city has been home for decades. We’ve grown alongside its evolving fashion scene, tailoring garments for individuals who value both detail and fit.

In Dubai, shopping is more than just picking pieces off a rack—it’s about choosing how you want to look and feel and having that choice made just for you. Our work reflects that. Every suit we create is built around the person wearing it, stitched with intention, and shaped with care. This city understands luxury not as excess, but as refinement. And we’re proud to be part of that story, right here in the heart of it.

Shopping in Dubai: A Smart Choice for Luxury Buyers

Dubai isn’t just known for its skyline; it’s built a global reputation as a place where luxury shopping feels both effortless and rewarding. Shoppers from around the world come here for the experience: spacious stores, attentive service, and an unmatched variety of high-end fashion and goods.

But beyond the appeal of aesthetics and brands, there’s a practical side to shopping in this city that many overlook. With favourable tax rules and a refund system designed specifically for tourists, high-value purchases become more accessible without compromising on quality or experience.

That’s where Dubai truly stands out. While many global fashion capitals impose steep taxes that quietly inflate the final price, Dubai offers shoppers more breathing room—and more value. If you’re planning to invest in tailored clothing or premium fashion, it helps to understand how the numbers stack up.

Here’s a closer look at how VAT applies in some of the world’s leading luxury shopping destinations—and why Dubai continues to be a smarter place to spend.

*Tax advantages mentioned are subject to local regulations and tourist refund policies.

VAT Rates in Global Fashion Cities

United Kingdom: VAT is 20% on most goods. As of 2021, the VAT Retail Export Scheme has been abolished, and tourists can no longer claim VAT refunds.

(Source: GOV.UK | GOV.UK )

France: The standard VAT rate is 20%. Tourists can receive a VAT refund of approximately 12% after administrative fees, depending on the item and the retailer.

(Source: Planet)

United States: There is no national VAT, but sales tax applies. In New York City, for example, the combined sales tax rate is 8.875%. Additional import duties may apply to luxury items, ranging from 3–20%.

(Source: NYC Department of Finance)

*Rates and refund options are based on available data and may change based on local government decisions.

Dubai’s VAT Refund System

VAT Rate: 5%, applicable on most goods and services.
Minimum Spend: AED 250 per tax-free invoice.
Refund Eligibility: Tourists can reclaim 85.5% of the VAT paid (87% of the 5% VAT), after deducting a fee of AED 4.80 per transaction.
Participating Retailers: Refunds are only available from stores registered with the UAE’s official VAT refund operator, Planet Tax-Free.
Validation Process:

Validation must be completed within 90 days of purchase.
Tourists must leave the UAE within 6 hours of validating receipts.
Validation can be done at airports, seaports, or land borders using kiosks or desks.

Refund Methods:

Cash: Up to AED 35,000, available at airports after immigration.
Card: Refunded to major credit cards within 9 days.

Time Limit for Refund Claims: Refund must be claimed within 12 months from the date of validation.

VAT refund terms are governed by the UAE’s Federal Tax Authority (FTA) and participating retailers.

Source: https://tax.gov.ae//Datafolder/Files/Pdf/2024/eng_the-guide-to-tax-free-shopping-in-the-uae-final-pdf.pdf | Federal Tax Authority

Online Purchases

Online purchases made from UAE-based retailers can also be eligible for a VAT refund if:

The retailer is registered under the VAT refund scheme.
The goods are delivered in the UAE and exported with proper validation at departure.

*Eligibility for VAT refunds on online orders depends on export validation and retailer registration.

Kachins Couture: Defining Luxury Tailoring in Dubai

In a city known for luxury, we’ve had the privilege of shaping what that means in the world of bespoke fashion. At Kachins Couture, we are more than just a tailoring house; we are part of Dubai’s identity—a destination for those who value elegance, detail, and individuality.

In Dubai, luxury is part of everyday life, and the standard for quality is both high and clearly defined. For us, luxury is not measured by price or exclusivity, but by control over process, clarity in execution, and consistency in outcome. We define it through precision and an experience that respects the client’s time as much as the final result.

Statements reflect our brand perspective and local market insights. VAT policies remain subject to official laws.

Summing Up

Dubai has positioned itself as a global centre for high-value shopping, where both the product and the process are held to a measurable standard. Its tax system, supported by efficient refund mechanisms, offers clear advantages for buyers of luxury goods. For individuals investing in premium goods, Dubai remains a location where quality and value align.

*This content is for informational purposes only and does not constitute tax or legal advice. Terms apply under UAE VAT regulations, and any tax benefits mentioned are based on publicly available information and are not guaranteed.

FAQs

1. What is the standard VAT rate in Dubai?

The VAT rate in the UAE is 5%, applicable to most goods and services.

2. Are tourists eligible for a VAT refund in Dubai?

Yes. Tourists can claim a partial refund on VAT paid for eligible purchases from registered retailers.

3. What is the minimum spend required for a VAT refund?

A minimum of AED 250 per invoice is required to qualify for the VAT refund.

4. Can online purchases qualify for a VAT refund?

Yes, if the purchase is made from a registered UAE retailer and the goods are exported with proper validation.

5. Is validation required before departure?

Yes. Purchases must be validated within 90 days of the transaction, and travellers must exit the country within 6 hours of validation.

*Terms & Conditions for Information Shared in This Article

The information provided in this article is for general awareness purposes only and reflects publicly available data and government-issued guidelines as of the time of writing.

While we aim to keep all details accurate and up to date, tax regulations, refund procedures, and eligibility criteria may change without prior notice. Readers are encouraged to verify details with the official UAE Federal Tax Authority or relevant government websites before making any purchasing decisions.

Kachins Couture does not provide tax or legal advice. Any purchases made, either in-store or online, are subject to the terms set by local authorities and retailers. Eligibility for VAT refunds is determined by official criteria, and we do not guarantee refunds on purchases unless confirmed through approved tax refund channels.

By reading this article, you acknowledge that Kachins Couture is sharing this information in good faith and holds no liability for actions taken based on the content.

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