FTA Reports AED 3.2 Billion In Tax Refunds For UAE Nationals Constructing New Residences By June 2025

The Federal Tax Authority (FTA) has reported impressive outcomes from its digital VAT refund systems for eligible categories, maintaining high accuracy and efficiency through 2025. The FTA shared results for the first half of the year, focusing on VAT refunds for new residences for UAE nationals and tourists.

Since the service's inception around eight years ago until June 2025, approximately 38,000 applications for VAT refunds related to new residences for UAE nationals have been approved. This amounts to a total value of AED3.2 billion. This represents a notable increase from June 2024, when 31,000 applications valued at AED2.54 billion were approved, showing a 22.74% rise in applications and a 25.72% increase in refund value over the past year.

The FTA also noted that over 7,000 new applications for VAT refunds by UAE nationals constructing new residences were approved between June 2024 and June 2025, totalling AED653.1 million. In the first half of 2025 alone, 3,097 new applications were approved, resulting in refunds amounting to AED284.77 million.

The digital tax refund system for tourists has seen significant growth as well. By June 2025, the number of retail outlets linked to this system increased to 18,410 shops across all emirates. This is up from 17,720 shops by the end of 2024 and about 17,080 shops by June 2024.

In the first half of 2025 alone, an additional 697 outlets connected to the system compared to just 540 during the same period in 2024. This marks an increase of over 29%. Over the past two years, including early 2025, a total of 3,390 outlets have joined this digital tax refund system for tourists.

Self-service machines that automate tax refunds for departing tourists in about two minutes per transaction are now widely available at major shopping malls and hotels. By June's end, there were 96 such machines installed.

Strategic Initiatives

Khalid Ali Al Bustani, Director General of the FTA stated: "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." He highlighted that these initiatives have positively impacted service quality and performance.

Al Bustani mentioned key initiatives like 'Maskan,' a smart application enhancing VAT refund ease for UAE nationals through fully digitised procedures without paper reliance. He added that last December saw the launch of the world's first e-commerce purchases VAT refund system for tourists during their stay in the UAE.

Future Developments

This initiative supports leadership across sectors including tourism and e-commerce by offering a seamless experience with paperless procedures allowing tourists to scan passports easily and receive refundable tax credits digitally. Al Bustani emphasised ongoing projects aimed at digital transformation within the tax sector aligning with government strategies to reduce bureaucracy while ensuring customer satisfaction remains high.

With inputs from WAM