Generally, however, few countries outside the European Union refund VAT directly to foreign businesses, although the situation has been changing in recent years. For example, the United Arab Emirates, Bahrain and Saudi Arabia introduced a VAT legal framework that allows recovery of VAT by foreign businesses.2 Kuwait, Oman and Qatar are expected to follow the same path in the near future. Georgia recently launched a direct refund to EU entities.
There would also be a risk that the foreign VAT refund would be vulnerable to more fraud and manipulation. However, with the increased use of technology, data analytics and e-audit, countries are better equipped to deal with the risks associated with granting refunds to foreign businesses.
Source: worldbank.org
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