The UAE government has published a VAT refund scheme which enables businesses/ business visitors to claim the VAT paid on the purchase of goods and services incurred in UAE.
Foreign businesses that meet the following conditions are eligible to apply for a VAT refund:
- The business should be located in a GCC member state other than the implementing state. The business should be a foreign entity that carries on business operations, but does not have a place of establishment or fixed establishment in the UAE.
- They are not a taxable person in the UAE;
- They are not carrying on Business in the UAE; and
- They are carrying on a business and are registered as an establishment with a competent authority in the jurisdiction in which they are established.
- The foreign business cannot claim a refund if the business makes a taxable supply in UAE.
- The applicant is not eligible to claim VAT incurred in connection with undertaking activities as a tour operator
- Input tax recovery is not permitted for VAT paid on non-recoverable input tax such as, entertainment services, motor vehicles which are available for personal use, etc.
- The foreign business is from a country in similar circumstances that provide tax refunds to UAE entities. (The approved countries with reciprocal arrangement with UAE Ministry of Finance (MOF) is mentioned at the end).
KEY POINTS REGARDING TIMELINE-
The timeline for each refund claim is 12 calendar months. The first refund application should be made at the end of 2018.
- The period of claim shall be a 12 calendar month.
- The claim for the 2018 calendar year (1st January 2018 – 31st December 2018), refund application can be made from 1st April 2019 to 30th September.
- The claim for 2019 calendar year (1st January 2019 – 31st December 2019), refund application can be made from 1st March 2020 to 31st August.
- The Minimum claim amount of tax that may be submitted under VAT refund for Foreign Businesses shall be AED 2000.
PROCEDURE TO REFUND VAT FOR BUSINESS VISITORS IN UAE-
- Sign Up with FTA portal-eservices.tax.gov.ae
- Download the form from the FTA website and fill in all the fields in the PDF. Your form will be rejected if it’s filled by hand.
- Add company details in the registered mail id portal.
- Print out the form and add your signature and official stamp. Once you’ve filled out the form, scan it and submit the soft copy to email@example.com.
- Only PDF, JPG, JPEG and PNG file types are accepted and the total size limit is 5 MB.
- All documents required for refund as discussed above should be sent to The Federal Tax Authority the document should reach within one month from refund request submission.
- The refund form will be processed within 4 months by the FTA
- Once the request is approved, the refund is expected to issue within 10 working days.
DOCUMENTS REQUIRED TO SUBMIT FOR A REFUND-
- Proof of incorporation in the respective country of establishment.
- Tax registration certificate of the respective country (if any).
- Bank Account details
- Copy of passport of the authorized signatory.
- Proof of authority of the authorized signatory.
- Original Tax invoices with proof of payment.