VAT Administrative Exceptions You Can Apply In the UAE

The Federal Tax Authority (FTA) in the UAE released a recent guide providing the procedures and scope for certain exceptions from VAT procedures.

A VAT Administrative Exception is a mechanism which provides registrants with concessions / exceptions allowed by the Federal Decree-Law No. 8 of 2017 on Value Added Tax (“Law”) or Cabinet Decision No 52 of 2017 on the Executive Regulations of the Federal Decree-Law, if difficult circumstances prevent them from following certain procedural aspects of the Law or the Executive Regulations.

VAT Administrative Exceptions are grouped into the following categories:

  1. Tax Invoices & Tax Credit Notes
  2. Length of the Tax Period
  3. Evidence to prove the export of goods
  4. Time for the export of goods
  5. Stagger
  1. Tax Invoice, Tax Credit Note
    • Tax Invoice: A registrant can make a Request to:
      • Not mention any of the particulars specified in Article 59(1) or Article 59(2) of the Executive Regulations for Tax Invoices; or
      • Not issue Tax Invoices in certain cases.
    • Tax Credit Note: A registrant may make a Request to:
      • Not mention any of the particulars, as prescribed in Article 60(1) of the Executive Regulations for Tax Credit Notes; or
      • Not issue a Tax Credit Note in certain cases.

On producing enough reasons to support the request with valid documents required, the applicant may be allowed permission for not mentioning certain requirements as required for Tax Invoice & Credit Notes or may be allowed not to raise these documents If Person can prove that it would be impractical to issue a tax invoice as per Article 59(1) or Article 59(2) of the Executive Regulations or a Credit Note as per Article 60(1) of the Executive Regulations.

2. Change of period

A registrant may make a request to change the length of the Tax Period. If the registrant chooses to change the length of the Tax Period to half yearly (6 months), the FTA will only consider allowing this for the following categories:

  1. Individuals such as board members, property owners and freelancers
  2. Business in a constant refund position

Small and medium enterprises (SME) with official funding approved by any government entity where taxable supply for the previous 12 calendar months was equal or less than AED 9million.

Such VAT in UAE registrants who do not often make taxable supplies, or if their only taxable income arises once a year or half-yearly and their VAT 201 submitted is either nil or in a refund position are generally more probable for obtaining this exception to file VAT return from quarterly to half-yearly from the authority.

Change in Stagger:- A registrant, who is on quarterly filing, may request a change in the stagger assigned to him so that the Tax Period ends with the month requested by him.

3. Evidence to prove export of goods

There have been many practical scenarios due to operational procedures some business were not able to obtain official and commercial documents to support export of goods to qualify for VAT in UAE at zero rate.

With this recent update from the FTA, the registrant can request to FTA for alternative documents as an evidence to prove the export of goods.

4. Time for the export of goods

As per Article 30 of the Executive Regulation for direct and indirect export to qualify zero rate VAT in UAE the export should be done within 90 days of the date of supply.

In this VAT administrative exception, on valid grounds the FTA can extend this 90-day period based on the request by the registrant.

Who can make the Administrative Exception request?

The request can be submitted by –

  • A registrant with the FTA, authorized signatory of the registrant or registrant’s appointed Tax Agent,
  • Satisfy the requirements in respect of the relevant Exception Request and
  • Provide all relevant supporting documentation.

How to make a request?

The request can be submitted through email to specialexceptions@tax.gov.ae

We are happy to support and guide your company for any of the above-mentioned requirements.