All the registered business are required to file a VAT return furnishing the details of sales, purchases output VAT and input VAT paid during the tax period. Here, the output VAT is the amount which is collected on sales and Input VAT is the amount which is paid to the supplier towards purchases / expenses. The eligible input VAT amount will be allowed to be adjusted with the output VAT amount. After adjusting the output VAT and Input VAT, the result will lead to one of the following situations.
VAT Payable: If output VAT amount is higher than the Input VAT, the balance will be VAT payable which needs to be paid to FTA.
VAT Refundable: If output VAT is lesser than the input VAT amount, the excess balance will be VAT refundable.
The taxpayer has following two options in treating the excess input VAT commonly known as VAT refundable:
The taxpayer will be eligible to request for a VAT refund
If he does not wish to request for a refund of the excess input VAT, the excess recoverable tax will be carried forward to subsequent tax periods and can be used to offset against the payable tax and / or penalties, or he can apply for a refund later at any point in time.
At RVG, we can help you to get your refunds on the time.