When the input tax is greater than the output tax on a VAT return, the taxpayer can request a VAT refund after filing their VAT return.
When a taxpayer submits a claim for refund, the FTA will process and review the application within 20 business days of submission.
Foreign businesses that meet the following conditions are eligible to apply for a VAT refund:
- They have no place of establishment or fixed establishment in the UAE or other GCC implementing state;
- 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 timeline for each refund claim is 12 calendar months and the minimum amount of each tax claim submitted by business visitors under the Foreign Businesses Scheme is AED 2000.
The new residence VAT refund scheme is applicable to UAE nationals, who meets following criteria to be eligible for this scheme are:
- The claim should be made by a natural person who is a UAE national.
- The claim should relate to a newly constructed building to be used solely as residence of the person or the person’s family.
Under this scheme, such a person will be entitled to claim a refund of the tax paid on the expenses of constructing the residence.
The expenses on which refund of VAT paid can be claimed under this scheme are:
- Services provided by contractors, including services of builders, architects, engineers, and other similar services necessary for the successful construction of the residence.
- Building materials, being goods of a type normally incorporated by builders in a residential building or its site. This does not include furniture or electrical appliances.
Refund form is to be submitted to the FTA within 6 months after the date of completion of the building. The date of completion is the earlier of:
- When the building becomes occupied
- When the building is certified as completed by the Municipality as mandated by the FTA
Tourists and visitors can claim refund on VAT paid on purchases they made during their stay in the UAE. Recovery of payment will be done through a fully integrated electronic system which connects retailers registered in the ‘Tax Refund for Tourists Scheme’ with all ports of entry and exit from the UAE.
For a tourist to claim VAT refund on purchases he made in the UAE, he must fulfill certain conditions:
- Goods must be purchased from a retailer who is participating in the ‘Tax Refund for Tourists Scheme’
- Goods are not excluded from the Refund Scheme of the Federal Tax Authority
- He must have the explicit intention to leave the UAE in 90 days from the date of supply, along with the purchased supplies
- He must export the purchased goods out of the UAE within three months from the date of supply
- The process of purchase and export of goods must be carried out according to the requirements and procedures determined by Federal Tax Authority.