VAT Refund in Dubai

What is a VAT Refund?

Each taxpayer is supposed to submit a VAT return that describes the VAT payable to the Federal Tax Authority (FTA) for the taxable period. If the input tax exceeds the amount of output tax on a VAT return, the taxpayer is entitled to a VAT refund in UAE.

HLB HAMT employs qualified VAT consultants in the UAE that examine corporate taxpayers’ periodic files in a variety of industries. Our experts will assist you in securing a VAT refund in UAE from the FTA.

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    Duration of Refund

    The FTA will assess and analyze a taxpayer’s refund claim within 20 business days of receiving the VAT refund application. If the application is granted or refused by the FTA, the taxpayer will be alerted. The FTA will notify the taxpayer and demand a deadline extension if the process requires more than 20 days.

    VAT Refund Form

    The following fields are found on the VAT refund form:

    • TRN (Tax Registration Number) – The information on the taxpayer’s account in the User Profile page is used to pre-populate this entry. It’s a good idea to double-check that the right TRN is given.
    • Total amount of refundable tax overage (in AED) – The formula Refunds – Penalties = Excess Refundable Tax is used to pre-populate this column.This covers all refunds recorded in past VAT returns, as well as any administrative penalties owed, with the exception of the late registration penalty.
    • The amount you’d like to refund (in AED) – The amount you input must be equal to or less than the total amount of excess refundable tax shown in the Total amount of Excess Refundable Tax box.
    • Amount of eligible Excess Refundable Tax that remains – The amount of refundable tax that you can apply for in the future is pre-populated in this area.
    • The amount of the late registration penalty (in AED) – This field is pre-populated based on the fines you’ve received and whether or not you’ve paid them:
      • If you don’t have any penalties, the field will reflect “Zero” (AED).
      • If you have been issued with a penalty and settled it, the field will read “Zero” (AED).
      • If you’ve been assessed a penalty but haven’t paid it yet while requesting this refund, the penalty amount will be reflected in this area.
    • Signature of an Authorized & Declaration – The technology pre-populates the authorised signatory in both English and Arabic. Prior to clicking ‘Yes’ to submit the form, make sure you’ve read the statement completely.

    Special VAT refund process in UAE

    For business visitors and UAE natives working in the development of new residential structures, there are special VAT refund processes.

    I. Business Visitors

    Criteria for admissions

    • The company should be based in a GCC member state and be a foreign corporation that conducts business there.
    • The company should be based in a nation that reimburses VAT to UAE companies.
    • In the UAE, the business owner should not be a taxable person.
    • The company must be incorporated in the GCC member state in which it is based.

    Timeline & Refund Limit

    Every refund claim is subject to a 12-month time limit, and tax claims made by business visitors under the Foreign Business Scheme must be for a minimum of AED 2000.

    II. UAE nationals involved in building new residences

    In order to file a refund claim, UAE nationals should follow the procedure of filling out the refund form found on the FTA’s website.

    Criteria for admission

    The individual requesting the return must be a UAE native with accompanying paperwork, such as a family book or passport, to prove their nationality.

    Timeline

    Submit your reimbursement request to the FTA within six months of the building’s completion date.

    Documents Needed to Claim VAT Refund in UAE

    • A copy of your passport, Emirates ID, is required.
    • A copy of the certificate from the funder
    • A document proving ownership of a certain block of land in the UAE.
    • Documents to back up your assertion about the building’s completion date.
    • A copy of the construction permit
    • Documentation to back up your assertion that the structure is occupied (such as utility bills)
    • A copy of the verification certificate for your bank account

    VAT Refund Process in UAE

    • The store must issue a legal tax invoice and other necessary paperwork to the foreign visitor who wishes to participate in this scheme after the sale of products. The retailer is responsible for accounting for output VAT.
    • Overseas tourists must request VAT refunds directly from the operator, giving adequate and good documentation as required by the government.
    • The operator will seek repayment from the store that sold the products for the VAT amount repaid to the tourist.
    • Where the retailer has successfully refunded the VAT amount to the operator, the retailer may use the amount as a drop of output VAT that occurs in the tax period in which the refund was received, which will most likely be reported as a negative number.
    • The operator is allowed to charge costs for administering the refund under the scheme, and these fees may be deducted from the amount to be refunded to the overseas visitor. The fees must not be higher than those set by the cabinet.
    • For the validation/inspection of the request and items, the operator and customs will work together.
    • The system establishes a minimum value for reimbursement claims, which will be established by the chairman of the authority’s board of directors.

    Could a foreign company qualify for a tax refund?

    The following foreign businesses are qualified to request for a VAT refund under the business VAT refund scheme:

    a. The business is based in a GCC country that has not yet introduced VAT

    The business VAT reimbursement plan is available to businesses based in GCC states that have not yet imposed VAT.

    b. There would be an overseas business operating in a nation well outside the GCC that meets the specified criteria:

    • Does not have an established or permanent presence in the UAE or another country that has adopted VAT.
    • It must come from a nation that offers VAT refunds to UAE businesses in familiar situations.
    • It should be certified as a business with the appropriate government in the jurisdiction where it is located.
    • Must not be a taxable individual

    Claiming VAT Refunds in UAE for Tourists

    The UAE government, in partnership with the Federal Tax Authority (FTA), has made it legal to claim VAT refunds in UAE for tourists for purchases made in the nation. The procedure is made feasible by an integrated digital system that was implemented.

    • Tourists who purchase at UAE stores might get a refund if they meet specific criteria. The following are given below:
    • Beginning on the day of delivery, purchased items must be transported out of the United Arab Emirates.
    • Confirm that they buy from shops who participate in the “Tax Refund for Tourists Scheme.”
    • The purchase of items must be carried out in accordance with the FTA’s standards.
    • The FTA’s Refund Scheme cannot be used to exempt goods purchased.
    • Beginning on the day of delivery, purchased items must be transported out of the United Arab Emirates.

    Where can tourists get a VAT refund for their purchases, and how can they get it?

    Tourists can refund taxes using a completely digital platform operated in collaboration with a global operator, according to the Federal Tax Authority.

    Tourists will collect their refunds by presenting tax receipts for purchases made at stores listed in the Scheme, alongside photocopies of their passport and credit card, to a special device located at the exit port – airport, seaport, or border terminal.

    Tourists could either retrieve the VAT in cash in UAE dirhams or have it sent over to their credit card after these documents are verified.

    What items are eligible for VAT refunds in the UAE for tourists?

    • All products can be assessed for VAT refunds by tourists in the UAE at airports, and seaports, with the exception of the following:
    • Goods that have been consumed entirely or partially in the UAE or an adhering state.
    • All automobiles, including aircraft and boats.
    • Goods that aren’t followed by an international tourist when they leave the UAE.

    Export VAT refund

    The UAE government has suggested different special refund schemes under VAT, whereby certain designated people are eligible to a refund of VAT levied on purchases performed in the UAE. Certain requirements have been set down in each of these schemes that must be met by these individuals in order to get a VAT refund in UAE.

    I. Citizens of the UAE are constructing residences

    This applies to UAE residents who own or buy land in the UAE and establish or commission the construction of their personal residence on such land. These UAE nationals would be able to receive a refund of the VAT they paid on the construction costs of their home.

    II. Visitors from the business

    Foreign businesses can seek a return of VAT paid on expenditures spent in the UAE under the business VAT refund scheme.

    III. Foreign Visitors

    Foreign visitors the UAE who are not residents of any of the GCC VAT adopting states are eligible for this reimbursement scheme. These visitors will be able to obtain a VAT refund on products purchased while in the UAE.

    IV. Governments, diplomatic bodies and missions, and international organizations from other countries

    Foreign governments, diplomatic entities and missions, and some international organizations are all covered under this concept. The tax paid by such individuals on purchases purchased in the UAE would be repaid.

    Frequently Asked Questions – VAT Refund in UAE

    1. What is the concept of a foreign business?

      Whatever business that is registered with a functional government in the area where it is formed is considered a foreign business.

    2. Who qualifies for a VAT refund?

      Only foreign visitors aged 18 and over are qualified for a VAT refund on eligible products purchased in the UAE during their stay.

    3. What is the customs clearance time frame?

      Customs clearance has a 90-day deadline.

    4. Is it possible for businesses to claim VAT on expenses?

      VAT can be claimed by businesses in the following situations:

      1. If the company is VAT registered, they might get a vat refund on their expenditures.
      2. VAT should be accurately charged.
      3. Businesses must have sufficient documentation proving that VAT has been paid.
      4. Only the amount paid within 6 months of the delivery date is eligible for a VAT input tax refund.
    5. Who is not entitled to a VAT refund in the UAE?

      The company’s VAT return system does not allow a foreign tour operator to obtain a tax refund.

    6. What is the required minimum spending for VAT refunds in UAE?

      AED 250.

    7. How long does the VAT refund in UAE businesses last?

      Within 20 business days after receiving a refund claim, the FTA will review and analyze it.

    8. What information does a tourist require in order to request for a VAT refund?

      To be eligible for a refund, a tourist must get a tax invoice from the vendor that complies with all statutory requirements, as well as any other necessary paperwork proving that the tourist made a refundable transaction.

    9. What is necessary during export validation?

      1. The tax return tag applied to the back of your sales receipt
      2. Goods purchased
      3. Passport
      4. Boarding Pass
    10. Who is entitled to shop tax-free?

      Tax-free shopping is available to anybody above the age of 18 who is not a UAE resident. Other GCC nationalities are included in this category.

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