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Procedure for VAT refunds for taxable persons in UAE

The business entities also referred to as the taxable persons are required to follow the FTA guidelines for all kinds of transactions in the UAE. VAT refunds are a way of recovering the extra tax paid by the taxable persons from the government. This write-up shall be discussing the possible VAT refunds for taxable entities in the United Arab Emirates and will guide you in claiming the VAT refunds from the authorities. This article will guide you through preparing for your VAT refunds in UAE.

What are VAT Refunds for Taxable Persons in UAE?

The taxable person is generally a business, sole trader, or professional who is carrying out any economic activity, whatever the result or purpose of that activity.

Taxable persons in the UAE can now apply for a VAT refund whenever they have a credit against them. In the cases where the input tax exceeds the output tax. It is mandatory for all the taxable people in the UAE to file their taxes at the end of each tax period. The FTA has mandated that all taxable persons file a return no later than the 28th day of the end of the tax period. The regulation has also defined the standard period for tax period as a three-calendar-month the end of which is defined by the authority.

Purpose of VAT refunds for taxable persons in the UAE

All business entities that are registered for VAT in the UAE are supposed to submit a VAT return that sums up the VAT that is due to the FTA. In cases where the input tax stands more than the output tax on a VAT return, the business owner is eligible to request for refund of the VAT post submitting the return or at a later stage when they have a credit amount that has been owed against them.

VAT refund for taxable persons in the UAE time period

Once the business entity registered for VAT in the UAE applies for the claims for the refund of the access refundable tax, within 20 working days of the application, the FTA reviews the submitted application and notifies the applicant if the application has been accepted or rejected.

In exceptional cases, the FTA may require more than 20 days for reviewing a VAT refund claim application and in such cases, they may notify the same to applicant.

Read also: VAT Refund for UAE Nationals Building Residences

The procedure of submitting VAT refunds for taxable persons in the UAE

The VAT refunds are supposed to be filed by VAT-registered business entities or taxable persons in the UAE. The method for it has been described below. However, in case of any kind of doubts in filing VAT returns of taxable persons in Dubai, one must consult the tax consultants in UAE, who are experienced and knowledgeable in this field.

This helps in avoiding any kind of errors in filing the return and hence heavy fines and penalties levied by the Federal Tax Authority at a later stage.

The basic steps for filing a VAT refund in the UAE are mentioned below-

Step 1: Logging into the client account at the FTA website

The registered taxable person has to login in to the Federal Tax Authorities e-services portal. If not registered, one must register their business on the FTA website and fill in all the details correctly.

Step 2: Form initiation

The next step involves going on to the VAT tab and then clicking on the VAT refunds tab. Clicking on the “VAT Refund Request” tab will give access to the form.

Step 3: Completing the refund form

This step involves filling out the refund claim form. Some fields in the claim form might be prefilled from the data contained in the registration form. One must ensure that all the data filled in is exact and correct. Any doubt shall be clarified with the help of the tax consultants in the UAE as discrepancies might result in heavy losses on part of the business owners and can also lead to bankruptcy of the firm. Therefore, one must be very careful while filling out this form.

Step 4: Submitting the claim form

Once the form has been filled, one can submit the form by clicking on the submit button. The status of the application is communicated to the applicant via email. Once the claim has been verified by the FTA, the amount gets refunded to the user within 5 working days.

Step 5: Submitting the claim form

Once the approval has been obtained from the FTA, the confirmation email is sent by the FTA. Once the confirmation email has been received, the balance can be seen in the “My payment” tab under the section that displays all the transactions that have taken place to date.

One must follow the above-mentioned steps and also ensure that the VAT return submitted by them is correct and all the voluntary disclosures are in place. Any discrepancies in the filing of VAT returns can result in heavy fines and penalties for business owners. Tax Consultants in the UAE are the sure-shot people to approach if you want to avoid such fines and issues.

How VAT registration in UAE can help you in filing VAT refunds for taxable persons in the UAE?

The VAT registration UAE has a team of experienced tax consultants in Dubai. They are well updated with the latest guidelines of the FTA and are well-versed with all the processes related to VAT registration as well as filing. Therefore, if you are looking for the process of filing a VAT return in the UAE and are not sure as to how you can go about it, then wait no more and get in touch with us to get it done smoothly. We will be helping you in getting your business registered for VAT at the FTA portal, and also, we will assist you in ensuring that your business procedures and transactions are compliant to the latest guidelines published by the FTA.

Read also: VAT Registration Conditions and Requirements in UAE

Ervee is a CPA with international experience in Tax and Accounting. He has over 12 years of experience in accounting and bookkeeping and over a year in VAT implementation, registration, and accounting in UAE. He regularly drives out inefficiencies in company operations and loves the challenge of helping clients find additional ways for an easier and improved compliance and verification of transactions.