The UAE Federal Tax Authority introduced a VAT refund for unregistered foreign businesses visiting the country. In this article, we’ll help business visitors and foreign businesses check whether or not they’re eligible in making a claim under the newly introduced VAT refund arrangement.
Submitted claims for UAE VAT refund under the special recovery arrangement made available to visiting unregistered businesses must be done in the official portal of the tax authority.
Qualified Foreign Businesses Under the Special UAE VAT Refund Scheme for Business Visitors
In this section of the article, we’ll address the questions we frequently get which are:
Can my unregistered foreign business claim a VAT refund in UAE? and
How can I be eligible to claim a VAT refund in UAE?
Foreign businesses who are entitled to the introduction of the VAT refund scheme for foreign business visitors to enjoy refunds on incurred VAT in UAE meet these conditions:
- They don’t have a fixed establishment or place of business located in the UAE or any Implementing State;
- The foreign businesses aren’t considered taxable persons for VAT in the UAE;
- They aren’t carrying out any business activities within the country; and
- They’re registered businesses or establishments with competent authorities in the jurisdictions where they are established.
Take note: a foreign government entity is not allowed to use the same form intended for unregistered foreign businesses visiting in the UAE to claim back tax incurred while in the UAE. A foreign business considered to be eligible has to obtain the refund from VAT paid in the country by submitting a request to the Federal Tax Authority of the UAE for a VAT refund under the special arrangement.
Ineligible Foreign Businesses Under the Special UAE VAT Refund Scheme for Business Visitors
A VAT refund under this newly introduced scheme isn’t available if the following applies to the foreign business:
- The foreign business is a taxable person in the UAE or makes supplies within the UAE unless the recipient has been obliged under relevant tax laws to take into account VAT with a reverse charge mechanism.
- Input tax was incurred on items or services that aren’t recoverable in accordance with UAE VAT regulations e.g. motor vehicles and entertainment for personal purposes.
- The foreign business comes from a jurisdiction that doesn’t offer VAT refunds to entities from the UAE in similar circumstances. Foreign businesses which are residents of GCC States that aren’t considered by the UAE Federal Tax Authority to be Implementing States in accordance with the UAE tax regulations, this specific condition doesn’t apply. This means that foreign businesses may still apply for VAT refunds under this scheme.
- The visiting unregistered foreign business isn’t a resident tour operator.
The Ministry of Finance of the UAE has provided a list of the approved countries that have reciprocal arrangements with the UAE. The list entitled, “List of Approved Countries with Reciprocal Arrangements with UAE for Business Visitors Tax Refunds” or the “Approved List” can be accessed on the official website of the Federal Tax Authority.
If your country isn’t on the Ministry of Finance’s approved list and/or your jurisdiction doesn’t have a system for Value Added Tax, it is advised that you contact your country’s Ministry of Finance so they are able to contact UAE’s Ministry for inclusion on the official list of approved countries. A foreign business is entitled to get a VAT refund for expenses that are incurred during or following the date the arrangement has been established between the country where the foreign business is registered and the UAE.
When to Claim a Refund Under the Special UAE VAT Refund Scheme for Business Visitors
You can start the process on how to claim a VAT refund for business visitors in UAE when it’s been established that your business is eligible under the new scheme and the following applies:
- The period for the refund claim is twelve (12) calendar months with the exception of the applicants that are residents of GCC States not considered as the Implementing States by the UAE Ministry of Finance;
- The VAT amount is at least AED 2,000. This is the minimum amount in which a request may be submitted for a VAT refund under the scheme.
To save time and resources in the processing of your tax refund under the Business Visitors Refund scheme, seek the expert guidance of tax specialists in UAE such as Farahat & Co. Hiring qualified VAT consultants in UAE can help maximize the VAT refunds that your business may be eligible for. At Farahat & Co, our experts use their comprehensive knowledge and experience on VAT-related procedures and regulations to the benefit of clients. Do you think you exceed the minimum amount of AED 2,000 for VAT refund claims? Call us today to know how our VAT experts in UAE can help!