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UAE VAT Refunds for Foreign Businesses

Starting March 2020, any foreign business may be able to submit  request for VAT refund with FTA in UAE. This is for the calendar year 2019. Any request for VAT refund in UAE must be submit  before the set deadline by the FTA.

Eligibility of Foreign Businesses for UAE VAT Refund

In order for a foreign business to quality for a VAT refund, the business mustn’t have a permanent place of establishment anywhere within the UAE. There must not any managed, controlled or legally established commercial space in the country. The business also shouldn’t consider as a taxable person within UAE. This does not apply to businesses that required in registering or have already registered for VAT in UAE.

In addition, business should be VAT registered or registered for equivalent of VAT in home country or where it was established.

Foreign businesses that are able to claim VAT refunds in UAE belong to the following countries:

  1. Austria
  2. Bahrain
  3. Belgium
  4. Denmark
  5. Finland
  6. France
  7. Germany
  8. Iceland
  9. Isle of Man
  10. Korea
  11. Kuwait
  12. Luxembourg
  13. Lebanon

If your country is not mentioned above, then you have to consult with a regulated tax agent in UAE to assist you in the processing of VAT refunds for foreign businesses visiting the UAE.

What needed for UAE VAT Refund applications?

  • Duration- The application VAT refunds for foreign businesses visiting UAE to cover purchased products or services which subject to VAT. The Purchases have made over a period of one calendar year. It isn’t possible to send an application for VAT refunds for the purchases from the past several years.
  • Minimum amounts – it's only possible for a foreign business visiting the UAE to obtain VAT refunds. If applications concern VAT amount that’s at least Dhs 2,000 for each application.
  • Documentation – There must be invoices enclose together with the VAT refund application. When a foreign business pays import VAT, receipt for such payment (can be copy or the original receipt) also needs to be submitted. An invoice has to contain the following crucial details: date of issue of receipt, invoice number, address and name of the purchaser, price of goods, amount or quantity of the goods, nature or description of the items, TRN or tax registration number of the supplier, VAT amount, and name and address of the supplier. Where the application for VAT refund concerns diesel oil and petrol that are purchase at any petrol station. The receipt or bill may state the registration number of the vehicle instead of the address and name for the business. Where the documentation for purchase is a bank statement that is from an oil and petrol company concerning credit of diesel oil and petrol, receipts can be submitted in connection with every individual purchase.
  • Certificate – If you haven’t applied for UAE VAT refund previously. Then there is a need to furnish documentation regarding commercial business that being ran in country of domicile. A certificate has submitted to provide proof that there is an actual business from another jurisdiction. A certificate has issued by any competent authority in the business’ country of domicile. Certificate is valid for an entire year. When a certificate has been issued more than a year ago, there is a need to provide another certificate.

You have to provide complete and correct information to the Federal Tax Authority (FTA) in UAE. Insufficient information can result tot eh tax authority rejecting an application. Also, you may given a fine or penalty if you present the authorities with misleading or incorrect information. This also applies to the withholding of information which is relevant to an application’s treatment.

Where VAT has refunded to the foreign business unlawfully, amount will be scheduled for collection by the authorities in accordance with any applicable UAE provisions. The amount collected by authorities will accordance with contracts on mutual collection of VAT concluded with the jurisdiction in which the business was established. This applies as well to any fine or penalty.

VAT that is unlawfully refunded, as well as fines, can set off by Federal Tax Authority in UAE against subsequent claims or applications for UAE VAT refunds.

Read more: VAT Refund in UAE: Guide for Foreign Businesses

Regulated Tax Agents in UAE

It is recommend to authorize experts in handling the work that is associate with filing for VAT refunds in UAE. General conditions do not change; however, it will increase the chances of the business to get the approval of the authorities for reclaiming VAT which was spent while visiting the UAE.

If you wish to consult with regulated tax agents in Dubai, call us here in Farahat & Co to schedule a consultation with our VAT team.