Value Added Tax (VAT) is a consumption tax levied on the value added to goods & services at each one stage of manufacture or distribution. Introduced in the United Arab Emirates (UAE) on January 1, 2018, VAT is governed by Federal Decree-Law No. (8) of 2017. The Federal Tax Authority (FTA) oversees the implementation and regulation of VAT in Dubai and the rest of the UAE.
To Whom It Is Applicable
Businesses
- Registered Businesses: Businesses registered for VAT in the UAE can claim refunds on the input VAT paid on their business expenses and purchases.
- Non-Registered Businesses: Certain non-registered businesses, such as those involved in international business activities, may also be eligible for VAT refunds under specific conditions.
Tourists
- Tourist Refund Scheme: Tourists visiting the UAE can claim a refund on the VAT paid on purchases made during their stay, provided these purchases are taken out of the country.
Foreign Businesses
- Foreign Business Scheme: Foreign businesses not established in the UAE can claim VAT refunds on expenses incurred during their business activities in the UAE, subject to reciprocal agreements between the UAE and the foreign business’s home country.
Government Entities and Charities
- Government Bodies and Charitable Organizations: Certain government entities and recognized charities can also claim VAT refunds on qualifying expenses.
Exhibitions and Conferences
- Non-Resident Businesses: Foreign businesses participating in exhibitions and conferences in the UAE.
- Event-Related Expenses: VAT incurred on costs related to participation in these events.
- Reclaim Event Expenses: Can claim VAT refunds on expenses such as registration fees, booth rentals, and related services.
New Residential Buildings
- First-Time Buyers: Owners of new residential buildings, including villas and apartments.
- First Supply within 3 Years: The claim must be made within three years from the completion date of the building.
- Refund on Construction Costs: Can reclaim VAT paid on the construction of new residential buildings.
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Documents Required
For Registered Businesses
- VAT Invoices: Copies of all VAT invoices for claimed expenses.
- Bank Details: Updated bank account details for refund payment.
- Supporting Documents: Any additional documentation requested by the FTA, such as contracts or agreements.
For Tourists
- Passport: Original passport for identity verification.
- Tax-Free Receipts: Original tax-free receipts from participating retailers.
- Purchased Goods: The actual goods purchased, for inspection if necessary.
For Foreign Businesses
- Original Invoices: Original VAT invoices for claimed expenses.
- Proof of Business Activity: Documentation supporting the business activity conducted in the UAE.
- Bank Details: Bank account details for refund payment.
For Government Entities and Charities
- Registration Certificate: Proof of registration as a government entity or charity recognized by the UAE authorities.
- VAT Invoices: Original VAT invoices for expenses incurred, clearly indicating VAT paid.
- Supporting Documents: Additional documents supporting the nature of expenses and their relevance to official or charitable activities.
- Bank Details: Updated bank account details for the refund payment.
For Exhibitions and Conferences
- Event Participation Proof: Documentation proving participation in the exhibition or conference (e.g., registration confirmation).
- VAT Invoices: Original VAT invoices for expenses related to the event, such as booth rentals, promotional materials, and related services.
- Event Schedule: Schedule or agenda of the exhibition or conference.
- Bank Details: Bank account details for the refund payment.
For New Residential Buildings
- Completion Certificate: Certificate confirming the completion date of the new residential building.
- Proof of Ownership: Document proving ownership of the residential property.
- VAT Invoices: Original VAT invoices related to the construction of the new residential building, clearly indicating VAT paid.
- Bank Details: Bank account details for the refund payment.
Additional Considerations
- Ensure all documents are clear, complete, and in accordance with FTA requirements.
- Maintain copies of all submitted documents for record-keeping purposes.
- Verify specific requirements and procedures with the Federal Tax Authority (FTA) or consult with tax professionals for tailored guidance.
- Documents not in Arabic or English may need to be translated into one of these languages by a certified translator.
Time for VAT Refund
For Registered Businesses
The FTA typically processes VAT refund requests within 20 business days after the submission of the VAT return and refund request.
For Tourists
VAT refunds are processed immediately at the airport, provided all requirements are met.
For Foreign Businesses
The processing time can vary but usually takes around 4-6 months from the date of application submission.
Government Entities and Charities
Typically, VAT refunds for government entities and charities are processed within approximately 20 business days from the submission of the VAT return and refund request.
Exhibitions and Conferences
The processing time for VAT refunds related to exhibitions and conferences can vary but typically takes about 4-6 months from the date of application submission.
New Residential Buildings
VAT refunds for new residential buildings are processed within a timeframe like other VAT refund categories, typically within 20 business days after submission of the refund application.