BUSINESS VAT REFUND SCHEME
The Federal Tax Authority has designed a scheme for foreign business visitors to claim a refund of VAT paid on the expenses incurred in the UAE.
WHAT IS THE BUSINESS VAT REFUND SCHEME?
Under the scheme, Foreign businesses are allowed to claim for a refund of VAT on the expenses incurred in UAE.
Before understanding the VAT business refund scheme, let us first understand the term foreign business.
WHAT IS A FOREIGN BUSINESS?
Foreign business refers to a business which is registered with a competent authority in the jurisdiction where it is established.
WHO CAN CLAIM REFUND UNDER THE SCHEME?
A foreign business that carries on a business and meets the following conditions are eligible for a refund :
THE BUSINESS SHOULD NOT HAVE A PLACE OF ESTABLISHMENT OR A FIXED ESTABLISHMENT EITHER IN THE UAE OR THE IMPLEMENTING STATE - The foreign business should not have a place of establishment or fixed establishment in UAE or a State which has implemented VAT
THEY ARE NOT A TAXABLE PERSON IN THE UAE- The business claiming VAT refund under the scheme should not be a person who has either registered under the UAE VAT or who is obligated to register under UAE VAT.
THE BUSINESS IS REGISTERED AS AN ESTABLISHMENT WITH A COMPETENT AUTHORITY IN THE JURISDICTION IN WHICH THEY ARE ESTABLISHED -The foreign business should be registered with a relevant authority in the jurisdiction as an establishment
THE BUSINESS SHOULD BE FROM A COUNTRY HAVING VAT AND WHICH PROVIDES FOR VAT REFUND TO UAE ENTITIES IN SIMILAR CIRCUMSTANCES - Foreign business should be registered in a country which provides a VAT refund to similar entities under similar circumstances.
CASES IN WHICH REFUND IS NOT AVAILABLE
Refund is not available in the following cases :
- In case supplies are made by the Foreign Business in the UAE ( unless the recipient is under an obligation to account for VAT under the reverse charge mechanism )
- In case the input tax with respect to any goods or services is subject to a statutory block and is not recoverable by a taxable person in the UAE
- In case the foreign business is a non-resident tour operator
WHAT IS THE PERIOD OF REFUND?
The calendar year is period of each refund claim. The refund applications can be made from 1st April 2019 for claiming the refunds in respect of the 2018 calendar year. The opening date for refund applications in subsequent calendar years (1st January 2019-31st December 2019 ) would be 1st March. The applications would be accepted from 1st March 2020.
WHAT IS THE MINIMUM AMOUNT OF REFUND THAT CAN BE CLAIMED?
The minimum claim amount of each VAT claim is AED 2,000 and this comprises of single as well as multiple purchases.
WHAT ARE THE STEPS TO COMPLETE THE CLAIM?
In order to complete the claim, the following steps should be followed :
- Download the Form from the section designated on the FTA website
- Complete the Form - The form should be filled field by field. Before printing out for signature and/or official stamp, the PDF form should be filled out first
- The form should be submitted along with the supporting documents
- The soft copy is to be mailed to foreignbusiness@tax.gov.ae . The size of the file should be 5 MB and can be accepted in PDF, JPG, PNG and JPEG form.
- After successful submission of the refund form, the user receives an immediate email notification.
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