VAT refunds in UAE

VAT REFUNDS IN RELATION OF CONSTRUCTION OF NEW HOME

In UAE VAT refunds with reference to the construction of a new home refers and only includes the money that has been spent for the purpose of establishing the unit such as the amount which is paid for the building materials and the other materials that have been used by the construction contractors rather than on the things like furniture and appliances.

ESSENTIALS FOR VAT REFUND

• The applicants should be UAE nationals and the monetary cost which is in question should have gone towards financing the construction of a new residence.

• The services of the contractor must be indispensable to the successful completion of the construction project including the builders, engineers, architects and any other similar services. Also the products used must be those that are typically used by the contractors while excluding the furniture and the appliances.

• Also, the building must be used as a residential unit exclusively for the applicant and/or their family and the refund could thus include the money which is spent on establishing the unit such as the amount which is paid as building materials.   

PROCESS FOR REFUND

In order to ensure seamless procedures for the citizens who are looking to recover VAT that has been incurred on the construction of new residence, the authorities has been provided with transparent standards, procedures and mechanism. Only the verification bodies charge for their services but there is no fees in reference to the application. The emiratis are allocated completed homes or land plots by the government.  

There is a four step online procedure for the purpose of submitting the request for VAT refund.

Step 1 : DOWNLOADING THE FORM

The VAT refund form is to be downloaded from the FTA website that is to be filled out, printed and signed.

Step 2 : SUBMISSION OF THE DOCUMENTS

Once the form has been completed, the form as well as the supporting documents such as Emirates ID, ownership paperwork if any are to be submitted in PDF format to homebuilders@tax.gov.ae within 6 months of the completion of the construction work.

Step 3 : RECEIVING OF A CONFIRMATION E MAIL FROM FTA

The FTA would send an E Mail to the applicant confirming that it has received the documents. Within 5 work days, another e-mail would be sent confirming as to whether the applicant is eligible for a refund or not. Those who have been declared eligible to recover for VAT would have to provide a reference number that is issued by the FTA.  

Step 4 : SUBMISSIONS TO VERIFICATION BODY ACCREDITED BY THE FTA

The eligible applicant are lastly required to submit the request including the reference number, blueprints and the invoices to a verification body that is accredited by the FTA. Those verified bodies that would be listed on the FTA website would send a report stating the amount of taxes versus the recoverable amount too that would be sent to the FTA within 15 working days. .

VAT REFUNDS FOR EXHIBITION AND CONFERENCES

The UAE Cabinet has further passed a resolution to refund 5% VAT for the institutions working in the exhibitions and conferences sector in order to guarantee the ease of doing business and competitiveness in the sector.

AIMS FOR PASSING THE RESOLUTION

• At the same time it also supports an efficient implementation of the tax system as per the best integrational practices.

• This resolution also aims to support the UAE’s MICE sector and for the purpose of maintaining the country’s global lead in this field. This is in the light of the facilities that are offered to develop the sector and the keenness to provide a conducive environment, infrastructure and a legislative framework for doing business and for attracting world’s leading organising companies.

 

BENEFITS OF REFUND

It would lead to enhancement of the competitiveness of the industry and would also increase the capacity to attract niche global events, exhibitions and conferences.

Further, it would trim the costs that have been incurred by the organisers and the international associations while enabling the local associations to submit more bids for hosting major international conferences and congresses and enhancing the support of partnerships with the public and private sectors.

 APPLICABILITY FOR VAT REFUND

In order to be eligible for VAT Refunds :

• The exhibition or any meeting that has occurred between the people sharing the same interest  that has been authorised by the competent local authority should have been held for seven days or less . Provided that the service recipient has no established base or a permanent facility in the UAE.  

• The service recipient should not have been registered or obliged to be registered in the UAE.

• He should not have paid any tax to the supplier.

TYPES OF REFUNDS

The refunds under exhibition and conference is of two types :

• firstly it is the grant of the right to access, attend or participate in a conference
• Secondly, it is the grant of the right to occupy space for the purpose of conducting a conference or an exhibition.

CONDITIONS TO BE MET FOR REFUNDS

• In order to recover for VAT on the services that has been provided for exhibitions and conferences, there are 6 conditions that should be met :
• The supplier must request the refund on their tax return for the same tax period where the services were supplied
• The amount that has been claimed must be equal to or less than the tax that has been imposed on the supply of services for exhibitions and conferences
• The recipient of services must neither have a permanent or a fixed establishment in the UAE
• The recipient must not be registered or required to register for tax in the UAE
• The recipient must not have paid tax to the supplier
• The supplier must receive a written confirmation from the recipient corroborating the three previous conditions

HOW CAN VAT BE REDEEMED ?

VAT redemption can only be made when the service recipient does not have any permanent establishment of facility in the country and is not registered or is required to be registered in the UAE nad has also not paid any tax to the supplier.