VAT REFUND PROCEDURES FOR UAE NATIONALS BUILDING NEW RESIDENCES
VAT reclaiming procedures for the UAE nationals who have been building new residences have been simplified by electronic procedures as per an announcement of the FTA. The Authority has made an announcement since it intends to introduce tax legislation which reflects the government’s concern for well being of the citizens.
HOW HAS THE FTA ENSURED HOUSING STABILITY FOR ALL SEGMENTS OF SOCIETY
The UAE legislators in order to decrease the burden on the UAE’s citizens and residents have made provisions to subject supply of commercial real estate at the basic rate of 5% except during the first three years o construction when the rate of the VAT is 0%.
CONDITIONS TO BE FOLLOWED FOR REFUND PROCEDURE ON FTA WEBSITE
In order to apply for the refund procedures, the following conditions must be satisfied :
- The applicant must be an Emirati national
- The monetary cost must be used for financing the construction of a new home which is to be used as a residential unit for the applicant and/or their family
- VAT refund should include the money which is spent on constructing the unit as the amount which is paid for building materials.
TIME LIMIT WITHIN WHICH REQUEST IS TO BE SUBMITTED
The request for refund should be submitted within 6 months of the date of completion of construction that precedes the date of occupancy of the building. There is a second option which is that the request must be submitted within 6 months of the date of issuance of a certificate of completion for the building by competent authorities.
STEPS TO CARRY OUT THE REFUND PROCEDURE
Step 1: Download the VAT refund form available on the FTA website.
Step 2: Form must be completed, printed out and signed.
Step 3: Scan the completed signed form along with supporting documents ( copy of the applicant’s passport and Emirates ID, paperwork proving his/her ownership of the land in question such as utility bills, the document mentioning the date of completion). Submit the form in a PDF format to firstname.lastname@example.org within 6 months of the completion of construction work.
Step 4: The request including the reference number, blueprints and invoices is to be submitted to the FTA or to the verification bodies accredited by the authority. The request is to be received by the FTA within 15 days from the date of issuing these invoices.
Step 5: An email is to be sent to the authority confirming whether the authority has received the documents. An email is to be sent within 5 days by the applicant to inform whether it is entitled to refund or not. The applicant who is eligible to recover their taxes are required to provide the reference number issued by the FTA
CONDITIONS FOR TAX RECOVERY
The basic conditions that are to be fulfilled for recovery of tax are :
- Expenses should relate to a newly built building that is used as a residence by the applicant an/or his family.
- For the successful completion of the construction process, the claims should be on the payment made on contractor services. This also includes the services provided by builders, architects, engineers and similar services that are limited to those provided by construction contractors in residential buildings or residential construction sites. The furniture and electrical appliance should not be included.
The FTA is committed to develop a modern housing system and to deliver the best standards of life and well being within the framework of care provided by the state.