Impact of UAE VAT and Tax Refund Scheme on Official participants of Expo 2020
Expo 2020 hosting vibes have been waving around all across Dubai for a long time now. The region is getting prepared for this most awaited event that is coming up with much eagerness. When the participating countries are actively busy putting up their exhibition spaces, it is extremely important to be aware of the impacts of UAE VAT laws on their activities in UAE.
The international business exhibition is going to be hosted in Dubai. In this connection, a lot of questions that might arise in the mind of official participants of the 2020 Expo. As per the Cabinet Decision No. 1 of 2019 issued by the UAE Government, the official participants of the Expo 2020 are eligible to claim a refund of VAT incurred by them on the import or supply of specific goods and services. Let us have a detailed discussion on the impacts of UAE VAT on official participants of Expo 2020 and tax refund scheme on official participants of EXPO 2020.
How UAE VAT will Impact Expo Official participants
As per the UAE VAT rules, the official Participants of Expo 2020 will be liable to UAE VAT stipulations as they will be regarded as mainland business. Also, they will be incurring VAT on Services and Goods related to the Expo 2020. Unless registered for VAT in UAE, the official participants of the Expo are not allowed for the refund of the VAT refund as per the general UAE tax rules. However, the official participants of the Expo are eligible for some tax relaxations as per the cabinet 1 of 2019 in certain situations to recover VAT on certain Goods and Services which were imported or acquired.
Which all VAT is refundable to official participants of Expo 2020?
The expenses of EXPO 2020 Dubai that are eligible for VAT refund are categorized below:
- Costs incurred for the construction of and for any subsequent changes to the exhibition space
- Costs of running the exhibition space or any expenses incurred for any presentations/events conducted in Expo 2020 area
- Costs incurred by the participants for their actual operations and VAT amount exceeds AED 200
- Expenses incurred to participate in Expo 2020
- Personnel expenses of the staff/beneficiaries who are allowed by FTA
For any VAT reclaim relating to expenses under Category A or B as listed above, the participant shall possess a Certificate of Entitlement from the Bureau Expo 2020. To know more about the Certificate of Entitlement and on how to apply for the certificate, you can refer our article: Certificate of Entitlement for Expo 2020 Dubai
Is UAE VAT applicable on imports made by the Official Participants of Expo 2020?
VAT impact on imports will depend upon the category of expenses for which they are incurring. For the imports relating to category A and B as listed in the eligible expenses, the participants holding Certificate of Entitlement can use the special Tax Registration Number (TRN) allocated to the Bureau and no VAT will be imposed on such imports. For other imports, VAT will be applicable and the same can be reclaimed later if the import falls under any of the eligible expense categories as defined above.
What are the implications of VAT on resale of imported goods by the Official Participants of Expo 2020?
With respect to the imported goods for which a refund was granted earlier, for any resale to be made, prior approval of the Bureau Expo 2020 and payment of VAT is required. Before such intended sale, the participant shall make the request for approval using ‘Consent of Sale Request Form’ and submit to the Bureau. Once approval is received from the Bureau the participant can sell those goods and then process the payment of VAT. The VAT registered participants can include the sale along with their regular VAT returns to effect the payment to FTA. For the participants who are not VAT registered the tax can be paid to the Bureau.
Is UAE VAT registration required for refund of VAT incurred?
This may differ on a case to case basis. For the purpose of VAT refund on eligible expenses of Expo 2020, UAE VAT registration by Official Participant is not required. The refund claim can be made using a special refund application. However, in case if the taxable supplies in UAE of the official participant exceed or expected to exceed the prescribed mandatory threshold limit which is AED 375,000, then VAT registration is required as per the regulation. Hence it is important to assess the transactions of the participant in UAE to determine the requirement for VAT registration under FTA.
What are all the procedures for refund of VAT incurred by Official Participants of Expo 2020?
Official participants who are UAE VAT registered shall follow the normal VAT return rules to claim the refund of VAT incurred on eligible expenses relating to Expo 2020. They can include the details of these VAT on Expo 2020 expenses along with their regular input tax recovery amounts. For other participants of Expo 2020, who are not registered, a special refund application process has been devised to reclaim the VAT relating to their eligible expenses during Expo 2020. The special application shall contain a list of details and supporting documents as specified by FTA. Once the application is completed, it can be submitted to the Bureau Expo 2020 Dubai. FTA will review the application and will refund the amount accordingly.
How often can reclaim VAT refund be made by Official participants of Expo 2020?
If you are registered under UAE VAT, then refund claim for VAT incurred relating to eligible expenses as discussed above can be made during your regular VAT return. In all other cases, where you are an Official participant of Expo 2020 and not registered under UAE VAT, the VAT refund application can be made as below:
- If the refund amount is AED 10,000 or more, then within 15 days after the end of the calendar month in which the related expenses are incurred.
- If the refund amount is less than AED 10,000, then within 15 days after the end of the calendar quarter in which the related expenses are incurred.
How CDA can assist you in VAT related services with respect to Expo 2020?
CDA has always been proactively involved in offering various financial consulting services in UAE market. We have geared up dedicated teams of experienced and competent consultants who can provide you with expert advice and be there with you for following specific functions:
- To assist in all your documentation works in your journey as an official participant of Expo 2020.
- To assess whether the VAT incurred during setting up of Expo pavilions are eligible for refunds from FTA.
- To guide you on all the procedures to be followed to apply for VAT refund.
- To help you gather all the details and supporting documents to complete various application and refund forms.
If you are a participant of the 2020 Expo and have some queries about the refund of the VAT paid in UAE in connection with the 2020 Expo, get in touch with us, our tax experts will assist you. As a registered VAT consultancy in UAE, our qualified registered tax consultants will help you ensure VAT compliance while participating in the 2020 Expo.