VAT refund for business visitors in UAE
The UAE Federal Tax Authority (FTA) had made available a convenient VAT refund facility for business visitors in UAE from foreign countries. The authority recently published in April 2021 an updated version of the guide for this VAT refund scheme for business visitors. In this updated VAT guide from FTA, the detailed process of refund application is explained, highlights of which are discussed here.
Who all can use this VAT refund scheme for business visitors in UAE?
FTA has facilitated this special refund scheme for visitors of foreign businesses to claim back the incurred VAT in UAE during their visit under certain circumstances. Applicant for this refund scheme shall satisfy the following conditions:
- Applicants should not have a place of establishment in UAE or any GCC VAT implementing states.
- Applicant should not be a taxable person in UAE
- Applicant should not be carrying on any business in UAE
- Applicant should be carrying on a business in the country in which it has a place of establishment and registered under competent authority
It is specifically mentioned in the VAT guide that this refund scheme cannot be used by any foreign government entity to claim back the VAT expenses incurred in UAE. Also foreign business entities who function as non-resident tour operators are also excluded from this refund scheme.
What are the changes introduced in the recent update by FTA on VAT refund scheme for business visitors in UAE?
Following are the changes which were reflected in the recent update from FTA on this matter:
- Effective date for eligible expenses – Applicants can request for refund of those VAT expenses which are incurred on or after the effective date of agreement between UAE and their country.
- There are few changes in the required documents for the refund application. For example, it is no longer required to submit the certificate of incorporation.
- Scanned tax invoices can be submitted by e-mail instead of original hard copies
- List of countries with Reciprocal Agreements for this refund scheme is now removed from the Appendix of the VAT guide and the same will be published separately in FTA’s website. The list will be updated as and when for changes if any.
Is there a defined due date for submission of VAT refund requests?
The VAT guide specifies that each refund claim shall cover a period of 12 calendar months except for the applicants residing in non-implementing GCC states. The refund applications for each calendar year shall be open on the FTA website from 1 March of the subsequent year and the due date for submission of applications shall be 31 August. For example, with respect to the VAT expenses incurred in 2020, the deadline for submitting the refund requests by eligible applicants is 31 August 2021. Also each refund claim shall have a minimum refund amount of AED 2,000.
What documents are required to be submitted along with VAT refund requests for business visitors?
The documents to be attached along with the refund application include the following:
- Original Tax Compliance Certificate attested by UAE embassy in the country of tax registration of the applicant
- The valid tax invoices and respective proof of payment to support the VAT expenses incurred for which refund request is made
- Copy of passport of the Authorized signatory
- Proof of authority of the Authorized signatory
On review of the application, FTA may ask for additional information on a case to case basis.
What are the steps involved in the submission of VAT refund requests for business visitors in UAE?
To apply for the refund, the eligible applicants have to first create an e-service account in the FTA website and obtain user credentials. Then they have to create a taxable person account in the portal using the online user dashboard, after which application for refund can be accessed as “Business Visitor Refunds” under “VAT” tab. Applicants shall carefully fill the application form and submit the same after review. FTA will review the application and refund, if approved, will be processed within 4 months after submission of application. The status of the refund application will be conveyed through email to the applicants by FTA.
Do you need help in submission for VAT refunds? Contact CDA for immediate assistance.
CDA’s dedicated VAT experts can guide you in completing your VAT submissions on time with required information, in compliance with the rules and regulations as applicable to you. We can serve you as your tax advisors in UAE and notify you about the frequent updates from FTA on various VAT subjects. We bring with us subject matter expertise and right tools to expedite the activities relating to VAT and implement proper VAT governance across your business operations in a controlled manner. We are happy to provide our insights with you on a free one-hour consultation, in which we can discuss and clarify your queries as well.