VAT Refund for Business Visitors in UAE

How to claim vat refund for business visitors in uae

6 Steps Procedure to Refund VAT for Business Visitors in UAE

The UAE government has published a VAT refund scheme which enables businesses/ business visitors to claim VAT paid on the purchase of goods and services incurred in UAE.

A non-government foreign business may obtain a refund on VAT paid in UAE by submitting the refund request for business visitors as prescribed by the Federal Tax Authority.

On What Terms can a Business Visitor in UAE claim Input Tax?

A foreign business visitor can claim for input tax based on the fulfillment of the below-mentioned requisites:

  1. Input tax recovery is not permitted for VAT paid on non-recoverable input tax such as, entertainment services, motor vehicles which are available for personal use, etc.
  2. The applicant is not eligible to claim VAT incurred in connection with undertaking activities as a tour operator (Non-resident tour operator).
  3. The foreign business cannot claim a refund if the business makes a taxable supply in UAE. (Other than the treatment of RCM).
  4. The foreign business is from a country in similar circumstances that provide tax refunds to UAE entities. (The approved countries with reciprocal arrangement with UAE Ministry of Finance (MOF) is mentioned at the end).
  5. The business should not have a fixed establishment and not carrying any business in UAE and is not a taxable person in the UAE.
  6. They are carrying on the business and are registered as an establishment with a competent authority in the jurisdiction in which country they are established.

Basic understanding

Refund request period 12 Calendar months
Due date for Refund request for 1/1/2018-31/12/2018 request should be made from 1st April 2019 to 30th September 2019 (6months)
Due date for Refund request in subsequent calendar years request should be made from 1st March-31st August 2019 (6months)
Amount of refund Minimum claim should be 2000 AED
Business visitor Should be from an approved list of countries with reciprocal arrangements mentioned below.

6 Steps Procedure to Refund VAT for Business Visitors in UAE

  1. Sign Up with FTA portal-eservices.tax.gov.ae
  2. Add company details in the registered mail id portal.
  3. Submit the refund form
  4. All documents required for refund as discussed above should be sent to The Federal Tax Authority the document should reach within one month from refund request submission.
  5. Refund form will be processed within 4 months by the FTA
  6. Once request is approved, refund is expected to issue within 10 working days.

What are the documents required to submit for a Refund of Business Visitors in the UAE?

Below mentioned are the details required for submission of a refund request –

  • Proof of incorporation in the respective country of establishment.
  • Tax registration certificate of the respective country (if any).
  • Bank Account details
  • Copy of passport of the authorized signatory.
  • Proof of authority of the authorized signatory.
  • Original Tax invoices with proof of payment.

The Tax Invoice required for refund application is the original Tax Invoices, no simplified Tax Invoices are eligible to claim input tax.

What are the mandatory requirements in the Tax Invoice?

Following are the mandatory requirements in the Tax Invoice

Invoice number: Unique number for identification of each separate Tax Invoice;

Invoice date: Date of issuing the Tax Invoice;

Invoice item: Description of the supply;

Supplier’s name: Registered name of the supplier;

TRN: Tax registration number with the Federal Tax Authority;

What are the important guidelines issued from the Federal Tax Authority to submit the refund request for Business Visitors in UAE?

The below mentioned guidelines issued by the authority with regard to refund request submission are as mentioned below:

  • All the documents are preferred to be in original hardcopy with proof of payment. No softcopies are entertained, which will lead to rejection of refund request.
  • As already discussed, the hardcopies of invoices and other documents shall be sent to the Federal Tax Authority within one month of submission of the refund request along with the printed request form with the refund submitted reference number and a sufficiently pre-paid envelop having the name and details so as to return the documents after verification.
  • The courier should be sent to-
    The Federal Tax Authority
    P.O. Box 2440
    Dubai
    United Arab Emirates.

In the case of a company that has multiple number of branches, the Refund is only available to the branch(es) which is / are established in a country with a reciprocal arrangement in place. Refunds will only be paid to a bank account in the eligible country and the bank account must be in the name of the applicant / Foreign Business.

Below mentioned are the list of countries approved for the VAT refunds for Business Visitors with reciprocal agreement as at September 2019.

Following are the fully applicable country lists-

Austria
Bahrain
Belgium
Denmark
Finland
France
Germany
Iceland
Isle of Man
Kuwait
Luxembourg
Netherlands
New Zealand
Norway
Oman
Qatar
Saudi Arabia
Sweden
Switzerland
The United Kingdom
Zimbabwe

Below mentioned countries have certain exceptions to the full applicability of the refund scheme discussed above.

They are –

Lebanon – Applicability of refund scheme in certain circumstances, which will be issued later.
Namibia – As per the latest released notification, it is understood that the refunds are only available for business goods that are exported and not for services consumed in the UAE.
South Africa – The refunds are only available for expenses relating to goods that are exported from a designated UAE port within 90 days and does not apply to services.

If  the visitor is from a  country  not in the above list, or does not have a VAT system, it is required by the visitor to contact the Ministry of Finance of the respective country, which would have to contact the UAE Ministry of Finance for inclusion in the approved list.

Looking for VAT Services in UAE?

Emirates Chartered Accountants Group provides VAT Services in all the Emirates of UAE & Bahrain. The Tax Department has practical experience of implementing VAT in UAE for more than 1000 businesses across UAE in different industries of the region.

Our Tax Services

For Tax Services in Dubai:
Mr. Pradeep Sai
sai@emiratesca.com
+971 – 556530001
For Tax Services in Abu Dhabi:
Mr. Navaneeth
nav@emiratesca.com
+971 – 558892750
For Tax Services in Northern Emirate (Sharjah, Ajman, RAK, Fujairah)
Mr. Praveen
praveen@emiratesca.com
+971 – 508873115

 

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