UAE Averaging 8,000 VAT Refunds Every Day
500 days after its inception, Director General of the Federal Tax Authority discusses the uptake of VAT legislation to the United Arab Emirates.
It has been announced that the Federal Tax Authority (FTA) in the United Arab Emirates has been processing over 8,100 refunds every day on value added-tax (VAT) paid on goods and services bought in the region.
In a global context, VAT is brand new to the UAE and Saudi Arabia, having only introduced VAT schemes for the first time in January 2018 in attempts to diversify revenue streams away from oil, gas and other hydrocarbons. The regional VAT scheme has evolved over the months since the introduction, and as explored here, the FTA announced tax refunds for tourists purchasing goods or services during their visit, this has seen the greatest impact for airports and retail stores across the GCC countries.
The FTA's Director General, Khalid Ali Al Bustani, confirmed the soaring number of refund claims made has reached over 8,000 per day. He affirmed that as part of the authority's efforts to manage federal taxes, various refund schemes such as these were launched and this uptake is a positive sign to acceptance of VAT legislation.
Al Bustani also highlighted the success of the VAT Recovery on the 'Building of New Residences by UAE Nationals' program, adding that the FTA had received more than 800 applications with just under half being approved already, totalling a recovery amount of AED 14.74 million ($4 million) in taxes incurred on the construction of their homes.