The Federal Tax Authority in the United Arab Emirates has introduced a VAT refund scheme for foreign business visitors travelling to the area. In order to successfully claim a VAT refund, you are required to create an e-services account with the FTA’s new system first.
Below you will find a summary of the requirements and details of this new VAT system:
Which businesses can claim?
Only specific foreign businesses will be eligible for the VAT refund. You have to satisfy the following criteria to apply:
- You must have no fixed establishment in the UAE, or implementing state;
- You are not a taxable person in the UAE;
- You are not carrying on business in the UAE (regular, ongoing activities of a business/person);
- Businesses which are resident in any GCC State that is not considered to be an Implementing State, can also apply for such refunds under this scheme.
Which businesses can’t claim?
- If the Foreign Business makes supplies in the UAE;
- The input tax incurred on the goods or services is non-recoverable by a Taxable Person according to the UAE VAT legislation e.g. entertainment and motor vehicles available for personal use;
- The Foreign Business is from a country that does not in similar circumstances provide VAT Refunds to UAE entities;
- The Foreign Business is a non-resident tour operator.
In the case of a company that has a number of branches worldwide, 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 an eligible country, and the bank account must be in the name of the applicant / Foreign Business.
In what circumstances can you claim a Refund?
To reduce your administrative burden for making a refund claim, it is required that;
- The period of each refund claim shall be 12 calendar months (except in the case of applicants resident in GCC states which are not Implementing States);
- The minimum amount of VAT for which a claim may be submitted under this scheme shall be AED 2,000.
Documents required to make a claim:
- Proof of incorporation in your country of establishment;
- Tax Registration certificate with the competent Tax Administration;
- The relevant tax invoices with proof of payment that you are claiming for refund;
- Copy of passport of the Authorised Signatory;
- Proof of Authority of the Authorised Signatory;
- Original hard copies of all invoices (with proof of payment) must be sent along with your application;
- Original hard copies of your certificate of incorporation/registration and your Tax Registration certificate.
All documents required must be submitted in either Arabic or English. If documents are received in any other language the Refund Application will not be processed.
Once all the information is received in hard copy, the refund Form will be processed within four months of submission. Claimants will receive an email notification from the FTA on the result of your application.Once your claim is approved, the FTA will aim to issue the Refund within 10 working days, and the refund will be paid in United Arab Emirates dirhams (AED).
When should you submit your application to the FTA?
As mentioned above, the period of each refund claim shall be a calendar year (e.g. 1st January 2018 – 31st December 2018). For claims in respect of the 2018 calendar year, refund applications can be made from 2nd April 2019.
The opening date for refund applications in subsequent calendar years will be 1st March (i.e. for the period 1st January 2019 – 31st December 2019, applications will be accepted from 1st March 2020).
The approved list of countries with reciprocal arrangements can be found below. In the event that your country is not on the approved list,or does not have a VAT system, you should contact the Ministry of Finance of your country, which would have to contact the UAE Ministry of Finance for inclusion on the approved list.
- Isle of Man
- Lebanon (in certain circumstances)
- New Zealand
- Saudi Arabia
- South Africa