The Commercial Activities Certificate enables the holder of the certificate to get a refund of advance VAT paid if any. For the parties who are involved in such transactions, the Commercial Activities Certificate will help them to claim the refund of such advance tax paid.
Advantages of tax certificates including Commercial Activities Certificate are mainly applicable to the parties involved in cross border transactions. Such certificates enable the ones who hold them to take advantage of the international tax treaties between the countries like the Double Taxation Avoidance Agreements (DTAA) to prevent the incurrence of repeated tax charges over the same supply. Additionally, the Commercial Activities Certificate helps to gain a refund of the advance of VAT paid in international transactions in a country outside UAE, even if DTAA is not available.
Commercial Activities Certificates allow investors in the UAE, including companies and individuals, to benefit from double taxation avoidance agreements to which the State is a party, to prevent duplication, in addition to recovering VAT imposed on Emirati businesses in various countries in the event they were registered with the Authority.
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