UAE VAT Refund for Business Visitor/ Foreign Business – For Businesses from outside UAE paying UAE VAT

Overview

UAE Federal Tax Authority (FTA) has introduced Business visitor VAT refund to help foreign businesses / business visitors check if they are eligible to make a claim for refund of VAT paid on the goods purchased or services purchased in/ from UAE. Further FTA provided the guidance on how to apply for such business visitors VAT refund through ‘VAT Refund Scheme for Foreign Businesses’ by submitting the VAT Refund Form.

Who can claim the UAE VAT Refund?

Only foreign businesses who meet the following conditions (hereinafter referred to as “Foreign Business”) are eligible to apply for a Refund:

  • They have no place of establishment or fixed establishment in the UAE or the Implementing State
  • They are not a Taxable Person in the UAE
  • They are not carrying on Business in the UAE

They are carrying on a Business and are registered as an establishment with a competent authority in the jurisdiction in which they are established

Under what circumstances a Foreign Business can avail the ‘VAT Refund Scheme for Foreign Businesses’?
  • The Foreign Business makes supplies in the UAE (unless the recipient is obliged to account for VAT under the reverse charge mechanism)
  • 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
  • The period of each Refund claim shall be for 12 calendar months (except in the case of applicant’s 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
What information is needed to submit a VAT Refund Application Form?
  • Proof of incorporation in your country of establishment (such as certificate of incorporation / registration with the competent authority)
  • Tax Registration certificate with the competent Tax Administration
  • If you are undertaking exempt or non-business activities in your country of establishment, which do not give you the right to fully recover any input tax, you will need to provide a letter, or alternative evidence, from your Tax Administration which would indicate the level of input tax you are eligible to recover on expenses
  • The relevant tax invoices with proof of payment that you are claiming for refund
  • Copy of passport of the Authorized Signatory
  • Proof of Authority of the Authorized Signatory
When should you submit your application to the FTA?
  • 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
  • The FTA will only process refund applications for 6 months from the date businesses can first make a claim (i.e. 6 months from 2nd April 2019 for the 2018 calendar year, 6 months from 1st March 2020 for the 2019 calendar year and respectively for all future years)
  • Please note the calendar year condition (i.e. that the period of the claim shall be one calendar year) does not apply in the case of Businesses / applicants which are resident in any GCC State that is not considered to be an Implementing State according to the tax legislation.
What are the documents to be submitted with FTA after submitting the application form?
  • Original hard copies of invoices & receipt or bank transfer copy or paid stamp on invoice with supplier details
  • Certificate of establishment / incorporation and your Tax Registration Certificate (original or attested hard copies)
  • Copy of form which online submitted
  • And one prepaid envelope courier company of your choice, with the name of the applicant in order for the FTA to return your documents.
  • Address: Federal Tax Authority
    P.O. Box 2440,
    Dubai
How much time does it take to get the refund after submitting the VAT refund application form?

Once all the information is received in hard copy, the Refund Form will be processed within 4 months of submission. You 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 business days. The Refund will be paid in United Arab Emirates dirhams (AED).

Which all countries are eligible for the VAT Refunds for Business Visitors with reciprocal agreements?

Based on the circular issued by FTA in September 2019, following is the list of approved countries eligible for VAT refund for Business Visitors. In other words, if your company is located in one of the following countries, your company is eligible to apply for UAE VAT refund by fulfilling the other rules mentioned in the circular.

  • Austria
  • Bahrain
  • Belgium
  • Denmark
  • Finland
  • France
  • Germany
  • Kuwait
  • Iceland
  • Isle of Man
  • Lebanon – in certain circumstances
  • Luxembourg
  • Namibia – please note that refunds are only available for business goods that are exported and not for services consumed in the UAE.
  • Netherlands
  • New Zealand
  • Norway
  • Oman
  • Qatar
  • Saudi Arabia
  • South Africa – please note that 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.
  • Sweden
  • Switzerland
  • UK
  • Zimbabwe

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.

Spectrum Auditing is an Approved Tax Agent from FTA to handle all the requests relating VAT in UAE. Spectrum Auditing team is well equipped to advise and take care of your requirements of Value Added Tax in UAE on your behalf. If you need any assistance on applying for VAT refund or require further information on it, reach out to us on +971 4 2699329 / +971 50 9866466 or email us at info@spectrumaccounts.com to know more.

 

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