VAT is the consumption tax paid when buying any product or service. It was in the UAE in the year 2018. Since then, it has been tough for the business owners to understand the scenarios in which they can claim a refund. The VAT expenses are eligible for refund in the UAE under certain circumstances, and this article will help you understand these situations. VAT Registration UAE has an experienced team of UAE tax consultants with expertise in UAE VAT laws. You can contact them whenever there is any requirement for any clarification.
Qualifying individuals and businesses may receive a refund of the VAT they paid on purchases purchased in the UAE even if they are not considered taxable residents of that country. Some VAT return programs may benefit foreign tourists to the UAE and foreign businesses. In addition, certain programs target particular populations, such as UAE citizens and international governments and organizations.
So, what are the VAT refund schemes available in the UAE
There are several situations in which you can request a VAT refund. You can be a taxable person in a position where your net tax refund is due or someone who qualifies for refunds under the special programs. Please refer to the complete explanations of the prerequisites and conditions for VAT refunds below:
- VAT refunds for taxpaying individuals.
- VAT refunds for international companies.
- Refund of VAT for visitors.
- UAE nationals developing new homes receive a VAT refund.
- VAT refunds for diplomatic bodies, international organizations, and foreign governments.
The above-mentioned special cases must abide to certain terms and conditions before they qualify for VAT refund in the UAE. Let us understand the terms and conditions applicable to the cases mentioned above in detail to have a clear understanding of each one of them.
- VAT refund for taxpaying individuals: Taxable individuals or businesses in the UAE can claim a VAT refund if their input tax exceeds the output tax. It means that they are in a credit position in terms of VAT. Therefore, taxpaying businesses must calculate their tax credits correctly and compute their accounts precisely to save on excess VAT paid. VAT consultants in the UAE can help you in keeping your tax records up to date and also ensuring that tax invoices are being issued as per the guidelines by the Federal Tax Authority. This helps in easy calculation of the net input and output taxes paid by your business.
- New places of residence constructed by the UAE nationals: This program covers UAE nationals who own or purchase land and construct residences. These people may submit a special FTA refund request for the VAT they paid on specific building-related expenditures. According to the FTA’s regulations, the VAT return system for dwellings is only open to UAE citizens who are natural persons. In the case of expats, it does not apply. Therefore, the VAT Refund Scheme for New Residences Constructed by UAE Nationals is not open to corporate entities. According to the plan, a residence is any structure (including townhouses and villas) used as a private residence by a natural person. The house may also have accessories, such as sleeping quarters and kitchen and bathroom fixtures, that are its property and are utilized in conjunction with it.
- Refund of VAT international business clients- Foreign businesses may receive a reimbursement of the VAT they paid on UAE-related expenses. The VAT reimbursement program for business visits is open to foreign companies from countries that refund VAT to UAE organizations. Tax advisors in Dubai can help business travellers with the VAT return scheme. To be eligible for a VAT refund, foreign companies must fulfill the requirements listed below:
- The foreign entity shouldn't have a fixed location or place of business in the UAE or any other GCC nation that has introduced VAT.
- The applicant must not be subject to UAE taxation.
- There should be no business activity by the foreign entity in the UAE.
- The foreign company must register with a competent body in the country of establishment as an establishment.
- Travelers get a VAT refund- Visitors to the UAE can get their VAT refunds for expenses incurred there. Visitors who do not reside in one of the GCC countries implementing VAT are nevertheless covered by the scheme. Visitors who fit the criteria can request a refund of the VAT they paid on something they purchased in the UAE. The following conditions must be met to qualify for the program:
- Tourists must depart the United Arab Emirates within 90 days of the purchase.
- The visitor cannot be a part of a flight crew or aircraft leaving a state that has imposed VAT.
- VAT refund also happens in case of international organizations, diplomatic missions, and foreign governments- Foreign governments, diplomatic agencies, and international organizations are also included in this program. Such individuals may claim the VAT they paid on purchases in the UAE. The refund procedure can be simplified and simpler by consulting with Dubai tax agents.
However, to be qualified for the program, the following requirements must be satisfied:
- The products and services should be used for business purposes only.
- The organization's country or government should have put in place a comparable tax refund program and must exempt comparable UAE entities from any tax.
If you are still trying to determine if you can claim a VAT refund for your spending inside the UAE, please contact the tax consultants in the UAE. They will understand your scenario and help you claim a refund if the refund is possible.
How VAT registration UAE can help you in claiming VAT refund in special cases in the UAE?
Tax consultants in the UAE available at VAT registration UAE can help you claim your VAT refund if you fall in any of the above-mentioned special cases. Therefore, call us today, and we will gladly help you claim your VAT refund if you are eligible. Apart from this, you can also consult us for all kinds of VAT filing and registration-related matters.