Federal Tax Authority Issues Guide On Foreign Business Refunds
Fahad Shabbir (@FahadShabbir) Published January 20, 2019 | 01:00 AM
ABU DHABI, (UrduPoint / Pakistan Point News / WAM - 20th Jan, 2019) The Federal Tax Authority (FTA) has outlined four conditions that would allow foreign businesses to recover Value Added Tax (VAT) incurred in the UAE in a new guide on "VAT Refunds for Business Visitors", published on its official website.
To be eligible for the VAT refund, the first condition is that foreign businesses must not have a place of establishment or fixed establishment in the UAE or in any of the VAT-Implementing GCC States that fully comply with the provisions of the Common VAT Agreement of the Cooperation Council for the Arab States of the Gulf.
Second, such foreign businesses must not be a Taxable Person in the UAE. Third, they must also be registered as an establishment with a competent authority in the jurisdiction in which they are established; and finally, the fourth condition is that they must be from a country that implements VAT and that equally provides VAT refunds to UAE businesses in similar circumstances.
FTA Director-General Khalid Ali Al Bustani described the refund procedure as clear and transparent, noting that it supporting economic activities in the areas in which the visiting business of the country participates, which is reflected positively on many sectors including tourism, trade, exhibitions, conferences, etc. He stated that the mechanism is in accordance with the Federal Decree-Law No. 8 of 2017 on Value Added Tax and the terms and conditions set in its Executive Regulations, which call for refunding taxes paid on supplies or imports made by a foreign entity not residing in the UAE or any of the Implementing States, subject to meeting certain conditions.
He further explained that reciprocity is a key condition for the procedure, whereby the Authority will refund the VAT to businesses resident in countries that refund VAT for UAE businesses visiting their territories.
The Federal Tax Authority clarified that the period of each refund claim shall be a Calendar year, noting that for claims in respect of the 2018 calendar year, refund applications can be made as of April 1, 2019. However, for subsequent calendar years, the opening date for accepting refund applications will be March 1st of the following year; this means that for the period from January 1 to December 31, 2019, applications will be accepted as of March 1, 2020.
The FTA went on to stress that the minimum claim amount of each VAT refund application submitted by business visitors is AED2,000, which may consist of a single purchase or multiple purchases. The Authority urged potential applicants to hold on to the original tax invoices on the purchases for which they would like to reclaim VAT, as they will be required to be submitted along with the refund applications.
Businesses residing in any GCC State that is not considered to be an Implementing State may still submit a VAT refund application to reclaim VAT incurred in the UAE under this scheme, the FTA assured, outlining only 3 situations where VAT cannot be reclaimed: The first situation is if the Foreign Business in question makes supplies in the UAE, unless the recipient is obliged to account for VAT under the Reverse Charge Mechanism. Secondly, a VAT refund cannot be processed if the Input Tax in respect of any goods or services is "blocked" from recovery and, therefore, not recoverable by a Taxable Person in the UAE. The third and final situation where a refund is not possible is if the Foreign Business is a non-resident tour operator.
The guide on "VAT Refunds for Business Visitors" can be accessed on the FTA’s official website via the link: https://www.tax.gov.ae/pdf/VAT%20Refund%20User%20Guide-Business%20Visitors_EN.pdf
Related Topics
Recent Stories
UHS to issue MBBS degrees within three months after final result
Aiman Khan granted UAE Golden Visa
PSX achieves significant milestone, surpasses 72,000 mark
Pak Vs NZ T20I: Orphaned children extended special invitation to watch match
Finance Minister lauds UNDP’s unwavering support during floods
President Raisi leaves for Iran from Karachi
Currency Rate In Pakistan - Dollar, Euro, Pound, Riyal Rates On 24 April 2024
Today Gold Rate in Pakistan 24 April 2024
Punjab CM inaugurates Pakistan’s first Virtual Women Police Station
Dutch model Donny Roelvink embraces Islam
Experts raise concerns over introduction of 10-stick packs
Iranian president arrives in Karachi
More Stories From Middle East
-
UAE announces ‘Zero Bureaucracy Program’ to reduce bureaucracy
3 months ago -
COP28 President-Designate welcomes Transitional Committee agreement to operationalise Loss and Damag ..
6 months ago -
Global Media Congress 2023 to feature Co-Production Majlis as a new networking platform
6 months ago -
Young female athletes shine at Abu Dhabi World Youth Jiu-Jitsu Championship
6 months ago -
King of Jordan receives Abdullah bin Zayed and ministers participating in Arab coordination meeting
6 months ago -
Abdullah bin Zayed participates in coordination meeting of Arab foreign ministers, joint meeting wit ..
6 months ago
-
3rd annual conference of Emirates Society of Clinical Microbiology kicks off in Dubai
6 months ago -
SIBF 2023 hosts Nobel laureate to discuss emergence of ‘Afrofuturism’ in global discourse
6 months ago -
ALC announces winners of Kanz Al Jeel Award 2023
6 months ago -
SIBF turns spotlight on remarkable contributions of women
6 months ago -
Global assets in spot bitcoin ETFs hit $4.16 billion
6 months ago -
Rescuers struggle to find Nepal quake survivors as deaths reach 157
6 months ago