The United Arab Emirates (UAE) introduced the Value Added Tax (VAT) in 2018 and this law provides that any foreign business that incurred certain expenditures shall be eligible VAT refund. This article explains how to claim VAT refund in UAE, and also shares an essential guide that helps ensure that your refund claim process is successful. Availing the expert services of top Tax Consultant in Dubai assists businesses to seamlessly navigating the VAT refund process.
VAT Refund Eligibility in UAE
To be eligible for VAT refunds in the UAE, a non-UAE resident business must meet the following criteria:
- Must not be registered for VAT in the UAE
- Must not carry out any form of business activity in the UAE
- Must be registered as an establishment with the competent authority in their home jurisdiction
- Incurred input tax that is above AED 2000
- Input tax must not be of a type that is considered irrecoverable like entertainment expenses
Businesses established in certain countries have additional requirements to qualify for refunds:
- Lebanon: Only eligible in certain circumstances
- Namibia: Refund only for exported goods, not services consumed in UAE
- South Africa: Refund only for exported goods within 90 days of leaving UAE port
Table 1: Countries Eligible for VAT Refunds in the UAE
| Country | Eligibility |
|---|---|
| Austria | Yes |
| Bahrain | Yes |
| Belgium | Yes |
| Denmark | Yes |
| Finland | Yes |
| France | Yes |
| Germany | Yes |
| Iceland | Yes |
| Isle of Man | Yes |
| Korea | Yes |
| Kuwait | Yes |
| Lebanon | Conditional |
| Luxembourg | Yes |
| Namibia | Conditional |
| Netherlands | Yes |
| New Zealand | Yes |
| Norway | Yes |
| Oman | Yes |
| Qatar | Yes |
| Saudi Arabia | Yes |
| South Africa | Conditional |
| Sweden | Yes |
| Switzerland | Yes |
| United Kingdom (UK) | Yes |
| Zimbabwe | Yes |
Required Documents
- A document certifying tax residency (e.g., business status certificate, the certificate of commercial activities, or any equivalent) issued by the competent tax authority of the candidate’s state of registration. It can only be in Arabic or English and it has to represent the applicant’s tax registration number (TRN). Also needs to be attested by the UAE Embassy in the country of tax registration.
- Relevant tax invoices with valid Tax Registration Number (TRN) of the supplier.
- An acknowledgement of the tax invoices in the form of a receipt affixed to the invoice or a rubber stamp on the tax invoice attesting that the amount is paid together with the supplier’s details.
- Copy of the passport of the head of the organization or any other person who will be applying for it.
- Proof of authorization for the signatory (e. g. power of attorney).
Required Form
- A self-declaration in Arabic or English indicating the percentage of input tax recovery eligibility in case the foreign business undertakes exempt or non-business activities in its home country which don't allow full input tax recovery.
- The original tax compliance certificate and invoices need to be submitted along with the completed online refund form. Scanned copies can also be emailed to the FTA within size limits.
UAE VAT Refund Process
Here are the key steps in the refund form submission process as per the document:
- On the FTA portal, go to the sign-up tab then create an e-Services account by registering and confirming an email.
- The first legal step is to register as a taxable person on the e-Services dashboard.
- You can locate the refund form under the “VAT” sub-tab “Business Visitor Refunds”.
- Fill in all the compulsorily required fields of the form which include details of the applicant, and the amount claimed for refund. It is recommended that all associated documents are appended to the particular document under consideration.
- It is suggested to press ‘Save as draft’ from time to time in order to save the progress.
- Make sure that all entered information is reviewed before submission.
- To submit, use the “Submit” button located at the bottom of the screen. When the above details are entered or edited, the status will change to “Pending”.
- An auto-reply acknowledging receipt of the application with a reference number will be sent by email.
- The original documents have to be posted to the FTA address within one month accompanied by the printed form.
- The FTA will consider the application for accreditation within 4 months and inform about the decision by e-mail.
- Where Resubmission requests arise, update the requested information and resubmit through the dashboard.
The applications can be filed from 1st March of the current year till 31st August for the expenses incurred in the previous calendar year.
FAQs
Q1. Who can claim for a refund?
Qualifying non-UAE resident businesses can apply for a refund of VAT paid on certain expenses incurred in the UAE during the 2021 calendar year when totaling more than AED 2,000 under the UAE Foreign Businesses Refund Scheme.
Q2. What is the process for obtaining a VAT refund in the UAE?
To file and process VAT refunds, the Federal Tax Authority (FTA) has developed the EmaraTax online portal. The steps include:
- Set up an Emerita account through the FTA’s website and then activate the account.
- Sign into the Emaratax account. Click on ‘SPECIAL REFUNDS’
- In the current page, you will need to click on ‘Business Visitor Refunds’.
- Complete the refund details section and you are done with your refund request.
Q3. Who is eligible for VAT refunds in the UAE?
Only foreign businesses who meet the following conditions are eligible to apply for a VAT refund:
- They have no place of establishment or fixed establishment in the UAE or an Implementing State.
- They are not a Taxable Person in the UAE.
- They do not engage in business in the UAE.
- They are running a Business and, as such, are legally established with an official charter from a competent authority of the country where they operate.
- To effectively establish business, there is also a need to ensure that the country falls among the UAE VAT refund agreed countries.
Q4. How long does it take to receive a VAT refund in the UAE?
Under the new rules, once a complete VAT refund application is filed it must be processed within 4 months by FTA.
If the refund request is approved then FTA plans to complete the process of refunding within 10 business days at most. However, the actual receipt of funds will vary depending on the amount of time taken by the receiving bank to process the transaction.
Seek the Expert Services of Top Tax Consultants in the UAE
Availing the expert services of top Tax Consultant in Dubai assists businesses in seamlessly navigating the VAT refund process. Thus, contact us now and we shall be glad to assist you.