VAT refund takes place when a business has paid more value-added tax in the course of purchasing goods as well as services than the value-added tax it has collected from its customers during a certain period of time. This excess input VAT can be recovered through the Federal Tax Authority mechanism of the VAT refund. VAT refund is an important factor to enhance businesses by maintaining their resources and minimizing taxation by helping further the development and stability of the economy in the United Arab Emirates.
The refund process for VAT entails the filing of a claim with the FTA, in which the business also submits voluminous paperwork to back their application. The FTA assesses the claim to establish its conformity to the stipulated requirements. When approved, the refund amount is debited back to the account of the business permitting the business additional working capital.
Several persons are entitled for UAE VAT refunds, including:
The FTA usually processing applications for refunds of VAT takes not more than 20 business days. However, if an application is complex or if there are some incomplete pieces of information necessary for the evaluation of the application, processing may take longer. To minimize the chances of delay or rejection it becomes important to keep the documentation accurate and as detailed as possible. Upon this, the FTA sends the applicant an email to update him/her on the progress of the application or its outcome.
Documentation is highly recommended in the VAT refunding exercise. Businesses must therefore make an effort to keep comprehensive records of all activities relating to VAT such as invoices and receipts. This practice not only occurs to make the refund process easier but also beneficial under audits as well.
Hiring a VAT refund services professional is an advantageous step, especially for businesses that have to deal with overseas counterparts or when the companies are not sure about how to handle VAT as its complicity may result in massive challenges when filing, or even lead to penalties or bad cash flows. Tax Consultants UAE are VAT experts who guide clients through the refund process. Planning and compliance adjustments according to FTA rules and regulations are being done while the maximum possible refund would also be achieved.
Peace of Mind: The complexity involved in taxes is well managed by experts hence relieving businesses the headache of having to deal with taxes.