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2022 UAE Business VAT Refund Scheme Is Open

April 12 , 2022 / Haroon Juma / VAT & Tax Blog

Business VAT Refund

From 1 March 2022, the window is open for qualifying non-United Arab Emirates (UAE) established businesses to submit applications under the business VAT refunds scheme.

This window operates from 1st March 2022 ending 31st August 2022 and provides qualifying companies the opportunity to submit their Business VAT refund requests to the Federal Tax Authority (FTA) for the calendar year 2021.

As a result, Non-UAE resident businesses should now assess if they have incurred VAT in the UAE and qualify for a Business VAT refund. The necessary documentation and evidence required under the Business VAT refund application are stringent. As a result, advanced preparation and early action is recommended.

Requirements

There is evidence the FTA is currently revisiting prior years’ refund claims and, in some cases, further information is being requested on previously stalled claims. Any request should have been sent to the authorized contact at the time of the original claim

Who Can Take Advantage From The Business VAT Refund Scheme?

Only qualifying non-UAE resident businesses can apply through the scheme for a refund of VAT paid. These claims should be made on eligible expenses totaling over AED2,000 incurred in the UAE during the calendar year 2021.

To make a claim, an eligible non-UAE resident business should:

  • Not have a VAT registration in the UAE;
  • Not carry on business in the UAE;
  • Carry on a business; and be registered as an establishment with a competent authority in the jurisdiction in which they are established.

A refund is not available where:

  • The business makes supplies in the UAE (unless the recipient is obligated to account for the VAT due);
  • The input tax incurred is of a type that is irrecoverable by VAT registrants in the UAE (e.g. entertainment expenditure);
  • The business is not from one of the eligible countries listed by the FTA; or
  • The business is a non-resident tour operator.

Eligible countries

The April 2021 guidance published by the FTA states that the claims made by businesses established in the following countries will be eligible:

  • Austria
  • Bahrain
  • Belgium
  • Denmark
  • Finland
  • France
  • Germany
  • Iceland
  • Isle of Man
  • Korea
  • Kuwait
  • Lebanon – in certain circumstances.
  • Luxembourg
  • Namibia – (Refunds are only available for exported business goods and not for services consumed in the UAE)
  • Netherlands
  • New Zealand
  • Norway
  • Oman
  • Qatar
  • Saudi Arabia
  • South Africa – (Refunds are only available for expenses relating to exported goods from a designated UAE port within 90 days and do not apply to services)
  • Sweden
  • Switzerland
  • United Kingdom (UK)
  • Zimbabwe

Evidence and Documentation

The key requirement of any claim is the original hard copy documentation, including the attestation of documentation if required submitted along with the application.

This includes documentations such as:

  • Original tax compliance certificate;
  • Original tax invoices;
  • Duly stamped proof of payment for all tax invoices claimed;
  • Proof of authority of authorized signatory; or
  • Passport copy of authorized signatory.

The evidence and documentation should be thoroughly prepared, reviewed and with insight into the procedural requirements. Considering the submission deadline is fixed for the calendar year 2021, delaying preparation could lead to rejection of the business vat refund application or partial recovery of VAT claim. Therefore, non-UAE businesses should start to prepare and make refund claims immediately.

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