UAE VAT Refund for Foreign Businesses
The Business Visitor Value Added Tax (VAT) Refund Scheme is a solution that allows business visitors to make a claim for refund of VAT paid on the goods or services purchased in/from the UAE.
It is no secret that the global health crisis has created an unprecedented impact that the world has not witnessed in decades. And along with the pandemic’s upshots, the oil prices dropped and triggered a discouraging outlook, with many believing that the dual shock has severely affected the whole economic cycle.
However, as the world navigates the uncharted waters of the aftermath brought about by this situation, the UAE mirrored resilience in the face of crisis—allowing its economy and business arena to recover ahead of everybody.
What is this about?
The UAE Federal Tax Authority (FTA) has made amendments to its guide regarding the ability to refund VAT for business visitors. The said guide highlights specific instances in which non-UAE and non-taxable resident businesses are entitled to claim a refund of VAT on expenses incurred in the UAE. It also states that refunds may only be requested by applicants on expenses sustained on or after the effective date of the agreement between their country and the UAE, as well as applicants are registered as an establishment with a competent authority in the jurisdiction in which they are established.
The new VAT refund guide includes the following changes:
The effective date for business visitors to claim VAT refunds when a country is added to the list of those having reciprocal agreements for VAT refunds for foreign businesses
Updated documentation requirements when submitting a request for VAT refund request
System-generated and scanned invoices will now be accepted as original, and scanned copies of the tax invoices or system generated tax invoices may now be submitted via e-mail.
In addition, business visitors can claim a VAT refund if the minimum amount of VAT is AED 2,000.
*Note: The deadline to submit VAT refund requests for this year remains the same—31 August 2021.
When can you claim a VAT refund?
Foreign businesses can claim a refund provided that the period of the claim is 12 calendar months, except during instances in which applicants are residents of GCC states which are not *Implementing States.
*What does Implementing States mean? A GCC State shall only be treated as an Implementing State if the GCC State treats the UAE as an Implementing State in its published legislation, and if they comply fully with all the provisions of the GCC VAT Agreement.
When is a VAT Refund not available under this scheme?
The said refund scheme will not be applicable during the following circumstances:
If the Foreign Business makes supplies in the UAE (unless the recipient is obliged to account for VAT under the reverse charge mechanism)
The input tax incurred on the goods or services is non-recoverable by a Taxable Person according to the UAE VAT legislation (such as entertainment and motor vehicles available for personal use)
The Foreign Business is from a country that does not in similar circumstances provide VAT Refunds to UAE entities
The Foreign Business is a non-resident tour operator
If they are foreign government entities
What are the requirements needed in order to get VAT refund?
A hard copy, original tax compliance certificate (such as business status certificate, certificate of commercial activities or equivalent) in Arabic or English, attested by the UAE embassy in the country of registration
Tax invoices that include the applicant’s Tax Registration Number
A self-declaration in Arabic or English if the applicant undertakes exempt/non-business activities at home
Copy of passport of the Authorized Signatory
Proof of Authority of the Authorized Signatory
Applicants must also take note of the following:
System-generated and scanned invoices require a proof of payment stamp or receipt to be attached to the invoice
As of April 2021 the list of countries eligible for the VAT Refunds for Business Visitors with reciprocal agreements are:
Austria, Bahrain, Belgium, Denmark, Finland, France, Germany, Iceland, Isle of Man, Korea, Kuwait, Lebanon (in certain circumstances), Luxembourg, Namibia (refunds are only available for business goods that are exported 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 goods that are exported from a designated UAE port within 90 days and does not apply to services), Sweden, Switzerland, United Kingdom, Zimbabwe.
For any questions or enquiries, reach us out at firstname.lastname@example.org or on WhatsApp +971 52 29 22 627.