VAT REFUND IN THE UAE

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VAT refund in the UAE  October 4, 2020(https://www.kbame.com/2020/10/04/)

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VAT Refund in the UAE (https://www.kbame.com/vat-refund-in-the-uae/) : All Taxable Persons (legal person or legal individual) in the UAE are required to file VAT returns according to their tax period that will show the details of sales, purchases. Output VAT collected and input VAT that was paid during the tax period has to be recorded properly. In this context, output VAT is the amount collected by the business (https://www.slateinteriorsme.com/) through its sales while input VAT is the amount that was paid to the supplier by the business. The adjustment of input VAT and output VAT will lead to one of the two scenarios: https://www.kbame.com/vat-refund-in-the-uae-2/

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VAT payable: This happens when output VAT is greater than input VAT VAT refundable: This happens when output VAT is less than input VAT

How is VAT refundable treated in the UAE? (https://www.kbame.com/vat-refund-in-the-uae/) The taxpayer has two options when it comes to dealing with the VAT refundable amount. He can either submit a request for the amount to be refunded to him or he can carry forward this refundable amount to future tax periods so that this can be adjusted against future tax payments. When companies have a healthy cash flow, they choose the latter option as there is no immediate need for cash.

How can VAT refund be claimed? (https://www.kbame.com/vat-refund-in-the-uae/) The first step of the process is to select ‘yes’ on the portal against the question ‘Do you wish to request a refund for the above amount of excess recoverable tax?’. After which you are required to submit the VAT refund application form (Form VAT 311). The following are the steps involved in submitting form VAT311: Login to the FTA e-services portal Locate the ‘VAT refund’ tab under the ‘VAT’ tab Click on ‘VAT refund request’ and fill in all the details in the form that shows up. The following are the details that need to be exhibited on this form: TRN, legal name of entity (English), total amount of excess refundable tax, the amount you wish to have refunded, remaining amount of eligible excess refundable tax, late registration penalty amount and authorized signatory and declaration. Most of the above-mentioned fields are auto-populated, so ensure that you double-check the details in order to avoid any errors in the form.

Once the form has been processed by the FTA, you will receive an email notification regarding the result of your application and upon approval, the amount will be refunded.

VAT refund for tourists (https://www.kbame.com/vat-refund-in-the-uae/) All tourists visiting the UAE are eligible to claim VAT refunds (https://www.kbame.com/vat-refund-inthe-uae/) on the goods purchased by them during their stay in the country, subject to certain terms & conditions like: the tourist must have explicit intention to leave the country within 90 days of purchase, a claim must be made within 90 days of purchase, the minimum spend in order to be eligible is Dhs. 250, the maximum limit for a cash refund is Dhs. 7000, tourists will only receive 85% of the VAT refund, and so on. The UAE introduced its tax scheme in January 2018 and since then has always ensured to alleviate any unnecessary burden on individuals and organizations through such schemes and procedures that are 1

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