The UAE introduced Value Added Tax (VAT) in January 2018, impacting businesses and consumers. For foreign entities without a permanent UAE presence, understanding VAT and reclaiming refunds can be challenging. This guide simplifies the process, outlining eligibility, required steps, and practical tips to ensure a successful claim.

Who Can Claim a VAT Refund?

Foreign businesses can claim a VAT refund if they meet the following conditions:

  1. No Establishment in the UAE or Implementing States: No fixed or physical presence in the UAE or GCC states with VAT laws.
  2. Non-Taxable in the UAE: The business must not be registered as a taxable person in the UAE.
  3. No Business Activities in the UAE: No regular or ongoing operations within the country.
  4. Registered Business: Must be recognized and registered as a business in the home country.

Who Cannot Claim?

  • Foreign government entities
  • Non-resident tour operators
  • Businesses from non-reciprocal countries (countries without reciprocal VAT refund agreements with the UAE).

When Can You Claim a Refund?

  • Claim Period: Each refund covers a 12-month calendar year.
  • Minimum Claim Amount: AED 2,000.
  • Eligible Expenses: Expenses directly related to business activities. Non-recoverable expenses include entertainment and personal-use vehicles.

Documents Required

  1. Tax Compliance Certificate: Issued by your country’s tax authority and attested by the UAE Embassy.
  2. Tax Invoices: Must include a valid Tax Registration Number (TRN) and proof of payment.
  3. Authorized Signatory Documents: Passport copy and proof of authority (e.g., Power of Attorney).
  4. Original Invoices: Send hard copies of invoices with payment proof to the FTA. Scanned copies are accepted but must match company details.

Step-by-Step VAT Refund Process

  1. Create an e-Services Account
    • Visit the FTA website, sign up, verify your email, and activate your account.
  2. Create a Taxable Person Account
    • Log in, go to ‘Add New Taxable Person,’ and enter your legal entity details in English and Arabic.
  3. Access the Refund Form
    • Go to the VAT section, select ‘Business Visitor Refunds,’ and access the dashboard.
  4. Complete the Refund Form
    • Fill all mandatory fields (*), attach required documents, and save progress regularly.
  5. Submit the Application
    • Review for accuracy, click ‘Submit,’ and receive a confirmation email with your application reference number.

Application Status Tracking

  • Draft: Saved but not submitted.
  • Pending: Awaiting processing.
  • Resubmit: Corrections or additional information required.
  • Approved: Refund accepted.
  • Completed: Refund paid out.
  • Rejected: Missing requirements; corrections needed.

Deadlines to Remember

  • Opening Date: Applications open 1 March of the following year.
  • Submission Deadline: Submit by 31 August annually.
  • Special Conditions: Businesses in non-Implementing GCC States have flexibility on claim periods.

Common Challenges and Solutions

Challenges Solutions
Document errors Double-check document formats and details.
Meeting minimum claim (AED 2,000) Combine eligible expenses for the year.
Resubmission requests Monitor emails and address promptly.

Key Considerations

  • Reciprocal Arrangements: Refund eligibility depends on reciprocal agreements. Check the FTA’s approved list.
  • Specific Reliefs: Some exceptions apply, e.g., exhibitions (Cabinet Decision No. 26 of 2018).
  • Bank Details: Ensure your provided bank details match your registered information.

FAQs

  • Can I claim VAT on all expenses?
    No, VAT on entertainment and personal-use vehicles is non-refundable.
  • What if my application is rejected?
    The FTA will provide reasons. Resubmit with corrections.
  • How long does it take to receive a refund?
    Processing may take up to 4 months, with refunds issued within 10 business days after approval.

Conclusion

Reclaiming VAT in the UAE requires attention to detail, proper documentation, and adherence to deadlines. By following this guide, you can simplify the process, minimize errors, and secure your refund efficiently. Plan early, stay meticulous, and track your application for a smooth experience.