What is VAT 702

VAT 702 is a form provided by the Federal Tax Authority (“FTA”) pursuant to which a non registered importer notifies the FTA to either cancel or liquidate an eGuarantee or to refund or collect an eDirham deposit. In line with the relevant legal provisions, there would be specific scenarios where a non-registered importer would provide a eGuarantee or an eDirham deposit to clear goods at customs, which are subject to tax and duty suspension. Upon export of the goods, the importer is eligible for a refund or a return of the financial guarantee.

When to submit a VAT 702?

  • You have provided a eGuarantee or eDirham deposit to FTA on the FTA eServices portal using VAT 301 while importing goods under tax suspension
  • You have completed the duty suspension claims process with the relevant customs authority
  • One business day has passed since the approval of your claim by customs

Scenarios to consider for filing

  1. If goods were imported under tax suspension and have been exported completely, then the importer shall submit the duty claim to the relevant custom authority and the VAT declaration will be updated automatically.
  2. If the goods were imported under tax suspension and have been sold or used partially in the UAE, then the importer shall submit the duty claim to the relevant custom authority and applicable VAT will be deducted from the deposit/e-guarantee for the goods sold or used in the UAE on VAT 702.
  3. If the goods were imported under tax suspension and have been sold or used completely in the UAE, then the importer shall submit the duty claim to the relevant custom authority and applicable VAT will be deducted from the deposit/e-guarantee for the goods sold or used in the UAE on VAT 702.

Who should submit a VAT 702?

  • You are not registered with the FTA
  • You have imported goods under duty suspension regime after 1st January 2018
  • You have paid an e-Dirham deposit or provided an e-Guarantee to the FTA upon import of goods
  • You have either exported the goods outside the UAE, sold, consumed, damaged, or lost the goods while still under suspension in the UAE.

Hallmark international auditors is a one-stop solution to all your accounting services, auditing services, and taxation matters. We are the leading financial consultants in the UAE approved by the FTA who can help you with tax-related matters.

If you have any queries regarding this, Get in touch with us. Please call 0557636758/ 04-2599055 or e-mail at info@hallmarkauditors.com