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VAT Refund in the UAEComprehensive Guide by JSC
All taxable persons (legal entities or individuals) in the UAE are required to file VAT returns for each tax period. These returns must include detailed records of sales, purchases, output VAT collected, and input VAT paid during the tax period. Proper documentation ensures compliance with UAE VAT laws.
Key VAT Terms
- Output VAT: The VAT collected by a business on its taxable sales.
- Input VAT: The VAT paid by a business to its suppliers for taxable purchases.
The reconciliation of input VAT and output VAT can result in two outcomes:
- VAT Payable: When output VAT exceeds input VAT.
- VAT Refundable: When input VAT exceeds output VAT.
Treatment of VAT Refundable in the UAE
Taxpayers in the UAE have two options for handling refundable VAT:
- Request a Refund: The refundable amount can be reclaimed by submitting a formal application to the Federal Tax Authority (FTA).
- Carry Forward: The refundable amount can be carried forward to future tax periods for adjustment against subsequent VAT liabilities. Companies with stable cash flow often prefer this option to streamline their tax obligations.
Process for Claiming VAT Refund
To request a VAT refund, taxpayers must complete the following steps:
- Indicate Refund Request: Log in to the FTA e-services portal and select ‘Yes’ in response to the question, “Do you wish to request a refund for the above amount of excess recoverable tax?”
Submit VAT Refund Form (VAT311):
- Access the ‘VAT Refund’ tab under the ‘VAT’ section.
- Click on ‘VAT Refund Request’ and fill out the form. Key details required include:
- TRN (Tax Registration Number)
- Legal name of the entity (in English)
- Total excess refundable tax amount
- Amount requested for refund
- Remaining eligible refundable tax amount
- Late registration penalty (if applicable)
- Authorized signatory details and declaration
- Access the ‘VAT Refund’ tab under the ‘VAT’ section.
Most fields are auto-populated. Double-check all entries to avoid errors.
3. FTA Processing and Notification: Once the form is submitted, the FTA
reviews the application. You will receive an email notification regarding the application’s outcome. Upon approval, the refund amount will be processed.
VAT Refund for Tourists
- Tourists visiting the UAE can claim VAT refunds on eligible purchases made during their stay. Key conditions for eligibility include:
- The tourist must intend to leave the UAE within 90 days of the purchase.
- The claim must be submitted within 90 days of the purchase date.
- The minimum spend for eligibility is AED 250.
- A maximum of AED 7,000 can be refunded in cash per claim.
- Tourists will receive 85% of the VAT refund after a processing fee deduction.
Ensuring Compliance and Efficiency
Introduced in January 2018, the UAE VAT system aims to streamline tax processes and minimize burdens on businesses and individuals. By adhering to the procedures outlined above, businesses and tourists can efficiently manage VAT refunds and stay compliant with UAE tax laws.
Contact JS Corporate Solutions today for expert VAT Refund services in Dubai.
At JS Corporate Solution (JSC), we specialize in providing expert VAT compliance and refund assistance. Contact us for tailored solutions that simplify your VAT obligations and ensure you maximize eligible refunds. With JSC, you’re always one step ahead in navigating UAE’s tax landscape.