HASSLE FREE VAT REFUND FOR CONFERENCES AND EXHIBITION!

1. INTRODUCTION

• The United Arab Emirate is becoming popular as “The Economic Gateway to the world.” Its strategic location has helped it to be The Business Hub for the world.  Being the economic center for Asia, Africa and Europe. It has seen over the past few years tremendous growth in terms of economy and business facilitation services.
•  One can say that most of the world’s largest conglomerates have their presence in the UAE. It has been one of the biggest host to various Sporting events, Business conferences, Exhibitions and meetings.
• The Federal Tax Authority keeping this in mind provided a special refund scheme for suppliers and recipients of exhibition and conference service. The FTA issued a user guide in July 2018 providing the methodology to claim refund. Before seeing the mechanism to claim Vat refund lets have go through some key aspects-

2. KEY ASPECTS OF FTA USER GUIDE-

• What is Exhibition and Conference Services?
  • Access
  • Attend or participate in an exhibition or conference
  • Occupy space for purpose of conducting an exhibition or conference.

• What is an Exhibition?

  It is an event which is not longer than seven days to display, present or show goods and services. All these would be in accordance to the permit issued by the competent authority.

• What is a conference?

  Any formal meeting which is not longer than seven days, attended by the people of shared interest in accordance with the permit issued by the competent authority. After knowing some important concepts, let’s have a look at the licensing application, documents etc. required.

3.  LICENSING REQUIREMENTS AND DOCUMENTATION

Now that we know about the Concepts, eligibility and Document requirements let us answer some basic fundamental questions.

4. GENERAL QUESTIONS

1. 4. How this scheme does work?
2. 1 Mechanism of refund

• The amount of refund requested by the supplier must be either equal to or less than the VAT charged on the supply of the services by him.
• Just note that before utilizing the benefit of the scheme the supplier MUST be licensed in respect of scheme.

2. What is processing time for issuing license by FTA?

   FTA will take upto 20 business days to review the application. The Supplier will be notified of the results. If accepted, FTA will issue the license within 5 business days. It will be provided in letter format and will be stamped by the FTA, scanned and sent by email. The FTA will not charge a fee for such a license.

3. What Documents are to be collected from international Customer? A declaration which states that the International Customer:
   1. Does not have a Place of Establishment or a Fixed Establishment in the UAE; and
   2. Is not registrant or required to register for VAT in the UAE.

   Also to ensure that there is no uncertainty regarding the usage of any declaration, the Declaration should also provide the details of the parties and Services to which it relates.

4. What should supplier do after receiving declaration? Where the conditions for the VAT refund are met, the Supplier must:
   1. Retain the original declaration provided by the International Customer.
   2. Provide the International Customer with a tax invoice. The invoice should charge applicable VAT and refund the same amount (or less) stating “the supply falls under the special VAT refund scheme”.
   3. Not collect VAT from the International Customer.
   4. Report the VAT charged in respect of the Services as output tax in the relevant TaxReturn.
   5. In the same Tax Return, claim a VAT refund of the amount of VAT charged.

5. Do you need to maintain records even after the Event? The parties should retain records of all of the documentation issued and received under the scheme for the period of five years from the end of the tax period in which the license expired.

6. What happens if the International Customer sells something in the state during an event or exhibition etc.? It would be interesting to note that the Vat refund scheme described in the guide applies only where the relevant services are supplied to-
   1. Non Resident or
   2. Non Registered or
   3. Not required to be registered person
   So if the services are supplied to anyone who do not fulfill above condition this scheme refund benefit cannot be claimed. Then in such cases the supplier would charge and collect VAT from the recipient and the recipient may take credit of such Input VAT. The supplier of services cannot claim refund.

7. When would the International Customer be required to get registered in UAE? If the international customer who is Non- Resident makes any taxable supplies then he has to mandatorily get registered under VAT. That is there is no Minimum Threshold limit to get registered.

Scheme like these are always welcomed. The ease of doing business is one of the main factor for a Business house to get itself associated to a place.

Our tax experts at MBG operating in the UAE deliver fully integrated assistance across various tax disciplines. By combining our local tax expertise and global reach along with a strong understanding of the business intricacies, we put forward holistic strategies to resolve complex tax-related issues.

If you have any concerns in any matter we are happy to discuss and help you for a way forward.