VAT Refund for Business Visitors in UAE

FTA has launched the “VAT refund for business visitor’s scheme from 2nd April 2019. The scheme aims to reciprocate the efforts made in countries that offer VAT refund to visiting UAE businesses. The business meet the following condition are entitled to refund:
  • The foreign business must not have a place of establishment or fixed establishment in the UAE or in any VAT -Implementing GCC States.
  • Foreign business must not be a taxable person.
  • Foreign business must register as an establishment with a competent authority in the jurisdiction in which they are established.
  • Foreign business must from a country that implements VAT & that equally provide VAT refund to UAE businesses in similar circumstances.
Foreign business resident in any GCC states i.e. not considered to be an implementing state may submit refund application under this scheme. A refund is not available if any of the following applies:
  • The foreign business makes taxable supplies in the UAE(unless such supply obliged to account for VAT under reverse charge mechanism)
  • The input tax relates to Goods or Services is subject to statutory block under UAE VAT Laws.
  • If a foreign business is a non-resident tour operator.
  • The Foreign Business is from a country that does not in similar circumstances provide VAT Refunds to UAE entities.
  Key points for the timing of refund claim by Foreign Business:
  • The period of claim shall be a 12 calendar month.
  • The claim for the 2018 calendar year (1st January 2018 – 31st December 2018), refund application can be made from 1st April 2019.
  • The claim for 2019 calendar year (1st January 2019 – 31st December 2019), refund application can be made from 1st March 2020.
  • The Minimum claim amount of tax that may be submitted under VAT refund for Foreign Businesses shall be AED 2000.
  Refund Form shall contain such information as required by the FTA:
  1. Proof of incorporation in your country of establishment (such as a certificate of incorporation/registration with the competent authority)
  2. Tax Registration certificate with the competent Tax Administration
  3. If you are undertaking exempt or non-business activities in your country of establishment, which do not give you the right to fully recover any input tax, you will need to provide a letter, or alternative evidence, from your Tax Administration which would indicate the level of input tax you are eligible to recover on expenses
  4. The original hard copies of invoices with proof of payment that you are claiming for a refund (no soft copies require while submitting the request for a refund, the invoice must be English or Arabic)
  5. Copy of passport of the Authorised Signatory
  6. Proof of Authority of the Authorised Signatory
  Important Points to be noted:
  • Foreign Business visitors must be required to submit original hard copies of invoices, your certificate of establishment/incorporation and your Tax Registration Certificate (original or attested hard copies).
  • The relevant invoices must be addressed to the name of the applicant (i.e. name of the Foreign Business) and not only in the name of any employee. Please note that if the hard copies are not received by the FTA within one month of submitting this application, your Refund will be rejected. The documents will be sent at FTA, P.O Box 2440, Dubai, UAE.
  • The foreign business must enclose a pre-paid envelope, via a courier company of your choice, with the name of the applicant in order for the FTA to return your documents. FTA will not responsible for loss of documents in transit.
  • FTA may demand additional documents to support refund application. Where the FTA requests additional information, you will be notified of the approval or rejection of the request within two months of receipt of the requested information, or if the FTA has not received a response to its request, within two months of the expiration of the period to respond to the FTA’s request.
  • Once all the information is received in hard copy, the Refund Form will be processed within 4 months of submission. You will receive an email notification from the FTA on the result of your application. Once your claim is approved, the FTA will aim to issue the Refund within 10 business days.
The approved name of countries with reciprocal arrangements has been provided by the UAE Ministry of Finance (MoF). If your country is not on the approved name or does not have a VAT system, you should contact the Ministry of Finance of your country, which would have to contact the UAE Ministry of Finance for inclusion on the approved name list.  Austria, Bahrain, Belgium, Denmark, Finland, France, Kuwait, Iceland, Isle of Man, Lebanon, Luxembourg, Namibia, Netherlands, New Zealand, Norway, Oman, Qatar, Saudi Arabia, South Africa*, Sweden, UK, Zimbabwe *please note that refunds are only available for expenses relating to goods that are exported from a designated UAE port within 90 days and does not apply to services. MBG Corporate Services can provide assistance on the below-mentioned services:
  • Assessing eligibility of Business Visitors for refund;
  • Assistance in preparation of documentation for refund;
  • Filling of VAT refund application form;
Contact Us for more information Last Updated: 4th April 2019 This article is contributed by:  CA Vipin  Kumar Ahuja Senior Manager, Taxation

Tag: VAT refund