UAE VAT refund scheme an opportunity for business to increase international travel spend

VAT Refund scheme for tourists in UAE

Vat refund UAE

The UAE Federal Tax Authority presented a VAT of 5% in January 2018, and will dispatch Tax Free Shopping in Q4 2018. Tax Exempt shopping is the acquiring of merchandise in the UAE which will be traded (subject to terms and conditions) whereby customers can acquire a discount on the VAT or tourist vat refund uae on these things, giving that they approve their buys as indicated by nearby principles. Dubai has for quite some time been a well-known shopping goal for universal voyagers. Between the twice-yearly shopping celebrations and the multiplication of universal brand name stores, there is no lack of approaches to burn through cash on glossy things.

The presentation of a VAT discount plan ought to go far to keeping the city at the highest point of many travelers’ shopping records. Same time business can take opportunity by registering themselves under VAT refund scheme to increase their international travel spend.

Who is eligible to get VAT refund UAE?

“Overseas Tourist” implies any natural Person who isn’t resident in any of the Implementing States or in other words all non-UAE residents above 18 years old and who isn’t a team part on a flight or on the other hand air ship leaving an Implementing State and the minimum purchase amount is 250 AED.
What are the conditions to get VAT refund?
• Products ought to be purchased by the tourist in the UAE.
• Visitor visiting the UAE must exit UAE inside 90 days from the date of shopping alongside the things purchased.
• With the end goal to get the VAT Refund, visitors ought to make sure only to purchase from enlisted organizations for tourist refund scheme conspire in the UAE.

What all should be done for vat refund for tourists in Dubai?

1. The visitor takes merchandise and labeled receipt from registered buisness under VAT refund scheme to the airplane terminal, seaport or outskirt crossing
2. The tourist goes to a Validation point: – For airplane terminals: Before checking in and going through security
3. When approved, the visitor picks a refund option (money or card discount)
4. VAT refund will be process by the authorized agency.

What amount does the traveler get back?

The tourist will get 85% of the aggregate VAT sum paid, short an administrator charge of 4.80 dirhams per Tax Free form.

What Businesses need to do?

Businesses must be enrolled for VAT with the FTA to give a Tax Registration Number (TRN), be fully informed regarding their VAT returns and settlement of payable expense, be a vender of products qualified to get charge discounts as controlled by the FTA, present their request to join the scheme to the authorized agency and be liable to a credit check. After successful registration business need to report amount paid to the tourists under the Tax Refunds Scheme for Tourists in their regular VAT returns.

What goods are eligible to receive tax refunds?

All taxable goods except for:
1. Services.
2. Goods that are not accompanied by the Overseas Tourist at the time of leaving UAE.
3. Food and drinks intended for immediate consumption.
4. Motor vehicles, boats and aircraft.

UAE VAT Law on Tourist Scheme. {Source ~ Federal Decree-Law No (8) of 2017 on Value Added Tax}
As per the Article 68 Clause 2 of Executive Regulations of the Federal Decree-Law No (8) of 2017 on Value Added Tax following conditions shall apply to the Tax Refunds Scheme for Tourists:
1. The Goods which are subject to the Tax Refunds for Tourists Scheme must be supplied to an overseas tourist who is in the State during the purchase of the Goods from the supplier.
2. At the Date of Supply, the overseas tourist intends to depart from the State within 90 days from that date, accompanied by the Goods.
3. The relevant Goods are exported by the overseas tourist to a place outside the Implementing States within 3 months from the Date of Supply, subject to such conditions and verifications as may be imposed by the Authority.
4. The phrase “overseas tourist” means any natural Person who is not resident in any of the Implementing States and who is not a crew member on a flight or aircraft leaving an Implementing State.
5. The Authority may publish a list of Goods that shall not be subject to Tax Refunds for Tourists Scheme.

Alya Al Marzooqi Auditing Chartered Accountants are the team of Certified Chartered Accountants offering reliable and cost effective accounting solutions to business all over the UAE including Dubai, Abu Dhabi, Sharjah, Ajman, Ras Al Khaimah, Um al Quwain and Fujairah. Our packages are affordable and suitable to all growing business, startups and stabled business.
We have quick solution for all your accounting, bookkeeping and taxation related needs, our expert consultants can help you to solve all your basic to extreme level concerns regarding VAT, accounting and bookkeeping.

Alya can help you solve all your VAT related queries.For more details please contact us on Tel: +971 4 876 9377, Mob: +971 52 975 0690, +971 52 475 4007, email us at : audit@alyaauditors.com

UAE latest changes on late payment of VAT penalties for businesses

AE latest changes on late payment of VAT penalties for businesses

VAT relief: UAE latest changes on late payment of VAT penalties for businesses

Earlier, voluntary disclosures too carried high penalty charges and that’s scaled back

In October last year, the UAE Federal Supreme Court upheld the imposition of a 300 per cent late payment penalty on submission of Voluntary Disclosures (VD) – a mechanism that rectified an omission identified in past VAT (Value Added Tax) filings.

The impact of the decision was wide-ranging and made businesses jittery about the cost of non-compliance. It led to businesses having second thoughts on whether they should voluntarily come forward and admit an error. Many, since inception, were always apprehensive to undertake any corrective steps simply due to the quantum of penalties and the fear of being noticed by the Federal Tax Authority (FTA) that would trigger an audit or assessment.

Collective relief

To discourage delay in payment of taxes, the UAE Government had earlier kept severe penalties ranging from 6 per cent of the unpaid tax for the first month of delay and up to 1 per cent per day, with an upward ceiling limit of 300 per cent. While the intent to impose penalty was in good spirit, it unfortunately also applied to cases where businesses came forward suo moto (by submitting VD) to admit a genuine mistake of an error or omission in their past tax filings.

Cognizant of this, the UAE Government on April 28, 2021 issued Cabinet Decision No. 49 of 2021 significantly reducing the quantum of penalties across various categories of violations. The three key changes were (i) reduction in late payment penalty from 1 per cent per day to 4 per cent per month (ii) no late payment penalty on voluntary disclosure if tax is paid within 20 days of its submission; and (iii) introduction of amnesty scheme enabling a reduction in unpaid past penalties by 70 per cent.

With the new decision, the late payment penalties have been lowered to 2 per cent for the first month of delay and 4 per cent monthly with the maximum ceiling as is. However, the most relieving change, which will make every business cheer, is the fact that the late payment penalties would not be applied on VD if the differential tax is paid within 20 days of its filing.

200% penalty

In cases where a taxpayer fails to submit a VD before being notified of the tax audit, the court’s decision prescribes a 50 per cent penalty of the unpaid tax and 4 per cent per month to be calculated from the due date of the tax until the date of receipt of the tax assessment. This suggests that if a tax audit is initiated on any business for a period related to the year 2018, it could be subject to a penalty as high as 200 per cent of the unpaid tax.

Considering the higher quantum of penalty post-tax audit notice, businesses should become cautious and immediately start assessing their past VAT and excise filings and rectify the errors voluntarily at the earliest.

Amnesty

The UAE Government has also introduced an amnesty scheme through this, where unpaid penalties that were levied under the previous Cabinet Decision No. 40/2017 can be reduced by 70 per cent provided the taxpayer discharges the unpaid tax and 30 per cent of total penalties by December 31, 2021. While further details are awaited about the scheme and its application, it also needs to be seen whether it could apply to cases pending under litigation.

The reduction in penalties is a step in the right direction as it should result in significantly higher compliance among businesses, consequently leading to increased tax collections for the Government. It surely is the best Eid Gift for business taxpayers…

How can we help?

If your business in DMCC/JLT Dubai and is looking to understand more about the taxes in the country and conduct an audit for your company, then you can take the assistance of Alya Auditors– Chartered Accountants. Alya is a reputed name in the field of Auditing and Accounting and is also a certified firm in almost all the free zones in the UAE including DMCC, DWC, DWTC. We will assess all the needs and requirements of the company and accordingly provide a solution.

For any more details on the services provided by Alya Auditors -Chartered Accountants, feel free to Contact Us. We will be happy to help.

Source : Gulf News

Recent Posts

VAT registration of ‘Sole Establishments’- New Amendment

VAT registration of ‘Sole Establishments’- New Amendment

VAT registration of ‘Sole Establishments’- New Amendment

Please be informed that Public Clarification VATP026 replaces Public Clarification VATP021.

A natural or legal person may own a number of sole establishments. There has been uncertainty on whether each sole establishment needs to obtain a separate VAT registration or whether all such establishments should be included under one VAT registration.

This Public Clarification clarifies the VAT registration obligations of a person in respect of its sole establishments. Note that the term “person” refers to a natural or legal person.

A sole establishment (also referred to as sole proprietorship) is a form of business that is 100% owned by a person. A sole establishment does not have a legal personality that is independent of its owner and is accordingly considered to be the same person as to its owner. It should be noted that, for VAT purposes, a One-Person Company LLC or other similar entities are not considered sole establishments, and are seen as a distinct and separate legal person from their owner (unless the relevant applicable legislation state otherwise). For more details download the entire rule here.

How can we help?

If your business in DMCC/JLT Dubai and is looking to understand more about the taxes in the country and conduct an audit for your company, then you can take the assistance of Alya Auditors– Chartered Accountants. Alya is a reputed name in the field of Auditing and Accounting and is also a certified firm in almost all the free zones in the UAE including DMCC, DWC, DWTC. We will assess all the needs and requirements of the company and accordingly provide a solution. We can also help you professionally by registering for your TRN and monthly accounting as per the latest UAE rules and file your VAT returns thus ensure you keep your books of accounts error-free and make sure that you won’t get any  VAT penalties from the FTA.

For any more details on the services provided by Alya Auditors -Chartered Accountants, feel free to Contact Us. We will be happy to help.

Recent Posts

UAE reduces penalties on VAT, excise tax as a Covid Relief

UAE reduces penalties on VAT, excise tax as a Covid Relief

UAE reduces penalties on VAT, excise tax as a Covid Relief

The new provisions will be applicable 60 days as from April 28, 2021.

The UAE has reduced old penalties on value-added tax (VAT) and excise tax in order to help companies and individuals better cope with the impact of the Covid-19 pandemic. According to newly-released Cabinet Decision No. 49 of 2021, tax payers who currently have penalties pending can see those reduced to 30 per cent, provided they settle them before December 31, 2021.

Going forward, late payment penalties will be reduced to four per cent per month, a substantial reduction from one per cent per day while an overall cap stays at 300 per cent.

The new provisions will be applicable 60 days as from April 28, 2021.

Thomas Vanhee, founding partner of Aurifer Middle East, said technical provisions now determine that late payment penalties should only be calculated as from 20 weekdays after submitting the voluntary disclosure.

He said the Cabinet decision constitutes a very important reduction in the penalties and provides an excellent opportunity for tax payers to get a fresh start.

Anurag Chaturvedi, managing director of Chartered House, said this is a best relief provided by the government to the pandemic-hit businesses in the UAE.

“A number of businesses in the UAE succumbed to administrative penalties on account of delay in submission of the due tax. The new regime of administrative penalties are at par with global standards. The most relieving change is maximum penalty of four per cent of unpaid tax per month compared to one per cent of unpaid tax for each day of delay as per the old provisions,” said Chaturvedi.

How can we help?

If your business in DMCC/JLT Dubai and is looking to understand more about the taxes in the country and conduct an audit for your company, then you can take the assistance of Alya Auditors– Chartered Accountants. Alya is a reputed name in the field of Auditing and Accounting and is also a certified firm in almost all the free zones in the UAE including DMCC, DWC, DWTC. We will assess all the needs and requirements of the company and accordingly provide a solution.

For any more details on the services provided by Alya Auditors -Chartered Accountants, feel free to Contact Us. We will be happy to help.

Source: Khaleej Times

Recent Posts

Temporary Zero rating of Medical Equipment

VAT Zero Rating- of Certain Medical Equipment

Temporary Zero-rating of Medical Equipment

A supply or import of certain medical equipment may be zero-rated where the supply or import occurs within the period from the effective date of the Cabinet Decision until 31 December 2021. The remainder of this Public Clarification describes the rules for determining which medical equipment are covered by the zero-rating rules and the timeframes for the application of the rules.

In accordance with the Cabinet Decision, a supply or import of certain medical equipment may be zero-rated. It should be noted that that the zero-rating of supplies and imports under the Cabinet Decision is separate, and in addition to, zero-rating of any other medical equipment in accordance with Cabinet Decision No. 56 of 2017 on Medications and Medical Equipment Subject to Tax at Zero Rate.

The “medical equipment” to which the temporary zero-rating rules apply are personal protective equipment used for the protection from Covid-19, and which contain the features and meet the specifications determined and specified by the Ministerial Decision. Such medical equipment is limited to:

  1. Medical face masks that are not included in the Cabinet Decision No. 56 of 2017 on
  2. Medications and Medical Equipment Subject to Tax at Zero Rate (of approved standards 14683 and UAE.
  3. Half filtered face mask (UAE.S EN 149);
  4. Non-Medical “community” face mask made from textile (UAE.S 1956);
  5. Single-use gloves (UAE.S ISO 374-2); and
  6. Chemical disinfectants and antiseptics intended for use on the human body, but excluding detergents, cosmetics, and personal care products (UAE.S EN 1276, EN 1650, and
    EN 14476:2013+A2).

 

How can we help?

If your business in DMCC/JLT Dubai and is looking to understand more about the taxes in the country and conduct an audit for your company, then you can take the assistance of Alya Auditors– Chartered Accountants. Alya is a reputed name in the field of Auditing and Accounting and is also a certified firm in almost all the free zones in the UAE including DMCC, DWC, DWTC. We will assess all the needs and requirements of the company and accordingly provide a solution.

For any more details on the services provided by Alya Auditors -Chartered Accountants, feel free to Contact Us. We will be happy to help.

Recent Posts

Dubai Customs handles Dh4.6b worth of refund in the past few months

Dubai Customs refund

Dubai Customs handles Dh4.6b worth of refund in the past few months

Dubai Customs’ new smart refund system substantially reduces the time required to refund duty deposits

Dubai Customs has reported 688,201 duty refund transactions with a value of Dh4.6 billion in the first nine months of 2020.

The smart refund system helped reduce customers’ time and cost, through simpler and more precise calculations. The system also substantially reduced the time required to refund duty deposits to traders and customers.

“Dubai Customs is moving steadily toward the UAE’s 50th Anniversary fulfilling all Fourth Industrial Revolution requirements and expectations through adoption of the latest cutting-edge AI customs systems and projects,” said Ahmed Mahboob Musabih, Director General of Dubai Custom.

“This places Dubai in its right position toward being the smartest city in the world, and fulfilling Dubai Customs’ vision of becoming the leading customs administration in the world supporting legitimate trade. The outstanding economic performance and figures indicate the quick recovery from the repercussions of the coronavirus pandemic. The wise directives of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President, Prime Minister of UAE and Ruler of Dubai which included generous stimulus packages have pushed the economic wheel forward and supported businesses in what has been a challenging time. This is reflected by the excellent Dubai external trade activity in the first half of 2020 which touched on Dh551 billion, with more than 7.2 customs transactions processed,” he added.

Refunded duty deposits from January to September amounted to Dh3.5 billion, and there were 76,391 Makasa automated transfer claims with a value of Dh382 million during the same period.

“Despite the spread of the pandemic which wreaked havoc on economy around the world, the Claim and Refund Department performed very well in the 1st nine months of 2020 thanks to the use of advanced technology. Our Smart Refund System is the first of its kind in the world. This is very beneficial to Dubai Customs and to the clients alike. We are the first customs department at the GCC level to provide electronic refund of duty deposits,” said Mohammed Al Hashmi, Director of Claim and Refund Department.

Dubai Customs said claims can be applied around the clock, documents can be verified digitally, and all applications can be tracked using the mobile phone. Thanks to this facility, productivity in clearing non-hazardous shipments increased 98 percent.

How can we help?

If your business in DMCC/JLT Dubai and is looking to understand more about the taxes in the country and conduct an audit for your company, then you can take the assistance of Alya Auditors– Chartered Accountants. Alya is a reputed name in the field of Auditing and Accounting and is also a certified firm in almost all the free zones in the UAE including DMCC, DWC, DWTC. We will assess all the needs and requirements of the company and accordingly provide a solution.

For any more details on the services provided by Alya Auditors -Chartered Accountants, feel free to Contact Us. We will be happy to help.

Recent Posts

UAE tax rules relaxed, penalties reduced in the UAE

Tax rules relaxed penalties reduced in the UAE

Tax rules relaxed, penalties reduced in the UAE

The cabinet also approved the issuance of a decision regarding the requirements of the Natural Person Insolvency Law.

The UAE cabinet has amended the Executive Regulation of Federal Law on Tax Procedures.The amendment extends the tax notification from 10 to 40 working days. The amendment also covers the time limit for issuing the decision of the Federal Tax Authority to reduce or exempt administrative penalties from 20 to 40 working days from the date of receiving the application.

This came as the Cabinet met on Wednesday. Chaired by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, it approved several strategies.

The cabinet approved the issuance of a decision regarding the requirements of the Natural Person Insolvency Law. The law aims at enhancing the competitiveness of the UAE by ensuring the ease of doing business and creating favorable conditions for individuals facing financial difficulties.

How can we help?

If your business in DMCC/JLT Dubai and is looking to understand more about the taxes in the country and conduct an audit for your company, then you can take the assistance of Alya Auditors– Chartered Accountants. Alya is a reputed name in the field of Auditing and Accounting and is also a certified firm in almost all the free zones in the UAE including DMCC, DWC, DWTC. We will assess all the needs and requirements of the company and accordingly provide a solution.

For any more details on the services provided by Alya Auditors -Chartered Accountants, feel free to Contact Us. We will be happy to help.

Recent Posts