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 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.

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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.

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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 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.

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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 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.

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Registration for non-financial entities, individuals for Anti Money Laundering in the UAE extended until April 30

Anti Money Laundering Registration in the UAE extended until April 30

Registration for non-financial entities, individuals for Anti Money Laundering in the UAE extended until April 30

The UAE Ministry of Economy announced the extension of the deadline granted to companies in the “specific non-financial business and professions” sector to register in government regulations approved for countering money laundering and combating the financing of terrorism until the end of April.

The decision is due to the large numbers of companies in the sector seeking to register in the last days of the previous deadline, which expired on March 31, taking into account the conditions of companies and the business sector in general during the period of the Covid-19 pandemic.

The ministry explained that the targeted companies, which include brokers and real estate agents, auditors, dealers of precious metals and gemstones, and corporate service providers, are required to undergo registration, which is mandatory and for free, before the end of the new deadline, in the goAML system and the automatic reporting system for sanctions lists and take the necessary measures to achieve complinace with the requirements of Federal Law No.20 of 2018.

It called on the concerned companies to take advantage of the new period for registration to avoid the penalties and fines stipulated in the law, which will be applied from May 1. Fines start from Dh50,000 to reach Dh5 million, while the penalties for companies that fail to register include the suspension of their licences or their closure.

Abdullah Sultan Al Fan Al Shamsi, Assistant Under-secretary for the supervision and follow-up sector at the Ministry of Economy, said: “Due to the increased level of response in the business sector and non-financial professions identified for mandatory registration, the Ministry of Economy decided, in coordination with its partners from the relevant government agencies, to extend the grace period granted to the target companies and give them more time until the end of the current month to complete the registration process and begin taking the necessary legal measures to comply with the requirements of the law and its implementing regulations.”

“The goal is not to impose violations, but to ensure compliance, and the decision comes with the aim of taking into account the conditions that various companies and business sectors are going through as a result of the Covid-19 pandemic and its repercussions on a global scale, stressing that the Ministry of Economy is keen to build a solid and positive relationship with the private sector based on the principle of partnership.”

Al Shamsi emphasised that the designated non-financial business and professions sector is a major partner in the UAE’s efforts to combat money laundering and has a pivotal role in supporting government efforts to build a safe and stable economic environment away from money laundering and terrorist financing crimes.

He pointed out that many of the companies concerned in the sector in its four categories showed a high level of awareness and commitment and registered, but there is still a percentage of companies that have not registered in the two systems. Extending the grace period to gives an additional opportunity to these companies to rush to register, avoid violations and protect their business and investments from money laundering risks by complying with government control requirements.

Safia Al Safi, director of the Anti-Money Laundering Department at the Ministry of Economy, said that extending the grace period without applying any violations before April 30 allows companies to fulfill their obligations and initiate registration. The Ministry of Economy received more than 6,000 calls and inquiries during March.

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.

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Temporary Zero Rating – of Certain Medical Equipment in the UAE

VAT Zero Rating in the UAE- of Certain Medical Equipment

Temporary Zero Rating- of Certain Medical Equipment in the UAE

On 1 September 2020, the Cabinet issued a Cabinet Decision No. 9/12 O of 2020 (“Cabinet Decision”).The Decision concerns the temporary application of VAT at the 0% rate on certain supplies and imports of medical equipment. Furthermore, the Ministerial Decision No. 380 of 2020 (“Ministerial Decision”) issued by the Minister of Health and Prevention on 6 December 2020 (with effect from 1 September 2020) specifies the medical equipment that are zero-rated in accordance with the Cabinet Decision. In accordance with Cabinet Decision No. 15/3 O of 2021, the above decisions shall be effective until 31 December 2021.This Public Clarification provides a summary of the zero-rating rules introduced by the abovementioned Decisions.

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.

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 are
limited to:
• Medical face masks that are not included in the Cabinet Decision No. 56 of 2017 on medications and Medical Equipment Subject to Tax at Zero Rate (of approved standards 14683 and UAE.S ASTM F2100);

Half filtered face mask (UAE.S EN 149);

• Non-Medical “community” face mask made from textile (UAE.S 1956);

• Single-use gloves (UAE.S ISO 374-2); and

• 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).

The medical equipment mentioned in the Ministerial Decision are zero-rated in the following circumstances:

1. In respect of supplies of medical equipment, a supply can be zero-rated where the date of supply takes place, and the medical equipment is delivered to the recipient or placed at the recipient’s disposal in the period from 1 September 2020 to 31 December 2021.

2. In respect of imports of medical equipment, an import can be zero-rated when the medical equipment is imported in the period from 1 September 2020 to 31 December 2021. It should be noted that for the purposes of the Cabinet Decision, the date of supply must be determined in accordance with Articles 25 and 26 4/5 of the Federal Decree Law No. 8 of 2017 on Value Added Tax.

The zero-rating rules do not apply in respect of any supply of medical equipment where the date of supply, or the date the medical equipment is delivered to the recipient or placed at the recipient’s disposal, falls outside the period from 1 September 2020 to 31 December 2021. In such situations, the supply of medical equipment is subject to VAT at 5% and this VAT must be reported in the tax return of the relevant tax period (or periods) where the date of supply occurs.

Similarly, medical equipment cannot be zero-rated where the date of import is either before 1 September 2020 or 31 December 2021. In these cases, the importer would be required to account for VAT on the import at 5% in accordance with the normal procedures for payment of import VAT.

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.

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