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VAT Refund as per UAE FTA rules

During the tax period, all registered businesses must file a VAT return detailing their sales, purchases, output VAT, and input VAT paid. The amount received on sales is the output VAT, whereas the amount paid to the supplier for purchases/expenses is the input VAT. The amount of eligible input VAT that can be changed with the amount of output VAT will be allowed. The effect of altering the output VAT and input VAT will be one of the following scenarios.

VAT Payable: If the output VAT exceeds the input VAT, the difference is VAT payable, which must be paid to FTA.

VAT Refundable: If the output VAT is less than the input VAT, the difference will be refunded as VAT.

How to Treat VAT Refundable as per UAE VAT?

In order to treat the excess input VAT, also known as VAT refundable, the taxpayer has two options:

  • The taxpayer will be able to get a VAT refund if he or she qualifies.
  • If he does not request a refund of the excess input VAT, the excess recoverable tax will be carried forward to future tax periods and can be used to reduce the unpaid tax and/or penalties, or he can request a refund at any time.

What is a VAT Refund?

A VAT refund is the reimbursement of the VAT that you paid on goods purchased in the UAE as a non-resident. If the product you bought included 5% of VAT, you can get the amount corresponding to this consumer tax paid back to you when you leave the territory.

One thing to keep in mind – get ready, some technicalities are coming your way – is that the VAT is calculated on the pretax base price of the item or service, NOT as a percentage of the final price.

For more details bout the tourist vat refund in the 
UAE please read.

Consult with the Best VAT Consultants in Dubai, UAE

The revised guidance from the FTA on VAT refund for business visitors is a welcome change for the entire business community. Foreign businesses are now faced with less administrative burden in terms of the documents required for applying for a VAT refund in the UAE. However, the applicants may face delays or rejection if the process is not executed properly, or invoices contain errors. Fortunately, the best VAT consultants in Dubai such as Alya Auditors provide the best tax services to businesses. Alya’s tax agents in Dubai assess the VAT refund eligibility and help in executing the process in compliance with existing rules.

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