The UAE Federal Tax Authority trn verification (FTA) has instituted a program for business visitors to the UAE to get refunds on Value Added Tax (VAT) paid for expenses incurred in the country. This is similar to VAT Registration refund schemes in the European Union. Let’s understand more about this business VAT refund scheme in the UAE.
The business VAT Registration refund scheme allows foreign companies to claim refunds on VAT paid for expenses in the UAE, if certain conditions are met.
A foreign business is any company registered with the proper authority in the jurisdiction where it is established.
Foreign companies can apply for VAT Registration uae refunds under this scheme in these cases:
a. The business is located in a GCC country that hasn’t implemented VAT yet. A company located in a GCC country besides the UAE and Saudi Arabia, which have implemented VAT, qualifies for the refund scheme.
b. The foreign business is located outside the GCC and meets these criteria:
Registered as an establishment with the proper authority where it is established.
Does not have a place of establishment or permanent establishment in the UAE or another country that has implemented VAT Dubai (currently only Saudi Arabia).
Is not a Taxable Person under UAE VAT – meaning it is not registered for VAT in the UAE or required to register.
Is from a country that provides VAT refunds to UAE entities under similar circumstances.
Note: The tax invoice claimed cannot relate to goods or services where the VAT Dubai is not recoverable. Certain supplies under UAE VAT Registration law do not qualify for input tax recovery. The foreign company claiming the refund must ensure it does not relate to non-recoverable goods or services.
Foreign tour operators are not eligible for tax invoice refunds under this business VAT retun uae refund scheme.
So while the framework is in place, the business VAT refund scheme has not been implemented yet. As a result, the exact process for claiming refunds is not available yet. The details will be provided later.