According to the UAE’s value-added tax, the government has proposed various special refund plans, in which certain individuals have the right to request a refund of the value-added tax paid on goods purchased in the UAE, even if they are not taxable persons in the UAE. In each plan, certain conditions are stipulated, and these people need to meet these conditions to take advantage of the VAT refund. Let us understand the special refund program under UAE VAT.
1. New homes built by UAE citizens
This applies to UAE nationals who own or acquire land in the UAE who establish or commission their own residence in the UAE. Such UAE nationals have the right to request a refund of the value-added tax paid for the construction of houses.
To qualify for this program, almost none of the following conditions are met:
a. The claim should involve a new building that is only used as the residence of the person or the person’s family.
b. Claims should be filed within 6 months from the date of completion of the construction.
2. Business visitors
According to the corporate value-added tax refund scheme, foreign companies can request a refund of the value-added tax paid for expenses incurred in the UAE. Here, a foreign company refers to any company registered with the competent authority of its jurisdiction. To be eligible for this program, the following conditions must be met:
The company should not reside in a country/region that has implemented GCC value-added tax.
b. The required tax should not be related to goods or services for which the tax cannot be recovered.
The corporate value-added tax refund program has been explained in detail in our article “Corporate Value-Added Tax Refund Program”.
This refund program is applicable to UAE tourists who do not live in any GCC VAT implementing country. These tourists will be eligible to claim a refund of the VAT paid when shopping in the UAE. To be eligible for this program, the following conditions must be met:
Visitors should plan to leave the UAE within 90 days of purchase.
b. Visitors should not be crew members on flights or aircraft leaving the country where VAT is applied (that is, the current Kingdom of Saudi Arabia).
The tourist refund plan has been explained in detail in our article “Guest Refund Plan”.
4. Foreign governments, diplomatic institutions and missions, and certain international organizations
The plan is applicable to foreign governments, diplomatic agencies and missions, and certain international organizations. According to the plan, the taxes incurred by such persons purchasing goods from the UAE will be returned to them. Some conditions to be met by this scheme are:
One kind. The purchase of goods and services shall be for official use only.
b. Countries that have established relevant foreign governments, international organizations, diplomatic institutions or missions or countries with official seats have similar plans and similar entities that exclude any taxation from the UAE.
Therefore, various refund programs initiated by the UAE government encourage relevant personnel to purchase goods from the UAE without incurring value-added tax.