If you are traveling to the UAE for business purposes, such as attending a conference, exhibition, or conducting other business-related activities, your company may qualify to reclaim Value Added Tax (VAT) on its business expenses. This service is provided by the Federal Tax Authority (FTA), allowing foreign businesses to utilize the ‘Business Visitor Refund Scheme’ to seek VAT refunds. This can help in cutting costs and minimizing overall business expenses during your time in the UAE. It is important to maintain a record of all business-related purchases made in the country and retain the original receipts, as these documents will be necessary when applying for the refund.
Who can apply for a VAT refund?
To be eligible for a Value Added Tax (VAT) refund under the Federal Tax Authority (FTA), foreign businesses must satisfy the following criteria:
– They must not have a physical presence in the UAE or any other GCC state.
– They should not be registered for tax purposes in the UAE.
– They must not be engaged in any active business activities in the UAE.
– They must be officially registered as a business in their home country.
– They must be located in a country that has a reciprocal VAT agreement with the UAE’s Ministry of Finance (MOF) (listed below).
It is important to note that Gulf Cooperation Council (GCC) states are only considered ‘implementing states’ if they recognize the UAE as such under their own VAT laws. Businesses established in non-implementing GCC states can still apply for refunds through this scheme.
Refunds are not available if:
– The foreign business offers goods or services within the UAE.
– The VAT paid cannot be reclaimed under UAE VAT regulations, such as VAT on personal vehicles or entertainment expenses.
– The company is located in a country that does not provide VAT refunds to UAE businesses.
– The business functions as a non-resident tour operator.
The foreign business operates within the UAE, providing goods and services to customers. However, any VAT paid on expenses such as personal vehicles or entertainment cannot be recovered under UAE VAT laws. Additionally, the company is based in a country that does not offer reciprocal VAT refunds to UAE businesses. This business model operates as a non-resident tour operator, catering to tourists and visitors in the region.
Countries with reciprocal VAT refund agreements
The UAE’s MOF has agreements with the following countries:
- Austria
• Bahrain
• Belgium
• Denmark
• Finland
• France
• Germany
• Iceland
• Isle of Man
• Korea
• Kuwait
• Lebanon
• Luxembourg
• Namibia
• Netherlands
• New Zealand
• Norway
• Oman
• Qatar
• Saudi Arabia
• South Africa
• Sweden
• Switzerland
• UK
• Zimbabwe
As per the Free Trade Agreement (FTA), if your country is not included in the list or does not operate under a Value Added Tax (VAT) system, it is advisable to reach out to your national Ministry of Finance. They have the authority to engage in negotiations with the United Arab Emirates (UAE) to establish an agreement.
When can you apply for a refund?
To simplify the process, VAT refund claims are submitted on an annual basis:
– Refund period: Each claim should encompass 12 months (calendar year), with allowances made for businesses in non-implementing GCC states.
– Minimum claim amount: VAT claims must be a minimum of Dh2,000.
Documents for VAT refund applications
When submitting your application, please ensure you include the following documents:
- A declaration in Arabic or English indicating the percentage of VAT that is recoverable.
• Tax invoices with a valid tax registration number and proof of payment.
• Bank details including IBAN, bank name, branch, country, account number, and SWIFT code.
• A copy of the passport of the authorized signatory.
• Evidence of the authorized signatory’s authorization.
Invoices may be original hard copies or system-generated copies, as long as they show proof of payment. Alternatively, scanned copies can be sent via email to ForeignBusiness@tax.gov.ae (with a 20MB limit per email).
Applying for a VAT refund
There are two ways to apply for a VAT refund under the Business Visitor Refund Scheme:
1. Online application
Here is a concise overview of the process:
To begin, access the FTA’s e-Services platform at eservices.tax.gov.ae and log in using your UAE Pass account or create an FTA account. You will need to provide your email, full name, nationality, and create a password.
After completing the initial steps, you must add yourself as a ‘taxable person account’.
Navigate to the VAT section on the dashboard and select the ‘Business Visitor Refunds’ application form to initiate the VAT refund process for foreign businesses.
Complete the application form, following the step-by-step instructions and providing the necessary supporting documents.
Upon receiving all required original documents, the FTA will process the refund request within four months.
Submitting required documents
– To submit hard copies, please send them to the Federal Tax Authority at P.O. Box 2440, Dubai.
– For electronic submissions, scan the documents and email them to ForeignBusiness@tax.gov.ae. Please ensure that you include your company name and claim reference in the subject line of the email.
2. Using a UAE tax specialist:
This option offers greater convenience, but it does come with a fee. By enlisting the help of a specialist, you can rest assured that all requirements will be met, minimizing the risk of any potential delays. Consultants are able to assist with tasks such as document attestation and submitting hard copies of receipts, ensuring that everything is handled correctly. For a list of registered tax agents, please visit: https://tax.gov.ae/en/tax.support/tax.agents/registered.tax.agents.aspx.
When should you submit your application?
Refund claims are submitted annually. The application period begins on March 1st of each year and covers expenses incurred during the previous calendar year. For instance, expenses from January 1st to December 31st, 2024, can be claimed starting on March 1st, 2025. It is crucial to submit your claim by the final deadline of August 31st each year to guarantee timely processing.
Also Read: Shopping in the UAE? You can get a VAT refund without a receipt by following these steps
