How to Claim VAT Refund in the UAE?

Introduction:  Understanding VAT in the UAE

The UAE introduced Value Added Tax (VAT) in 2018 to diversify its revenue sources.  This tax applies to most goods and services at a standard rate of 5%.  While businesses must comply with VAT regulations, tourists can benefit from VAT refunds on eligible purchases.  Understanding the VAT refund process is crucial for both businesses and visitors to maximize savings and ensure compliance.

What is VAT Registration in the UAE?

VAT registration is the process through which businesses become eligible to charge VAT on sales and reclaim VAT paid on expenses.

Mandatory VAT Registration

Businesses must register for VAT if their taxable turnover exceeds AED 375,000 in a 12-month period.

Voluntary VAT Registration

Companies with taxable supplies and imports exceeding AED 187,500 can opt for voluntary registration, allowing them to reclaim VAT on business expenses.

Understanding VAT Refunds in the UAE

VAT refunds are not automatic; businesses and tourists must meet specific criteria to qualify.

Input VAT vs. Output VAT

• Input VAT:  The VAT paid on business purchases.
• Output VAT:  The VAT collected from customers.  If a business’s input VAT exceeds output VAT, it can claim a refund for the difference.

Who Can Claim VAT Refunds?

For Businesses

To qualify for VAT refunds, businesses must:

• Be registered with the Federal Tax Authority (FTA).
• Have input VAT exceeding output VAT in a tax period.
• Not provide exempt supplies (e.g., certain financial or educational services).

For Tourists

Tourists can claim VAT refunds on purchases made from retailers enrolled in the Tax Refund for Tourists Scheme.  Refund eligibility depends on:

• Minimum spend requirements.
• Eligible product categories.
• Verification of receipts at airport kiosks before departure.

Documents Needed for VAT Refund Claims

For Businesses

• VAT Return (Form 201) – Summarizes input and output VAT.
• Tax Invoices – Proof of VAT paid on purchases.
• Import/Export Documents – Required for cross-border transactions.

For Tourists

• Receipts from participating retailers.
• Passport and boarding pass.
• Authenticated tax refund receipt.

How to Claim VAT Refunds in the UAE

For Businesses

1. Submit VAT Return (Form 201) via the FTA Portal.
2. Complete VAT Refund Application (Form VAT311).
3. Prepare supporting documents (invoices, import/export records).
4. Submit electronically through the FTA e-Services portal.

For Tourists

1. Shop at participating retailers displaying the Tax Refund for Tourists Scheme logo.
2. Request a VAT refund receipt at the time of purchase.
3. Verify receipts at airport kiosks before departure.
4. Receive refund via approved mediums (cash, credit card, or bank transfer).

FAQs:  Common Questions About VAT Refunds

Q.  How long does it take to receive a VAT refund?

A.  For businesses, the FTA processes refunds within 20 business days.  Tourists receive refunds instantly at airport kiosks.

Q.  Can businesses claim VAT refunds on all expenses?

A.  No, VAT refunds are not applicable on expenses related to exempt supplies or non-business-related purchases.

Q.  What happens if a VAT refund claim is rejected?

A.  Businesses can resubmit claims with corrected documentation.  Tourists must ensure receipts are verified before departure.

Why Choose Beyond Numbers for VAT Refund Services?

Navigating VAT refunds can be complex, but Beyond Numbers simplifies the process with:

• Expert VAT compliance services.
• Hassle-free VAT registration and submission.
• Prompt refund claim processing.
• Complete documentation assistance.
• Strict compliance with UAE VAT regulations.

Conclusion: Get Your VAT Refund Today!

Whether you’re a business seeking VAT recovery or a tourist looking to reclaim VAT on purchases, Beyond Numbers ensures a seamless refund process.  Contact Beyond Numbers today for expert VAT refund assistance!