The refund scheme for the calendar year started from March 2020, for any foreign business. The foreign company must assess whether they fall under the criteria. If they do, they can submit an application to the FTA on a claim form for any foreign business-related UAE VAT incurred in the relevant periods before the set deadline by the FTA.
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Essential Qualification of Foreign Business for UAE VAT
To obtain a refund for a foreign business, the following qualifications should be considered before applying:
- No place of establishment or fixed establishment in the UAE should be there for the company.
- Not a taxable person in the UAE
- Not carrying out business in the UAE
- Must be continuing a business and registered for VAT in a foreign jurisdiction
The following are the list of counties where business may be eligible for this VAT refund in UAE:
- Isle of Man
From those mentioned above if your country is not in the list, then you can approach to a consultant with a regulated tax agent in UAE to aid for processing the said procedures for VAT Refund.
Details required for UAE VAT Refund Applications?
Tax Period Duration: Any business which qualifies for the said UAE VAT can forward a claim application. The tax period of each refund claim shall be a calendar year. Also, it’s not possible to forward the old refunds if any, along with the current claim application.
Minimum Amounts: A minimum VAT amount claimable as per the refund application is Dhs2,000 for each application.
Documentation: During the submission, we must ensure that the claim applicant provides the original hard copies of all invoices with proof payment, certificate of incorporation/registration along with the Tax registration or equivalent attested hard copy re required to be sent along with the application. The following details must be there in the said invoices along with the submission:
- Date of issue of receipt
- Invoice number
- Address and name of the purchaser
- Price of goods
- Amount or Quality of the goods
- Nature of description of the items
- TRN or tax registration number of the supplier
- VAT Amount
- Name and Address of the supplier
Above all, the application for VAT refund involves diesel oil and petrol that is part of the purchase at any petrol station. A bank statement can also be submitted for individual purchase because the receipt or bill may state the registration number of the vehicle instead of the address name of the business.
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Certificate: A certificate will be issued by any competent authority in the said category. If the certificate has been issued earlier than a calendar year, then there is a need to provide a new certificate. Also, if you are applying for the first time then the company has to be submit all the documents as a fresher as per the stipulated rules and regulations.
Due to late returns or incorrect information while refund Federal Tax Authority (FTA) in UAE has all power to reject the application or withhold application or penalize the applicant. Also, where the VAT has refunded unlawfully, the claimed amount will be taken back in line with applicable UAE provisions and the authorities can also penalize this.
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