How Can Foreign Businesses Claim VAT Refunds in UAE?

The UAE is a global business hub that introduced a 5% VAT starting January 2018. In the case of non-resident businesses in the UAE, there is a potential refund of VAT by the FTA to improve their cash flow and decrease costs. If you collaborate with the IMC Group, rest assured that you will obtain comprehensive VAT advisory services.

But, applying for VAT refunds is an essential process when trying to start a business in Dubai. So, let's learn how your business can apply for a refund with the required documents and boost overall profitability.

VAT Refunds Eligibility in UAE

First, check if your business qualifies before filing for a VAT refund. You can use VAT services in Dubai from reliable companies like IMC Group to make the process hassle-free and simpler. However, there are just a few things that constitute a foreign business eligible for a tax refund: Your Business must-

Not be VAT registered in UAE

Not carry any business activity within the UAE

Be registered as a business in your country of origin

Have paid VAT at an amount greater than AED 2,000

Only charge VAT on recoverable expenses, not entertainment, etc. Be based in one of the countries listed below.

Businesses set up in the following countries have added conditions to qualify for refunds:

Lebanon: Qualified, with some exceptions

Namibia: Claim Refund Only on Exported Goods, Not on Consumption of Services in UAE

South Africa: Refund only for the goods exported within 90 days of leaving UAE port

Required Documents and Form for VAT Refunds in UAE

The claim for a VAT refund should be submitted in the form of original hard copies with attestation. The following things you need for a tax refund claim.

A certificate of tax residency, such as a business status certificate or its equivalent, issued from the relevant country's tax authority, in Arabic or English. This should include your TRN and be attested by the UAE Embassy where possible.

Tax invoices need to show the TRN of the supplier.

Proof of payment - this needs to be on a receipt or an invoice with a stamp showing details of the supplier.

Proof of the applicant's authorization, such as by power of attorney

A self-declaration in Arabic or English language that must include the percentage of input tax recovery eligibility in case the foreign business undertakes exempt or non-business activities in its home country that do not allow for full input tax recovery.

The original tax compliance certificate and invoices need to be submitted along with a duly completed online refund form. Scanned copies can also be forwarded via email to the FTA within size limits.

The VAT Refund Process- Important Steps

The VAT refund process in Dubai is easy. But, if you find the VAT refund process complicated, you can simply turn to VAT consultancy services in UAE. A reliable provider is IMC Group which ensures businesses stay equipped with every VAT-related compliance and accounting procedures. However, now, let's see how you can claim the refund process.

Log into the e-Services dashboard for registration as a taxable person.

Under "VAT," click on "Business Visitor Refunds" to get the form.

Fill in the form with the applicant's details and the amount of refund. Attach all supporting documents.

Save the draft and review the information before submitting it.

Click the "Submit" form; it will appear as "Pending, and an email will be sent with a reference number.

Send the original documents along with a printed form to FTA within one month.

FTA will take 4 months to process your application and send an email notification.

If a resubmission is required, update it and submit it through the dashboard.

Conclusion

The refundable VAT claiming process in the UAE can become very tiring. With the help of the above steps, a foreign business will be able to claim refundable VAT. They will help your business easily meet the VAT requirements