Federal Tax Authority issues guidelines for foreign businesses' VAT refunds

Business visitors qualify for refunds if four conditions are met

The authority said that VAT refund claims for 2018 can be made in April, while for subsequent years the date falls in March. Getty

The UAE Federal Tax Authority issued guidelines that allow foreign businesses to get VAT refunds provided four conditions are met as the regulator continues to publish and clarify tax clauses.

“The first condition is that foreign businesses must not have a place of establishment or fixed establishment in the UAE or in any of the VAT-Implementing GCC States,” the authority said on Saturday in a statement.

“Second, such foreign businesses must not be a taxable person in the UAE. Third, they must also be registered as an establishment with a competent authority in the jurisdiction in which they are established; and finally, the fourth condition is that they must be from a country that implements VAT and that equally provides VAT refunds to UAE businesses in similar circumstances.”

___________

Read more:

Taxpayers in UAE and Saudi Arabia: get ready for official tax audits in 2019

Three down, three to go in the GCC as Bahrain set to roll out VAT

Bahrain parliament approves draft VAT law

Clarifications on VAT need clarifying

___________

The UAE is implementing 5 per cent VAT to diversify and create new revenue streams as part of its plan to lessen its dependence on oil revenues. The International Monetary Fund estimates the introduction of VAT in the Arabian Gulf region could generate between 1.5 to 3 per cent of non-oil GDP in new revenue.

The federal authority said refund claims for 2018 can be made in April, and in March for subsequent years.

The minimum amount of each VAT refund application submitted by business visitors is Dh2,000. It may consist of a single or multiple purchases and applicants should keep the original tax invoices in order to reclaim the VAT.

Khalid Al Bustani, the director general of the FTA, said the refunds will help support several economic sectors including tourism, trade, exhibitions and conference among others.