PROCEDURE FOR VAT REFUND IN DUBAI – FOREIGN BUSINESSES

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The 6 months deadline for VAT Refund for Foreign businesses is expiring on 1 October 2019. The refund scheme for the calendar year 2018 started from 2 April 2019. For the calendar year 2019, the refund scheme will start from 1 March 2020 and will last till 31 August 2020. As a special exception, the above timeline does not apply to foreign businesses registered in GCC countries. Foreign Businesses must assess whether they fall under the criteria, and if they do, they can submit an application to the Federal Tax Authority (FTA) on a special form to claim a refund for any business-related UAE VAT incurred in the relevant periods. The FTA has defined the following criteria (among other parameters) for a foreign business to qualify for this scheme:
  1. No Place of Establishment or Fixed Establishment in the UAE
  2. Not a taxable person in the UAE
  3. Not carrying out business in the UAE (unless the customer applies RCM)
  4. Must be carrying on a business and registered for VAT in a foreign jurisdiction
  5. Minimum VAT amount claimable is AED 2,000
Some of the conditions where VAT is not refundable to foreign businesses are as follows:
  1. Input Tax is not recoverable as per FTA laws (e.g. non-business expenses)
  2. Foreign business is from a jurisdiction which does not provide similar refunds (except for GCC registered businesses)
  3. Non-Resident Tour Operators
Below are the list of countries where businesses may be eligible for this refund:
  • Austria
  • Bahrain
  • Belgium
  • Denmark
  • Finland
  • France
  • Kuwait
  • Iceland
  • Isle of Man
  • Lebanon – in certain circumstances
  • Luxembourg
  • Namibia – refunds only available for business goods that are exported and not for services consumed in the UAE.
  • Netherlands
  • New Zealand
  • Norway
  • Oman
  • Qatar
  • Saudi Arabia
  • South Africa – refunds only available for expenses relating to goods that are exported from a designated UAE port within 90 days and does not apply to services.
  • Sweden
  • UK
  • Zimbabwe
  • Switzerland
Affiniax Partners has a team of VAT specialists in the region who can assist you through the process. For more information, please contact us at mail@affiniax.com

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