What is VAT & How do I Claim a VAT Refund in UAE?
This is an indirect sales tax paid on products at different stages of the supply chain based on value-added on goods and included in the end consumer's price. Each taxable business in the United Arab Emirates has to do VAT compliance levied by FTA regulations. Value Added Tax compliance includes VAT invoicing, VAT registration, VAT return filing, VAT VAT refund submission, voluntary disclosure, VAT de-registration, and VAT audit services.
VAT Refund in UAE
Businesses can claim a VAT refund when the input tax is greater than the output tax after completing their VAT return filling or at any later stage if a VAT credit is due to them. The repayment of value-added tax in the UAE is governed by terms and conditions stated by the Federal Tax Authority (FTA). The authority deliberately issued conditions for taxable companies in UAE to apply for a VAT refund. In this guideline, you get to know about eligibility criteria, documents and information requirements for VAT refund application, and different other particulars for VAT refund in UAE. Let’s dig deep into it:
Purpose of the VAT Refund in Dubai
One of the main purposes of VAT refund laws is to balance retail spending and services. In the current economic environment of the UAE, businesses are now claiming VAT refunds, which help to stabilize and manage their cash flows.
Time Frame for VAT Refund by FTA
Several tax regulatory procedures have been established by the FTA, including a time limit for claiming a VAT refund in the UAE. You will receive a response within 20 business days after submitting the Refund Form. After the FTA receives your application, an email will be sent to you. Once your claim is approved, you will receive your refund within 5 business days.
Process of Claiming VAT Refund in UAE
The VAT refund application is submitted electronically. Below are some important guidelines for the process:
- First of all, login to the FTA Official Website and hit on the ‘VAT Refund Request’
- Then, taxable persons enter basic information and bank account detail of the applicant into the dashboard.
- The most crucial is to ensure which bank account details are accurate and the same as those mentioned in the registration form, otherwise the application will be rejected.
- After this, add the current amount of excess refundable tax and the amount you desire to refund.
- Fill in the separate column for the VAT penalty.
- Upload required documents and agree to declarations.
- Finally, you can submit the VAT refund form.
- You may also check your balance, after receiving a confirmation email.
Requirements for VAT Refunds Official Form
The fields are pre-populated based on the taxpayer information mentioned in VAT registration. To be on the safe side, it’s better to verify all the details to avoid any potential error. The VAT refund form contains the following:
- Tax Registration Number (TRN)
- The total amount of Excess Refundable Tax (AED)
- The amount you want to refund (AED)
- The remaining amount of eligible Excess Refund
- Penalty for late registration (AED)
- Authorized Signatory and Declaration
Is there a Way to Avoid Errors when Applying for a VAT Refund?
VAT refund regulations are well organized by the Federal Tax Authority (FTA), but still, businesses make minor mistakes in the application such as errors in invoicing, inaccurate basic information, and bank account details. Then, they have to face critical problems in the form of VAT refund rejection or unnecessary delays by the relevant authorities. The only solution left is to resubmit the application and related information but it wastes a lot of time.
To avoid these potential errors in the VAT refund application a business owner must take services from the top VAT consultants in Dubai. Their expert opinion easily gets you out of these complicated tasks of claiming value-added tax repayment. Bestax Chartered Accountants is one of the leading VAT advisors in the UAE, that commits to recovering VAT refund amounts as soon as possible. Appointing VAT consultants provides you following facilities such as:
- Assure your eligibility criteria for the VAT Refund application.
- Prepare and review the necessary documentation.
- Assess the application for the certificate of entitlement (In case of Expo-2020 VAT Refund applications)
- Follow the proper format as per FTA requirements.
- Submission of VAT Refund application.
- Assure the accuracy and completeness of the application.
- Assist you until the approval of VAT refund by FTA.
- Follow-up till you credit the refunded amount from the bank.
I hope all these guidelines clear your doubts and assist your business in claiming a VAT refund in the UAE as per the FTA legislation.