The UAE introduced Value Added Tax (VAT) in January 2018, impacting both businesses and consumers. For business visitors—foreign entities without a permanent presence in the UAE—understanding VAT can be challenging, especially when reclaiming VAT on expenses incurred during business activities. This guide simplifies the process, outlining who can claim a VAT refund, the conditions that apply, and how to navigate the application process successfully.

Who Can Claim a VAT Refund?

To qualify for a VAT refund as a business visitor, you must meet specific eligibility criteria set by the UAE’s Federal Tax Authority (FTA). Only foreign businesses without a place of establishment in the UAE or an Implementing State can apply. Additionally, the business must not be registered as a taxable person in the UAE and should not be conducting business activities within the country.

Eligibility Criteria

• No Establishment in UAE or Implementing State: The foreign business must have no physical or fixed establishment in the UAE or any state implementing a VAT law under GCC agreements.
• Non-Taxable in UAE: The entity should not be a taxable person in the UAE.
• Not Conducting Business in UAE: The business should not engage in ongoing or regular business activities within the UAE.
• Registered as a Business: The entity must be recognized and registered as an establishment with a competent authority in its home country.

Who Cannot Claim a VAT Refund?

• Foreign Government Entities: These entities cannot use this form to reclaim VAT.
• Non-Resident Tour Operators: They are ineligible for VAT refunds.
• Businesses from Non-Reciprocal Countries: Businesses from countries that do not offer reciprocal VAT refunds to UAE entities cannot claim a refund.

Circumstances in Which You Can Claim a Refund

To reduce the administrative burden, the FTA requires that each refund claim covers a 12-month calendar period, and the minimum amount for each claim must be AED 2,000. Refunds are only available for expenses directly related to business activities, excluding non-recoverable expenses like entertainment or motor vehicles intended for personal use.

Required Information and Documents

Before initiating the refund process, ensure you have the following documents ready:

• Tax Compliance Certificate: A certificate indicating your business status, issued by the competent tax administration in your country and attested by the UAE Embassy.
• Tax Invoices with Proof of Payment: Invoices must include a valid tax registration number (TRN) and proof of payment. Invalid invoices, such as those missing a TRN or with incorrect details, will be rejected.
• Authorized Signatory Documentation: Include a copy of the passport of the authorized signatory and proof of their authority, such as a power of attorney.
• Submitting Original Documents: Send the original hard copies of all invoices with proof of payment to the FTA. Scanned or system-generated invoices are accepted but must include proof of payment, with the company name and claim reference number reflected in the email subject.

Step-by-Step Guide to Accessing and Completing the Refund Form

Step 1: Creating an e-Services Account

1. Visit the FTA website and click on the ‘Sign up’ button.
2. Provide a working email address, create a password, and verify your email address.
3. Follow the link sent to your email to verify your account within 24 hours.

Step 2: Creating a Taxable Person Account

1. Navigate to the Online User Dashboard and click on ‘Add New Taxable Person.’
2. Enter the legal name of the entity in English and Arabic, then click ‘Create Taxable Person.’

Step 3: Accessing the Refund Form

1. Log into your e-Services account and go to the VAT section.
2. Click on ‘Business Visitor Refunds’ to access the Refund Requests dashboard.

Step 4: Completing the Refund Form

1. Fill out all mandatory fields marked with a red asterisk (*).
2. Attach scanned copies of the required certificates and invoices.
3. Save your progress regularly to avoid data loss.

Submission Process and Timeline

Submitting the Refund Form

• Review All Information: Before submitting the form, review all information for accuracy. Click ‘Submit’ at the bottom of the form.
• Confirmation Email: You will receive a confirmation email from the FTA with your application reference number.

Status Tracking and Response Times

• Draft: Application saved but not submitted.
• Pending: Application has passed validation checks and is awaiting processing.
• Resubmit: Additional information or corrections required.
• Approved: Application accepted; refund will be processed.
• Completed: Refund has been paid out.
• Rejected: Application did not meet requirements or was missing essential information.

Important Deadlines

Claim Period

Each VAT refund claim must cover a complete calendar year.

Opening Date for Refund Applications

Applications open on 1 March of the following year.

Deadline for Submission

Submit refund claims by 31 August each year.

Special Conditions for GCC States

The requirement for a full calendar year claim does not apply to businesses in GCC States not considered Implementing States under UAE VAT legislation.

Common Challenges and How to Overcome Them

Challenges

• Document Submission: Ensuring all required documents are correctly submitted.
• Minimum Claim Amount: Meeting the minimum claim amount of AED 2,000.
• Resubmission Requests: Promptly addressing resubmission requests.

Overcoming Challenges

• Double-Check Requirements: Review document requirements and formats before submission.
• Monitor Communications: Monitor emails for FTA communications.
• Track Application Status: Use the e-Services portal to track the application and respond quickly to any requests.

Important Considerations

• Reciprocal Arrangements: Only businesses from countries with reciprocal VAT refund arrangements are eligible. Check the approved list on the FTA’s website.
• Specific Reliefs and Exceptions: Certain scenarios like exhibitions and conferences may have specific reliefs under Cabinet Decision No. 26 of 2018.
• Bank Account Details: Ensure the bank details provided align with the applicant's registered information.

FAQs

1. Can I claim VAT on all expenses? No, VAT on non-recoverable expenses like entertainment and personal-use vehicles is not refundable.
2. What happens if my application is rejected? If your application is rejected, the FTA will provide reasons for rejection. You may need to resubmit the form with corrections or additional information.
3. How long does it take to receive a refund? The refund process can take up to four months after all documents are received and approved by the FTA. Once approved, the refund will be issued within 10 business days.

Conclusion

Navigating VAT refunds as a business visitor in the UAE requires attention to detail and adherence to eligibility criteria. By following this guide and ensuring all documents are correctly submitted, you can manage your VAT refund claim efficiently. Remember, meticulousness and adherence to deadlines are key to a successful application.