In this article we discussed about the business VAT refund scheme under VAT in UAE. The VAT refund scheme is very important for the business because it gives a lot of benefits to their business which are run in UAE.
The Federal Tax Authority (FTA) in UAE has introduced a VAT Refund scheme for businesses visitors to claim VAT refund paid on expenses incurred in UAE.
BUSINESS VAT REFUND SCHEME IN UAE:
In UAE, business VAT refund scheme are allowed foreign business to claim a refund on the VAT paid on expenses incurred in UAE, after fulfillment the required conditions.
ELIGIBILITY OF FOREIGN BUSINESS TO CLAIM REFUND:
If any foreign business want to claim a refund of VAT must met the following conditions are as follows:
- The business is resident in a GCC State that has not implemented VAT: Any person or business who is a resident in UAE even he has not implemented VAT is eligible for business VAT refund scheme.
- Foreign business in a country outside of the GCC: Must fulfill the following condition to eligible for the business VAT refund scheme;
- A) The foreign businesses should be registered where it is established or situated with the authority in its territory.
- B) Any foreign business should not have any place of establishment in UAE or any state which has currently implemented VAT.
- C) A registered or taxable person under VAT in UAE or obligated to get registered not eligible to claim VAT under the business VAT refund scheme.
- D) It is essential that the foreign business should be from a country which provides refund of VAT to UAE entities in similar circumstances.
NOTE: The VAT claimed only on those goods and services for which tax is recoverable. Under VAT in UAE, some goods and services are lies under the categories on which input tax are not recoverable.
BUSINESS NOT ELIGIBLE FOR VAT REFUND SCHEME:
A person who is a foreign tour operator is not eligible to get claim VAT Refund under the business VAT refund scheme.