VAT refunds are complex and complicated in nature. Calculating your input and output VAT calculations and quarterly submissions to the tax authorities can take time and effort. Outsourcing tax consultants who can help with accounting for a VAT refund can be a big relief for you. In the UAE, all registered businesses should file a VAT refund that includes all the details of purchases, sales, output and input VAT during the tax period. Let us see this process in detail.
What Is Output And Input VAT?
In simple words, input VAT is the amount paid to the supplier towards purchases or expenses, while output VAT is the amount collected on sales. If the output VAT is higher than the input VAT on the VAT return, the balance is considered to be VAT payable which the taxpayer has to pay. If the input tax is greater than the output tax on the VAT return, then the taxpayer is eligible for a VAT refund and can apply for the same.
VAT Refund Form
A VAT refund form in UAE contains some fields that will be prefilled based on your profile. These include the following:
- TRN (Tax Registration Number), which has to be verified before submitting.
- Total amount of Excess Refundable Tax, which is the list of refunds reported in all previously submitted VAT returns and all administration penalties due, except the late registration penalty.
- The remaining amount of eligible Excess Refundable Tax, which is the amount of refundable tax that you can apply for in the future.
- Late registration penalty amount, which will be based on penalties imposed upon you and on whether you have settled the amount or not.
- An authorized signatory and declaration which should be read thoroughly before form submission.
Apart from this, there will be a field where you will have to put the amount you wish to have refunded, which has to be equal to or less than the amount displayed in the Total amount of Excess Refundable TAx field.
How To Claim FTA VAT Refund in UAE?
To submit a VAT refund claim in UAE, you must first log in to the FTA’s e-services portal, go to the VAT tab > refunds tab, and access the form by clicking the VAT refund request. Ensure that the details you have entered are correct and click on ‘Submit,’ after which you will receive an email from the FTA to notify the result of your application within 20 business days. If approved, the refund will be processed within five business days.
How Can Accounting Services Help?
Many agencies offer various services across a wide range of finance-related issues. Hiring a professional accountancy service firm can be extremely beneficial for dealing with bookkeeping, tax, and VAT returns. This allows you to take advantage of their expertise and experience with accounting for a VAT refund.
Accounting services can help you apply for a VAT refund and also take care of other important factors like emirates wise reporting, categorization of supplies, adjustments to goods imported into the UAE, identifying non-claimable and claimable input VAT, and much more. Since they are experts in the domain, they know each of these aspects that help you to avoid errors and non-compliance.