In the United Arab Emirates, VAT compliance is considered a range of different activities in a taxable business. This includes VAT registration and deregistration, VAT returns, voluntary VAT disclosures, VAT refund, and many other activities. A registered business pays and collects tax on sales and purchases during a given tax period. Often its input VAT is higher than its output VAT, and the business can then claim a VAT refund. Our Bestax chartered accountants and tax advisors provide excellent VAT refund services in Dubai, Sharjah, Abu Dhabi, Ajman, and other Emirates.
What is a VAT refund?
VAT refunds in the UAE apply when the input tax is less than the output tax during the VAT return filing period. The excess tax is refundable to all registered businesses. The output VAT is the amount charged on sales and input tax is the amount paid to the supplier on purchases. In such circumstances, the taxable person must claim the VAT back from the relevant authorities.
Purpose of the VAT refund
The FTA introduced a system of VAT refund in the UAE on 1 February 2018 in order to stabilize the national economy. VAT refund is a relief for taxpayers to credit the amount of overpaid tax. The law is being introduced to balance retail spending and manage account cash flows.
Entities covered by VAT refunds in the UAE
The FTA defines certain conditions and requirements for taxpayers to claim a VAT refund in the UAE. There are a number of registered entities that are subject to institutional VAT refunds. The following entities:
- Taxable persons
- Foreign companies
- Tourists and visitors
- UAE nationals building new residences
- International organizations, foreign governments, and diplomatic missions
VAT refund period
After submission of the application, the timeframe for the FTA to reply on VAT refunds in the UAE is almost 20 working days. However, if complex VAT refund applications take longer, the FTA will inform the applicant. During this period, the authorities will review and verify all the information provided in the application. Taxpayers are informed by e-mail whether the FTA accepts or rejects their applications. Incorrect information is the most common reason for the delay or rejection of applications. If you choose reputable VAT refund services in Dubai, you have a better chance of receiving your VAT refund without unnecessary delays.
How do I get a VAT refund in the UAE?
If a company pays more tax than it collects from its customers, the taxpayer has two options for dealing with the excess VAT in the UAE.
The first is that the taxpayer can apply for a VAT refund from the UAE regulatory authorities.
If the taxpayer does not wish to claim a VAT refund from the authorities at this time, the excess input tax can be carried forward to future tax periods and applied as a set-off against the tax due or the company can appeal for a VAT refund at any later date.
How can I claim a VAT refund in Dubai?
- The FTA has set up a portal where VAT refund request claims can be submitted together with certain supporting documents and information. The step-by-step process is described below:-First, log in to the FTA e-services portal using your registered email and password.
- Then go to the VAT tab and navigate to the VAT Refund section. The ‘VAT refund request’ is displayed below.
- The VAT refund form is called the “VAT311 form” and you fill in the application form with the correct related information.
- After reviewing the information on the refund form, you can submit your application by clicking the ‘Submit’ button.
The authorities will inform you of the current status of your VAT refund form in the UAE.
If the refund form application is approved, the VAT refund will be processed within 5 working days.
Check your balance under “My Payment” in the “Transaction History” section to verify the refund amount.
Requirements for the VAT311 form
To apply for a VAT refund in Dubai, you need to fill in the following pre-filled application fields. For example:
- Tax Registration Number
- The remaining amount of the eligible overpayment
- The amount you wish to refund (AED)
- The total amount of overpaid tax to be refunded (AED)
- Penalty for late registration (AED)
- Authorized signatory and declaration
What is the Importance of a VAT Refund Service?
A VAT refund service can help you reclaim your VAT when you buy goods from another country.
You have to register for VAT in the country where your business operates. You have to charge VAT on some or all of your invoices in that country, but most of the time, you need to deduct this tax from your receipts. However, this can be difficult for companies, and it can strain their cash flow. In addition, it will reduce your profits and investment returns, and it could even lead to business failure. Furthermore, if you are unable to refund your VAT, you may have to incur large penalties.
It is important to have a valid VAT invoice before you can claim a refund. If your VAT invoice contains errors or omissions, you may not be able to claim a refund.
Get expert VAT refund services and VAT return consultants in Dubai
Businesses operating in the UAE can avoid fines and penalties by ensuring their records are VAT compliant. Bestax chartered accountants and VAT consultants provide a remarkable and guaranteed VAT refund service in Dubai. Our team of tax experts review, verify and calculate your input and output tax whether it is payable or refundable. They ensure that your company’s application package meets FTA standards. Certified consultants help you prepare and submit your VAT refund applications. Our experienced VAT consultants and tax experts in the UAE assist businesses until they receive their VAT refund from the FTA. If you have any questions, please contact us today.