VAT Refund in UAE

In case the Input VAT on a tax return exceeds the Output VAT, taxpayers are eligible to apply for a refund. Input VAT refers to the tax paid on goods and services procured by a business or taxable person in the United Arab Emirates (UAE), while Output VAT pertains to the tax collected on items sold by businesses or taxable individuals in the UAE.

Eligibility criteria for obtaining VAT refunds

Eligibility criteria for obtaining VAT refunds are determined based on the following:

Taxable persons or business entities that have paid an excessive amount for VAT.

Tourists or foreign businesses visiting the UAE.

Foreign governments, military bodies, institutions, international organizations, and others that have incurred VAT for any item supplied in the UAE.

When To File for VAT Refund

A VAT-registered business must file a claim for a VAT refund within one calendar year from the end of the calendar year in which qualifying conditions occurred.

Who Can Seek Tax Refunds

Taxable individuals in the UAE can seek tax refunds if they meet any of the following criteria:

Tax payment made by a taxable person or business exceeds the net amount of tax payable.

There is an excess in deductible net VAT per VAT return, and this excess VAT may be carried forward to the following taxation period.

A taxable person has sent a qualified application for VAT deregistration.

How A Refund Is Processed

The Federal Tax Authority (FTA) will adjust the VAT refund against the VAT liability amount. The FTA officials in the UAE will respond to VAT refund applications within sixty days of the date of submission.

It is important to note that necessary documents such as receipts and invoices must be provided. Failure to provide complete or accurate information to the tax authority may result in the rejection of a VAT refund application in the UAE.