How to claim a VAT refund in UAE?
Value-added tax (VAT) is an indirect tax applied at the moment of sale. A company pays VAT to its direct customer and then to the governing body of the nation in which it is incorporated.
Why? Since the government pays for it.
A company uses the taxes it gets from its clients to pay the government. As a result, the government reimburses it for the tax it pays to suppliers.
The national taxation systems of the UAE provide VAT refunds to tourists. This is in addition to enterprises. The VAT refund is up to 85% of the total amount paid in VAT.
So, you may be thinking of how to claim a VAT refund in UAE.
Let’s look at the steps for a VAT refund!
What is a VAT Refund?
When input tax exceeds output tax for a particular taxation duration, you can request a VAT refund. You must complete it when the VAT refund is due or after the VAT return has been filed.
The FTA has up to 20 working days from the date of filing to assess and address a taxpayer’s application for a VAT refund. The taxpayers are sent confirmation of the FTA’s acceptance or rejection of the request. If the FTA needs longer than twenty days, the taxpayer will be informed of the deadline adjustment.
Also read: Step-by-Step Guide to VAT Registration Process for UAE Companies. Here
Form for VAT Refund
A form for VAT refund includes specific details such as:
1. TRN (Tax Registration Number)
This field is already filled based on the data in a taxpayer’s account on the User Profile tab. However, it is essential to check if the right TRN has been entered.
2. Excess refundable tax amount (AED)
The calculation of excess refundable tax amount fills this field,
Excess Refundable Tax Amount (AED) = Refunds – Penalties
This covers all administrative penalties owed (except for the registration failure penalty), and reimbursements included in all previously filed VAT returns.
3. Remaining sum of eligible extra refundable tax
This area already contains the sum of refundable tax that you can claim later.
4. The amount (in AED) that you would like reimbursed
The entire sum of additional refundable tax that is shown in the field must match or be lesser than the sum that you enter.
5. Registration failure penalty amount
According to the fines assessed against you and the likelihood that you have paid the penalty amount, the following field is already filled:
- The field will show Zero (AED) if you are penalty-free.
- If you have been issued a penalty and have cleared it, the field will show Zero (AED).
- The field will show the penalty sum if you have been charged a penalty but have not paid the full amount when you request this refund.
- After the penalty sum is subtracted,
- Your application will be immediately refused if the refund amount is negative.
- If the amount being refunded is positive, only the remaining cash will be sent to the FTA to initiate a refund claim.
6. Authorization and Declaration
The technology automatically fills in the authorized signatory in Arabic and English. Before you click “Yes” to send the form, validate that you have read the privacy statement in all its details.
How to Claim VAT Refund In UAE
You may follow the following steps to claim a VAT refund in UAE.
Step 1: Login
Enter your login information (username and password) to access the FTA e-Services Portal.
Step 2: Viewing the VAT refund form
To view the VAT refund form, select the “VAT” tab and then the “VAT Refunds” tab.
Step 3: Obtaining VAT refund form
Click the “VAT Refund Request” button to obtain the refund form.
Step 4: Enter Details
Please complete the essential information shown in the form.
Consider this: When the form is submitted, fields indicated with an asterisk (*) must be filled in. The VAT portal also instantly generates a few fields.
Step 5: Submission
Click “Submit” after filling out the form.
Step 6: Status of Application
When you finish the form, the FTA will email you to let you know the status of your refund application. The reimbursement will be executed within five working days after the claim is authorized.
Step 7: Verification
You can confirm the amount of your VAT refund by examining your balance using the My Payment tab located under the Transaction History part of the e-Services portal.
Please Read: Types of VAT and VAT Registration Criteria for Different Business Types. Here
Final Thoughts
Whether you’re in Dubai or another region of the UAE, you have numerous challenges to manage to run a flourishing company. You must be confident that your company complies with tax laws.
Business owners must know the advantages of voluntary VAT registration in the UAE and the appropriate timing for registration. Likewise, VAT refund in the UAE is a seemingly simple but complex process.
Paci.ai can help you with tax deductions that may have been neglected. Our VAT consultants are competent in handling VAT refunds in UAE for companies of all shapes and sizes.
Connect with us now, for getting insights on VAT registration process and VAT refund in UAE.
