There are many foreign unregistered companies that visit UAE temporarily to do business legally under certain circumstances. Businesses have to pay taxes as Value Added Tax or VAT in the UAE so as to keep law and order of taxation practices regulated in the country against serving quality products and services to the public.
What is the Purpose of VAT Refund Application for Foreign Businesses in UAE?
In order to facilitate and encourage these unregistered foreign businesses, Federal Tax Authority in UAE has introduced a special category of VAT refund in Dubai. A foreign company may occasionally be eligible to receive a UAE VAT refund for taxes already paid. This refund form is intended to make it easier for business visitors who qualify for a refund to get amount paid in the name of VAT, reimbursed.
In this article we will discuss the details about how FTA refunds VAT to these visiting unregistered foreigner businesses in UAE and under what conditions do they qualify for it.
Who Can Claim a Refund for VAT in the UAE as an Unregistered Foreigner Business?
There are certain conditions issued by the Federal Tax Authority in UAE that define the eligibility criteria of Foreign Businesses for UAE VAT refund. Visiting unregistered businesses meeting the following conditions are qualified for VAT refund in Dubai:
- Foreign businesses in the UAE have no fixed or established place in the UAE which means the place where crucial and significant decisions related with business operations are taken.
- Foreign businesses are not established in an implementing state which refers to the GCC states that implement a unified VAT law completely followed by the states according to the provisions of the GCC agreement.
- The Foreign business owner is not a taxable person in the UAE under the provisions of the VAT law.
- Foreign businesses are not carried on in UAE which means any routine, ongoing, and independent activity carried out by them in any location that involves the use of tangible or intangible property, including industrial, commercial, agricultural, professional, or service operations.
- They operate a business and are listed as an establishment with the local government where they are located by a competent authority.
- This VAT refund in Dubai cannot be used by foreign government entities to recoup VAT paid in the UAE.
What Are the Circumstances Under Which FTA Refunds Vat to Foreigner Businesses in UAE?
Submitting an application for refunding VAT in the UAE and its administration can be burdening and to improve the challenge, there are certain conditions which define a few requirements from the unregistered visiting businesses. These requirements are:
- Each Refund claim shall cover a period of 12 calendar months, with the exception of Applicants residing in the GCC States who are not one of the Implementing States.
- AED 2,000 is the minimum amount of VAT for which a claim may be made under this VAT refund arrangement.
What Are the Documents Required for VAT Refunds for Visiting and Unregistered Businesses in UAE?
To start the application for UAE VAT refund for Foreign Businesses, there is a list of necessary documents that the business must have prepared beforehand. These documents are:
- Original Tax Compliance Certificate that could be a business status certificate, a certificate of commercial activities, or an equivalent, drafted in Arabic or English, This certificate must be issued by a Tax Administration entity and containing the applicant’s Tax Registration Number (TRN), authenticated by the UAE Embassy in the country where the tax registration is made.
- Verified proof of signatory’s authority.
- Proof of payment documentation, such as a stamped invoice that says “paid” and includes the supplier’s necessary information.
- Authorized signatory’s original Passport with its copy.
- If the foreign business is engaging in exempt or non-business activities in the country of establishment that do not grant the right to fully recover any input tax, a document stating a legitimate declaration in Arabic or English indicating the level (percentage) of input tax the applicant is eligible to recover on expenses must be provided.
Can a Foreign Business Submit for VAT Refund in UAE for Multiple Years in One Application?
The request for UAE VAT refund by Foreign Unregistered Businesses cannot be submitted for multiple years in a single application. According to the Federal Tax Authority’s rules and regulations of VAT Refund for Visiting Unregistered Foreigner Businesses, the applicant may only submit a single application for one calendar year. However, a Visiting Unregistered Foreigner Business may apply for a VAT refund in Dubai for more than one year’s fiscal cycle in multiple applications through the e-Service portal on the Federal Tax Authority’s official website.
Need Assistance with VAT Refund Services in UAE?
VAT REGISTRATION UAE is one of the most trusted companies in the UAE by all kinds of businesses such as industrial, e-commerce, food, agricultural etc. We have a diligent team of expert tax consultants and legal advisors who thoughtfully facilitate businesses with taxation and financial guidance in UAE. If you need more assistance on VAT refund in Dubai as a Visiting Unregistered Foreigner Business, call us now or visit our website www.vatregistrationuae.com now.