How to Claim VAT Refund For Exports in Dubai, UAE

Refunding VAT on export goods is always a complex affair for any VAT registered business in the UAE. Especially if you do not understand the condition of the refund and how to make a claim. Therefore, if you are a trader in export business in the UAE, this is the article you need to read to know how you can apply for the VAT refund and whether you meet the requirements for that consideration. VAT registration UAE based in Dubai is an audit and tax firm that can assist in claiming for the VAT refunds for export business within the UAE.

Major factors to VAT Refund on Exports in UAE

The major factors related to VAT refund on exports in the UAE have been mentioned below-

1. Zero-Rated VAT for Exports: Exportation of goods and services from the UAE is categorized under “zero-rated” supply under the current UAE VAT law. This means that the value added tax is charged at these zero rates for any export products and companies are able to recover VAT that has been charged on related cost.
2. Eligibility for VAT Refund: Before claiming a VAT refund on exports the business needs to satisfy the conditions stipulated by the Federal Tax Authority (FTA).

• Stock including goods and services that has to be exported in a physical form from the UAE within 90 days from the date of supply.
• The claim is supported by documentary or affirmative evidence including commercial invoices and declarations, proof of transport.

Read also: Expert Tips For A Timely VAT Return Filing In UAE

VAT refunds for exports UAE: Conditions for the recovery of Value Added Tax

VAT refund on exportation in the UAE is based on the characteristics of the exported goods and services as well as the Zero-rated export goods and services. The FTA classifies exports into two main categories:

• Direct Exports: Goods transported directly from the UAE to a destination outside the GCC territory are considered direct exports. These goods qualify for VAT refunds if the business can provide documentation proving the goods left the UAE within 90 days of the supply date.
• Indirect Exports: Goods exported through GCC countries before reaching their final destination outside the GCC are classified as indirect exports. These goods are also eligible for VAT refunds, provided the exporter complies with FTA conditions, including documentation of the goods’ journey and their final destination.

Additionally, for all the cases, the export businesses are required to maintain the proof of transport and delivery to claim the refund.

VAT refunds for exports UAE: VAT return filing for exports

In the UAE, exporters typically have the following tax period:

• Quarterly for an export company whose annual revenue is less than AED 150 million
• Monthly for an export company that makes at least AED 150 million a year

They have 28 days from the end of the taxation period to claim for their refunds. A particular business may be given a different tax period at the discretion of the local tax authorities. The failure to file a tax return within the authority’s designated time period will be deemed a violation, and the violator will be subject to paying fines.

Read also: Difference Between Zero-Rated And VAT-Exempt

Procedure for VAT refund for exports in the UAE

If you are eligible and you fit all the points mentioned above, you can claim for VAT refund in the UAE for your exports business. To process VAT refunds the following procedure is to be followed:

• Log In to the FTA e-Services Portal using the TRN details and login details.
• Complete the VAT Return: the VAT return form can be filled properly with details of export transactions as zero rated and all VAT related expenses to be input in the input VAT section.
• Adjust Input VAT: If input VAT is more than output VAT, then refund is allowed by the FTA.
• Submit the VAT Refund Application: After this submit the application for FTA to review.
• FTA Review and Refund Processing: Finally, after review and approval, FAT issues you the refund on your export VAT.

How to Claim VAT on Exported Goods

Any taxable business can claim a Dubai VAT refund in its VAT return filing in UAE with the Federal Tax Authority (FTA). The VAT return filing is carried out regularly and usually within twenty-eight days for the end of a tax period. Tax period refers to the period of time in which payable tax is calculated and paid. The standard tax period for exporters in UAE is:

• Quarterly for an export business with a yearly turnover below AED 150 Million
• Monthly for an export business with a yearly turnover of AED 150 Million or above

The local tax authority, at its discretion, can assign a specific business a distinct tax period. Failure in filing a tax return during the authority’s specified time frame is going to be considered a violation and the violator will be liable for paying fines in accordance to provisions of UAE Cabinet Resolution (no 40) of 2017 re: Administrative Penalties for Tax Laws Violations in UAE.

VAT refund for exports FAQ UAE

Q1. To whom is the right of VAT refund on exports in the UAE granted?

Under the UAE VAT laws, companies that meet some conditions may be allowed a VAT refund on exported products. Among these conditions are:

• Exports: What is certain is that the company has to have exported products to other nations than the United Arab Emirates.
• VAT paid on export-related expenses: It is equally true that the company might have incurred other deductible costs such as Insurance, packaging and transportation service -all of which forms part of exporting cost.
• Documentation: In order to export the said document and the VAT paid on related costs, the company has to have the necessary documentation.
• It is essential to remember that the requirements and the procedures for export VAT refunds are rather flexible and may be changed. Better still, one should consult an expert in tax or refer to the most current editions of the FTA.

Q2. What papers should be submitted once the exported product is in a bid to recover VAT?

For claiming VAT refunds in case of exports, the following documents are to be submitted to the FTA:

• Export Documentation:
  • Export license or permit
  • Customs export declaration
  • Bill of lading or air waybill
  • Commercial invoice
  • Packing list
  • Certificate of origin (if applicable)
• VAT Invoices: – commercial VAT invoices
• Bank Statements: Bank statements to prove payment of VAT on export-related expenses
• Other Supporting Documents: Any other relevant documents that can support your claim, such as correspondence with customs authorities or freight forwarders

Q3. Want to know about the procedure of filing VAT refund application for exports.

To apply for VAT refund filing, the business must be VAT registered and must have supplied goods outside the UAE. This must be accompanied by relevant supporting documents including; Export License; Customs Declaration; VAT bills; Bank statement; and VAT311 form provided through the FTA e-Services portal. Inventory refunds require early filing and good records from which a seamless export VAT refund process depends.

Q4. What are standard deadlines for filing for VAT refund in the UAE?

The due date for VAT return to be filed by export business in the UAE of the tax period is 28 days. This applies to all the taxable establishments of the UAE.

Q5. Can I claim VAT on services related to export activities?

Yes, you can claim VAT on services directly related to your export activities. This includes services like:

• Transportation and logistics: Transportation, custom declaration and shipping expenses.
• Professional services: Extent of legal services, accounting and consulting service associated with export.
• Insurance: Premiums for insurance of goods in transit.
• Packaging and labeling: Other expenses that relate to exporting or the preparation of the goods involved.

However, when claiming a VAT refund on these services the documentation required includes VAT invoices, payment receipts, and customs declarations. Make sure that the services are connected with export operations and correspond with the requirements of the Federal Tax Authority VAT refunds.

As with tax information, it is advisable to check with a tax accountant or find the latest FTA advice.

Export VAT refund procedure might be greatly streamlined by the VAT registration UAE

When you register your company with us you shall be able to seek professional help throughout the process. Our staff will assist you file well organized VAT returns, accurately compute your VAT and diligently note down your exportation expenses. Contact our office today for timely and accurate Claiming VAT refunds UAE.