Media ININ Economy We Trust
03-03-2019 Media in\ Dubai
The Federal Tax Authority announced the introduction of the “VAT refund mechanism for foreign visiting business”, noting that the tax return form for visitors to the country for the purpose of business is available through the website of the Authority.
The Authority confirmed in a press release issued today that it has started receiving refund requests for 2018 for foreign businesses eligible for tax refunds. The VAT refund mechanism for foreign visiting business is to refund the tax paid for any import or import by any person other than A resident of the State or an applicable State shall be engaged and not taxable to the States for which the value added tax is paid for its visiting UAE businesses where reciprocity shall be refunded to the visiting business of the emirates from those States.
On its website, the Federal Tax Authority has launched a guide on the mechanism for VAT refunds for foreign businesses that provides an explanation of the recovery criteria and procedures.
HE Khalid Ali Al Bustani, Director General of the Federal Tax Authority, said that the new mechanism is in line with the UAE’s position as a global trading center and aims to enhance the attractive environment for investments by supporting economic activities in the areas in which the visiting business is participating. Trade, exhibitions, conferences, etc., and the national economy in general, pointing out that the mechanism of refunding value added tax for visiting foreign business is characterized by clarity, simplicity and transparency.
He added that the principle of reciprocity and return of tax is applied to the work of resident countries in which the value added tax is paid for visiting UAE businesses. He explained that this mechanism came in accordance with Federal Law No. 8 of 2017 regarding value added tax and the conditions and controls specified in the executive regulations of the decree. By law, which provides for the refund of the tax paid for any import or import made by any person who is not a resident of the State or an applicable State who is engaged in business and is not taxable pursuant to the fulfillment of the necessary conditions.
The Federal Tax Authority announced the procedures by which the refund of value added tax for foreign businesses eligible for tax refund.
Indicating that the redemption period for each application is one calendar year. For example, redemption claims for 2018 claims may be submitted as of April 1, 2019. As for the subsequent years, The following year the claim is that for the tax period from January 1, 2019 to December 31, 2019, redemption applications will be accepted as of 1 March 2020.
The minimum amount for each VAT refund request that may be submitted by foreign businesses is AED 1,000 and may include one purchase transaction or multiple purchase transactions.
The Authority stressed the need to keep the original tax invoices for purchases for which tax refunds will be filed and will be requested to be attached upon submission of the application.
According to the mechanism, works residing in any of the GCC countries that are not considered to be applied may submit a request for VAT refunds incurred in the UAE under this system.
Three non-refundable cases were identified in which foreign works were provided in the State unless the recipient or recipient was obliged to calculate the tax in accordance with the reverse calculation mechanism and if the input tax in respect of any goods or services excluded from lawful recovery was therefore not recoverable by the subject And if the foreign business is a non-resident tourist company, it is also not allowed to recover.
The Federal Tax Authority has revealed that four basic conditions for VAT refunds must be met by foreign businesses. The first is that foreign businesses should not have a fixed place of establishment or establishment in the State or in any of the GCC countries that apply VAT with (Ii) to comply fully with the provisions of the unified GCC Value Added Tax Convention and the second shall not be registered or taxable in the United Arab Emirates and the third shall be registered as an establishment with the competent authority in the State in which it was established; the fourth condition shall be the business Foreign belonging to the State of applying VAT and permit recovered in similar situations to work residing in the UAE.
