how to claim VAT refund uae Explained 2023
Value Added Tax (VAT) is a consumption tax levied on the value added to goods and services at each stage of production or distribution. In the United Arab Emirates (UAE), VAT was introduced in 2018 at a standard rate of 5%. If you are not VAT registered in the UAE, you might wonder if you can still claim VAT on your business expenses. In this article, we will explore the circumstances in which non-VAT registered businesses can claim VAT, providing examples and referencing official sources to clarify the process.
Claim VAT Refund UAE
Business Threshold for VAT Registration
In the UAE, businesses are required to register for VAT if their taxable supplies and imports exceed AED 375,000 in the preceding 12 months or if they anticipate their turnover to exceed this threshold in the next 30 days. However, businesses with turnover below this threshold are not obligated to register for VAT and are considered non-VAT registered businesses.
VAT on Business Expenses for Non-VAT Registered Businesses
Non-VAT registered businesses cannot charge VAT on their sales invoices, but they may still incur VAT on their business expenses. The UAE allows these businesses to recover VAT paid on their expenses under certain conditions. To claim VAT on expenses, you must meet the following requirements:
a. Valid Tax Invoice: You must have a valid tax invoice that complies with the UAE’s VAT regulations. The invoice should contain specific information, including the supplier’s VAT number and a clear breakdown of the VAT amount.
b. Expense Must Be Incurred for Business Purposes: The expense must be directly related to your business activities and used for making taxable supplies.
c. Expense Must Not Be Exempt: Some expenses, like financial services, residential properties, and bare land, are exempt from VAT. You cannot claim VAT on these expenses.
d. Time Limit: You must claim VAT within six months from the end of the tax period in which you incurred the expense.
Examples of VAT Claims for Non-VAT Registered Businesses
Let’s illustrate this with an example:
Sarah runs a small stationery shop in Dubai. Her annual turnover is below the VAT registration threshold, so she is not registered for VAT. However, she buys office supplies worth AED 5,000 from a VAT-registered supplier. She receives a valid tax invoice that shows AED 250 in VAT.
Since Sarah’s purchase is for her business, not exempt, and supported by a valid tax invoice, she can claim the AED 250 as input tax. This reduces her overall business expenses.
How to claim VAT refund in UAE for tourists:
To claim a VAT refund as a tourist in the UAE, you must meet the following conditions:
- You must be a non-resident of the UAE.
- You must have spent at least AED 275 on eligible goods and services in a single day at participating retailers.
- You must export the goods from the UAE within 90 days of purchase.
To claim your VAT refund, you can follow these steps:
- Go to a Planet Tax Free counter at the airport or any other participating location.
- Present your passport, boarding pass, and original tax invoices.
- If required, show the goods to the Planet Tax Free staff.
- Choose your refund method (cash, credit card, or bank transfer).
- Receive your refund.
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How to claim VAT refund in UAE:
Businesses in the UAE can claim VAT refunds for the VAT that they have paid on their purchases. To claim a VAT refund, businesses must meet the following conditions:
- They must be registered for VAT in the UAE.
- They must have filed their VAT returns and paid their VAT liabilities on time.
- They must have supporting documentation for their input tax claims.
To claim a VAT refund, businesses can submit an online refund application to the Federal Tax Authority (FTA). The FTA will review the application and process the refund if it is approved.
How to claim VAT refund in Dubai airport:
To claim a VAT refund at Dubai airport, you can follow the steps outlined above. Planet Tax Free counters are located in all three terminals at Dubai airport.
How to claim VAT refund UAE:
To claim a VAT refund in the UAE, businesses can follow the steps outlined above. Businesses can submit online refund applications to the FTA through the FTA website.
Can I claim VAT if I’m not VAT registered?
No, you cannot claim VAT if you are not VAT registered. VAT registration is required to claim VAT.
How can I claim VAT back?
Businesses can claim VAT back by submitting an online refund application to the FTA. Tourists can claim VAT back by visiting a Planet Tax Free counter at the airport or any other participating location.
How to claim VAT?
Businesses can claim VAT by submitting an online refund application to the FTA. Tourists can claim VAT back by visiting a Planet Tax Free counter at the airport or any other participating location.
Is VAT payable on insurance claims received?
No, VAT is not payable on insurance claims received.
Can VAT be claimed back?
Yes, VAT can be claimed back by businesses that are registered for VAT. Tourists can also claim VAT back on eligible goods and services purchased in the UAE.
Can you claim VAT on fuel?
Yes, VAT can be claimed on fuel by businesses that are registered for VAT. However, there is a zero-VAT rate on fuel for consumers.
Can you claim VAT on marketing expenses?
Yes, VAT can be claimed on marketing expenses by businesses that are registered for VAT.
Can I claim VAT on old invoices?
Can you claim VAT on online purchases?
Yes, VAT can be claimed on online purchases by businesses that are registered for VAT. However, there is a zero-VAT rate on online purchases for consumers.
How to claim back VAT in Dubai?
To claim back VAT in Dubai, businesses can follow the steps outlined above. Businesses can submit online refund applications to the FTA through the FTA website. Tourists can claim VAT back by visiting a Planet Tax Free counter at Dubai airport.
How to claim VAT on imported goods in UAE?
Businesses that import goods into the UAE can claim VAT on the import VAT that they have paid. To claim VAT on imported goods, businesses must meet the following conditions:
- They must be registered for VAT in the UAE.
- They must have filed their VAT returns and paid their VAT liabilities on time.
- They must have supporting documentation for their import VAT claims.
To claim VAT on imported goods, businesses can submit an online refund application to the FTA. The FTA will review the application and process the refund if it is approved.
Can I claim VAT on old invoices?
Yes, you can claim VAT on old invoices, provided that the invoices are not more than five years old.
How long can you claim VAT back?
Businesses can claim VAT back for up to five years after the end of the VAT period in which the input tax was incurred. Tourists can claim VAT back within 90 days of purchase.
Who can claim VAT?
Businesses that are registered for VAT can claim VAT on their purchases. Tourists can also claim VAT back on eligible
