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United Arab Emirates: VAT refunds relating to Expo 2020; tax treaty

United Arab Emirates: VAT refunds relating to Expo 2020

“Official participants” of Expo 2020 (i.e., countries and intergovernmental organizations) will be allowed value added tax (VAT) refunds with respect to import and local procurements made for their pavilions at the Expo 2020 Dubai site.

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For specified construction and operational activities at the Expo 2020 Dubai site, official participants (that would not be expected to register separately for VAT) would be required to obtain a refund entitlement certificate from the Bureau Expo 2020 Dubai office. These refund entitlement certificates would allow them to obtain VAT refunds (subject to review and processing requirements).

VAT refunds, foreign business visitors

The tax authority has provided a detailed guide for business visitors, and under these guidelines, foreign businesses can now claim refunds for VAT incurred on goods and services used in the UAE (subject to certain conditions being satisfied). The guide provides a list of countries with whom reciprocal arrangements are approved by the Ministry of Finance.

Tax treaties update

The UAE currently has in force 91 income tax treaties. The UAE recently signed new income tax treaties with Gabon and Argentina.

Income tax treaties with Angola, Brazil, Chad, Costa Rica, San Marino, St. Vincent and the Grenadines, Suriname, and Iraq have been ratified by one or another party to the treaty. The ratification process for the income tax treaty with Saudi Arabia has been completed, and the treaty will enter into force (come into effect) on 1 January 2020. This treaty has some unique features, in particular with respect to the “residents” and “permanent establishment” clauses, the tax credit mechanism, and the force of attraction rules.

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