UAE: VAT refunds for business visitors; refund opportunities

The UAE tax authority updated its guidance for refunds of value added tax (VAT) for business visitors

The UAE tax authority updated its guidance for refunds of VAT for business visitors

The UAE tax authority updated its guidance for refunds of value added tax (VAT) for business visitors.

The updated VAT refund guide addresses specific circumstances when non-UAE resident businesses are entitled to claim a refund of VAT on expenses incurred in the UAE. 

Changes

The updated VAT refund guide reflects the following changes:

  • A clarification about the effective date for foreign businesses to claim VAT refunds when a country is added to the list of countries having reciprocal agreements for VAT refunds for business visitors
  • Amendments to the documentation requirements when submitting a VAT refund request (a certificate of incorporation is no longer required)
  • A clarification that system-generated and scanned tax invoices will be accepted as original tax invoices and may be submitted to the tax authority by e-mail (hardcopies no longer required)
  • The list of countries with reciprocal agreements for VAT refunds for business visitors (formerly contained in Appendix A) to be published separately

No change to deadline

The deadline to submit VAT refund requests—31 August 2021—has not been modified. 

Refund opportunities

To the extent that a business is registered for VAT in the UAE, the refund scheme will not be relevant. However, a business may need to have non-resident affiliated entities that incurred VAT in the UAE in 2020, and these rules may apply with regard to those entities. The new measures may present an opportunity to claim input VAT that otherwise would be a “sunk cost” for these entities. 

Read a May 2021 report prepared by the KPMG member firm in the United Arab Emirates

 

 

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