What is a VAT refund Dubai?
Businesses in UAE must file a VAT refund in Dubai. In the Vat refund file, the business can claim the excess amount if the input tax is higher than the output tax. However, if the output tax is higher than the input, the business must pay the excess amount to the authorities. Moreover, the Output tax is the tax imposed on the sales of a business. In contrast, the input tax is the tax collected on purchases, expenses, and imports of businesses.
If taxpayers do not intend to file for a VAT refund in UAE, the excess of input tax over output tax is carried forward next year. The amount is adjusted in subsequent tax periods, including penalties.
What is the process of claiming a VAT refund in UAE?
Claiming a VAT refund in UAE is a straightforward process for businesses. The following are the steps:
- Log in to the FTA’s e-Services portal with your credentials.
- On the portal, go to the VAT tab, under which there is a VAT Refunds tab, where you must click on the VAT refund request. Once you click on it, the VAT refund form will appear.
- Fill out the form. You need to fill in only a few details since some details from your account already appear in the appropriate place. Do not make any errors in filling in the form. After filling correctly, check it once, and click on Submit.
- On submission of the form, FTA sends you an email to notify you of your refund application status.
- You can check the receipt of the claimed refund by checking the My Payment tab under the transaction History section in the e-Services portal.
Necessary fields to fill in the VAT Form for VAT refund in UAE
VAT registration UAE Taxpayers must fill the following fields in the VAT form for VAT refund in UAE. Moreover, there are some pre-populated fields for which you must verify the authenticity of the information. On the other hand, there are some fields wherein you need to fill in the information manually:
- Tax Registration Number (TRN): Pre-populated information
- The total amount of Excess Refundable Tax (in AED): Using the formula, Excess refundable tax = Refunds – Penalties, Pre-populated information
- The amount you wish to have refunded (in AED): You must fill this information manually as an amount you wish you would get in VAT refund in Dubai. This amount is significantly smaller or equal to the previous field.
- The remaining amount of eligible Excess Refundable Tax: This information is pre-populated
- Late registration penalty amount (in AED): Pre-populated information based on the settlement of the penalties that are imposed on you
- Lastly, Authorized Signatory and Declaration: Pre-populated information. You just must read the Declaration, tick Yes, and Submit.
When does the taxpayer receive a VAT refund in Dubai?
On receiving the claim for a VAT refund in UAE, FTA reviews the application within 20 days (about 3 weeks). Whatever the FTA decides regarding the acceptance or rejection of the claim, FTA significantly notifies the taxpayer. Suppose FTA is unable to process the VAT claim within 20 business days. In that case, it notifies the taxpayer of an extension of the deadline. Once the FTA approves the claim for refund, it processes the refund within five business days.
Our Strength
- We are FTA-registered tax agents with the required knowledge and experience in handling VAT refunds in Dubai for all types of businesses in different industry sectors.
- Our impactful team of VAT consultants, business analysts, and tax experts provides high-quality VAT refund services that save you time and money.
- We handle the administrative procedures for filing claims and collecting and organizing the required documents. At the same time, we successfully submit VAT refunds in UAE to achieve VAT compliance.
FAQs
The taxpayer can either claim a VAT refund or let the excess input tax be carried forward to subsequent periods for adjustment with payable taxes and penalties or refund claims in some other tax year.
Yes, foreign business owners can claim a VAT refund in the UAE if they satisfy the FTA-stipulated conditions.
No, you must submit the VAT return for a specific tax period. It calculates your VAT liability for the year. You can claim a VAT refund only if, in the returns filed, your input tax is more than your output tax.
