Guide to Special VAT Refund Schemes in UAE

By  //  January 27, 2023

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Are you a business owner and confused about the different VAT refund schemes available in UAE? You’re not alone! With all of the information out there, it can be hard to know where to begin when looking into these various programs.

Luckily, this blog post will provide clarity on special VAT refund schemes in UAE and help you determine which one might be right for your business. From understanding how to benefit from each scheme to how they could potentially save costs, everything you need to know is here. So, let’s get started!

Under UAE law, there are several special VAT refund schemes that provide relief to certain categories of individuals and organizations. These are outlined below.

1. New residences constructed by UAE Nationals:

Individuals who construct a new residence on land owned by them prior to the introduction of Value Added Tax in the UAE can apply for a full or partial refund of the tax paid during construction process. The application must be submitted before June 30th, 2021, and all required documents must accompany it. If approved, the individual will receive a credit towards their income tax liability in the amount of the refunded VAT.

2. VAT Refund Business visitors:

Business visitors who make purchases within the Emirates may also be eligible for a refund of Value Added Tax when they leave the country. However, this VAT refund can only be claimed by travelers who hold residence permits in certain countries and have made their purchases in one of the following emirates: Abu Dhabi, Dubai, Sharjah, Ajman, Umm al-Quwain, Ras Al Khaimah or Fujairah. In order to claim a vat refund, business visitors will need to provide proof of residence permit and receipts for all purchased goods.

3. VAT Refund for Tourists:

Tourists from outside the UAE may be eligible for a full or partial Value Added Tax refund depending on how long they have spent in the Emirates and where their purchase was made. To qualify for a tax refund tourists must spend at least 72 hours in the country, have made their purchases from a participating retailer, and must leave the UAE within 90 days of making those purchases. Upon leaving the UAE they will be required to submit all original receipts along with a completed form detailing their purchases at one of six designated locations.

4. Foreign governments, diplomatic bodies, and international organizations:

These entities may also be eligible for a full or partial Value Added Tax refund when they make certain types of purchases while in the Emirates. To claim this refund they must present an official request letter from their parent organization to the Ruler’s Court in Dubai. This letter must specify what types of goods and services are being purchased as well as how much VAT is payable on them. The Ruler’s Court will then issue an appropriate refund.

5. Exporting goods outside the UAE:

VAT is refundable for goods exported from the UAE, provided certain conditions are met. The exporter must be a registered taxpayer in the UAE and provide evidence that the goods have actually been exported out of the country by producing shipping documents showing export details such as origin of shipment, destination, quantity of goods, etc.

6. Special investment zones or free trade zones:

Businesses operating within special investment zones or free trade zones in the UAE are eligible to receive refunds on their purchased inputs if they supply their services or sell their products outside these zones. To qualify for the scheme, businesses will need to present supporting documentation including proof of exports and evidence of actual payment received abroad.

7. Healthcare services:

Healthcare providers in the UAE can claim VAT refunds for healthcare services provided to non-residents of the country, provided that the service is not available under any health insurance policy. The exporter must provide evidence of actual payment received from abroad and proof of export as part of their claims.

These are just some examples of special VAT refund schemes available in the UAE. It’s important to understand each scheme’s specific requirements before making a claim. By doing so, you can maximize your potential savings while ensuring compliance with local regulations.

In conclusion, navigating VAT refund schemes in the UAE can be a daunting process. There are several criteria to consider in order to determine eligibility for VAT refund scheme applications. It is essential to have a clear understanding of the rules and regulations before applying or submitting any information related to such schemes.

Furthermore, it’s important to ensure that a valid proof of purchase is submitted in order for the application to be successful. Additionally, individuals need to take note of specific requirements regarding their residential status at the time of purchase and what it means for Vat refund eligibility.

The good news is there are numerous reliable resources available online that can provide helpful insights on various topics related to UAE taxes and VAT refunds. To conclude, understanding special VAT refund schemes available in UAE will help save both time and money while allowing individuals to use their finances efficiently.