While purchasing goods and services you are supposed to pay input VAT on that purchase, and if you are a VAT registered person you might be able to reclaim the amount paid on specific items.
If you have used the goods and services for the following, then recover the VAT amount:
- To make taxable supplies
- Supplies that are made outside UAE, but treated as taxable in UAE
- Exempted financial services, being provided to someone outside UAE and considered to be taken place outside UAE.
If you have received and retained the tax invoice and other evidences on the supply or import and the amount of VAT is being paid as a whole or as part then the input tax can be recovered back. In case if you are planning to make the payment within 6 months of the due date it will be also considered for recovery.
Input VAT recovery is not possible on the expenses made on entertainments, motor vehicles that are used for personal purposes and employee related expenses.
Do you know about the special refunds for a non-taxable person in UAE?
There will be special refunds on the following if you are a non-taxable person in the UAE:
- Construction of residences by the UAE citizens
- Tourist visitors
- Business visitors
- Some international organizations, diplomatic bodies, missions and foreign governments etc.
- Any other person or group of persons under the suggestion of the minister
For foreign businesses to submit VAT refunds there must be a minimum of AED 2,000 to be reclaimed.
The recovery of input tax can be done in the following tax period if you couldn’t recover the amount in the tax period during which the conditions are met.
The first application for VAT recovery can be made only after the end of 2018, since there is a 12 calendar month period for each refund.
If you have any doubt about VAT Recovery call us 04 443 1604
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