VAT Compliance

How to Get VAT Tax Refund in Dubai / UAE?

As the Value added tax (VAT) is all set to make it’s coming to UAE, the nation and the businesses are gearing up to comply with all the VAT rules and procedures. Besides registration, returns and payments, VAT tax refund in UAE is also an important aspect to be addressed. While local businesses will be eligible for the refunds, the tourists and visitors might not get the VAT refund initially. The situation may change in near future. Currently the VAT refund is just classified for the local businesses in Dubai,  UAE.

Impact of VAT Tax Refunds in Dubai , UAE

a) For standard rated products and services @ 5%

Businesses can claim tax refund in cases where the input tax paid on purchases exceed the output tax collected on the turnover. For eg. If input tax paid on purchases is AED 5,000 whereas the output tax collected is AED 3,000 on sales, the taxable person is entitled to a refund of AED 2,000.

b) For zero rated products and services

If input tax is paid by the business or individual on purchases who fall under the zero rated products and services, VAT tax refund comes into picture. Zero rated products and services consist of basic health services, educational services, goods and services outside GCC. For more details on zero rated products refer to our briefing on what are zero rated products.

c) For exempted products and services

If input tax is paid by the business or individual who fall under the exempted products and services, there is no entitlement to VAT refund. The input tax becomes a cost to the business and would require a revisit on the pricing mechanism. Exempted products and services consist of local passenger transport, bare land, life insurance.

Find JCA UAE Audit, Leading Accounting Firms for VAT in Dubai, for more information, Inquire us today.