VAT Will Be Paid at Zero Percent on The Following Big Supply Groups
- Exports of products and services outside the GCC.
- Foreign supplies and associated deliveries
- Supply of other means of transport (such as aircraft and ships) through the sea, air, and land.
- Some investment-grade of precious metals (e.g., 99 percent purity of gold, silver).
- Newly constructed residential buildings, which are first supplied within three years of their completion.
- Provision of other educational facilities and the delivery of related goods and services.
- Provision of other Healthcare facilities and procurement of goods and services concerned.
VAT Exemptions
- The supply groups below are excluded from VAT.
- Provision of other financial services (as laid down in the VAT legislation ).
- Residential building.
- Barren land and local public transit to Federal Tax Authority requirements and procedures.
How To Claim a VAT Refund?
If you have excess input VAT, there will be an option on VAT Return to request a refund. One must select ‘Yes’ if you Would you like to offer a refund for the above amount of excess recoverable tax. If you choose ‘No’, the excess recoverable tax would be transferred to future tax periods and can be used to reduce the payable tax and/or fine. You are expected to complete the VAT refund form ‘Form VAT311’ after the VAT return is submitted.
The Following Are The Steps To Apply The VAT Refund Form ‘VAT311’
- Using your username and password to sign in to the FTA e-Services Portal to access the refund form, move to the ‘VAT’ button and then to the VAT refund tab Click on Request for the VAT refund. Clicking on the ‘VAT Refund Request’ will open the refund form.
- Fill out the information in all relevant fields. Required fields are needed to complete for submission of the Refund Form. Most of the details are auto-crowded.
The Fields Available on The VAT Refund Form 311 Are As Follows:
⮚TRN, Legal Name of Entity
This section is auto-crowded on the basis of the information contained in your account user profile. It is, therefore, very essential that the information contained in your profile is both accurate and correct. Please check your Tax Registration Number (TRN) before submitting the refund form.
⮚The Total Sum of Excess Refundable Tax
This field is auto-crowded based on the excess refundable tax reported in the last VAT returns fewer administration penalties due (except for the late registration penalty which is shown separately).
⮚The Amount You Wish To Have Refunded
Please enter the total sum you wish to have refunded. The amount must be equivalent to or greater than the Total sum of Excess Refundable Tax.
⮚The Remaining Amount of Eligible Excess Refundable Tax
This field is auto-crowded and represents the remaining amount of excess refundable tax, which you may apply for a refund in the future.
⮚Late Registration Penalty Amount (In AED)
This field is auto-crowded, depending on whether you have a levied penalty and have settled the late registration penalty for VAT or not. The following table gives information when the payment amount will be shown in this field.
| Scenario |
Penalty Amount |
| If you are not charged with a penalty |
Zero
|
| If you receive a penalty, and you pay the penalty |
Zero
|
| If you have been charged a fine, but you still have to pay the penalty at the time you claim the refund. |
20,000
|
⮚Authorized Declaration And Signatory
The Authorized signatory will be auto-populated, and you need to tick the declaration before submitting it.
Tourist Terms And Conditions For Seeking VAT Refunds
For a tourist to apply for a VAT refund on purchases made in the UAE, he must fulfil particular conditions.
- The purchased products must be exported out of the UAE within three months from the date of delivery.
- The products are not exempt from the Federal Tax Authority’s refund scheme.
- Goods must be purchased from a company participating in the `Tax Refund for Tourists Scheme’.
- He should be clearly intent on leaving the UAE along with the material purchased, within 90 days from the date of delivery.
- The import and export process of the products has to be carried out accordingly.
Below table gives information about some of the Services for which VAT may be refunded in Saudi Arabia and UAE.
| Types of Business |
UAE |
| Hotel |
Refundable |
| Restaurant Meals |
Not Applicable |
| Entertainment Business |
Not Applicable |
| Conferences |
Refundable |
| Exhibition Trade Fairs |
Refundable |
| Marketing |
VAT Zero-rated |
| Consultants |
VAT Zero-rated |
| Car Rentals |
Not Applicable |
| Lawyer Fees |
VAT Zero-rated |
| Tele Communications |
Not Applicable |
| Training Courses |
Refundable |
| Travel |
Not Applicable |
| Transportation |
Not Applicable |
| Petrol |
Not Applicable |
| Diesel |
Not Applicable |
Effects on businesses and steps to follow
The implementation of VAT would have a huge effect on Saudi Arabia and the UAE companies, and they must take constructive measures to prepare for the new program.
⮚Sales And Marketing
firms may need to adjust their pricing strategy, which in turn will impact the demand for the products and services and will impact their profit margins if businesses seek to absorb the vat by reducing the net sales price.
⮚Legal
Companies would have to ensure conformity with the new laws and regulations for both current and new business contracts, invoices, and accounting.
⮚Information Structures
The IT systems will need to be checked and revised to comply with VAT.
⮚Human Resources
A company’s human resources, as well as government officials, would need to be prepared and certified to be ready to comply with the new system.
⮚Finance
All firms will have to file for VAT and comply with the VAT systems. It would not only affect cash flow but would also allow financial departments to be more careful about their VAT input and output liabilities.
Why JAXA?
While VAT has improved since the beginning of 2019, not all information and procedures have been released for reclaiming VAT back. Companies will be entitled to recover the VAT paid on hotels, car rentals, exhibits, conferences, and training courses based on correspondence with the Ministry of Finance. However, services such as marketing, consultancy, and legal fees are unlikely to incur VAT. The rules for a VAT refund on food, restaurants, and business entertainment are yet to be defined. Are you confused with so many rules? Don’t worry, Experts at Jaxa will help you to get your VAT refund and make your operating process easier. Feel free to contact us!
Read more about VAT in Dubai
VAT Services in Dubai
VAT Accounting Services in Dubai
VAT Registration Services in Dubai
How to Register your Company for VAT?
How Can You Prepare For VAT In UAE?
Basic Requirements of VAT Registration in UAE
VAT Implementation in Dubai
VAT Deregistration Services in Dubai
VAT Return Filing in Dubai
VAT Consultancy Services in Dubai
VAT Rates for Different Industries in the UAE
All you need to know about VAT in UAE
VAT Penalties and Its Legal Actions
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