Expo 2020 and UAE VAT: What does one mean by a Certificate of Refund Entitlement?
27

May 2020

Value Added Tax or VAT is one of the latest addition to the taxes which will be applicable to the entities in the UAE. VAT will not only help create a financial record for all the business entities in the country but will also assist the economy of the country by creating a separate and dependable revenue source for the government. The various functions and features of VAT have led the government of the neighboring Middle East countries to consider implementing VAT in their respective countries.

One of the benefits of VAT is also claiming the excess VAT. The official participants of the World Expo 2020, which was to be held in the month of October in Dubai, will be able to claim a VAT refund as incurred. The Federal Tax Authority (FTA) has recently issued a set of rules which will help a business entity to avail refund on the VAT, which has been paid for the Goods and Services in relation to the Dubai EXPO 2020. 

What is a VAT Refund?

If any expense is made by a business intending to make taxable supplies, part of the expenses can be availed back from the Federal Tax Authority (FTA). The participants of the World Expo 2020, which is to be held in Dubai, have been provided with a special exception in this case. If these participants have a certificate of Refund Entitlement, they can claim back any expenses which are categorized as VAT expenses.

Certificate of Refund Entitlement

Any registered or non-registered participant of the World Expo 2020 can apply for a certificate of Refund Entitlement. With the certificate in hand, a business entity will be able to claim any refundable VAT on the expenses which are done in relation to the Expo 2020.

In order to avail a Refund Entitlement Certificate, a business entity needs to check two boxes, which are:

  1. The business entity should be an official participant of the World Expo 2020 and must have a valid Trade License number.
  2. The participant should not have the intention of using more than 20% of the space allotted to it for non-official or any commercial use.

After taking care of both the required conditions, the business entity can apply for a Certificate of Refund entitlement.

The participants of the Dubai World Expo 2020 can claim a refund while filing their regular VAT Return Form 201.

There are two options according to which the non-registered business entities need to follow to apply for VAT refund:

  1. A non-registered entity can apply for a refund within 15 days of the ending of the quarter, where the value of VAT to be claimed will be less than AED 10,000.
  2. A non-registered entity can apply for a VAT refund within 15 days of the month-end, where the total value to be claimed is more than AED 10,000.

The frequency of the refund may vary depending upon the value which has to be claimed. If by mistake, the entity has not included an expense that will qualify as a VAT expense while filing a refund then the expense can be added in the subsequent VAT filing.

After the refund filing process, the refund will be allotted to the entity in 15 to 20 working days. Post filing for the refund, the concerned entity will be contacted and informed about the status of their application. If the application is approved by the authority, the total amount of the refund will be credited in the account of the entity within 30 days.

All these rules and regulations are necessary to understand, as these can be profitable to a business. The only thing is that these regulations are quite complicated and would require help to understand. This is why every business entity must avail of the services of a financial consulting firm. These firms will not only help decipher the rules and regulations of the country but will also help the business to grow and achieve new heights.

If you are looking for assistance in the financial matters of your business, then you must have a look at the services provided by JAXA Chartered Accountants. JAXA comprised of teams of financial accountants and dedicated chartered accountants which will provide timely and relevant assistance to the business in the financial matters so that there is no hindrance in the smooth sailing of the company. To know more about the services of JAXA Chartered Accountants, Contact Us. We will be happy to help you.