The FTA is all set to launch the “VAT refunds for business visitors scheme” from 2 April 2019.
Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, the UAE Minister of Finance and FTA Chairman, the tax authority chaired the meeting of FTA Board of Directors and said that the foreign businesses can apply to get the taxes imposed during the import and export activities of the people who do not live in the UAE but belongs to the countries which implement VAT refund schemes.
The FTA in a statement said, “The scheme aims to reciprocate the efforts made in countries that offer VAT refunds to visiting UAE businesses”.
Conditions to Avail VAT refund
There are four conditions to be eligible for the VAT refund. They are-
- Foreign businesses should not have the place of establishment or fixed establishment in UAE or any VAT-applicable GCC states.
- Such foreign businesses should not be taxable in the UAE.
- The foreign businesses should be registered with a competent authority in a jurisdiction as an establishment in which they are established
- The foreign businesses must belong from the country which implements VAT and that equally gives VAT refunds to UAE businesses in the same situation.
Sheikh Hamdan said that the “FTA has made plans to encourage the tax compliance and to increase the registration rate among taxable businesses, and combat tax evasion”.
Sheikh Hamdan also said “The authority is also stepping up its efforts to businesses – who we consider to be strategic partners – fully comply with tax regulations and procedures with little to no effect on their activities. With that in mind, we regularly organise awareness and consultative meetings to help private-sector entities across all industries efficiently implement the tax system”.
He also said that the FTA is currently working on a new campaign, especially ‘Your Tax Invoice: Your Rights’, which was launched to promote the use of Tax Invoices in all business activities during the first quarter of this year. Hamdan added “This initiative is in conjunction with the Tax Clinic, which was launched in August 2018, and seeks to establish direct communication with businesses, continuing throughout all seven emirates to raise awareness and to flag obstacles that can be resolved immediately”.
The FTA said “The level of tax compliance in the country has increased, with the number of registrants for VAT exceeding 300,000 registered businesses – tax groups and individuals. Meanwhile, the number of registrants for Excise Tax reached 719, and the number of approved Tax Agents increased to 316”.
The FTA said that the “VAT refund procedures for UAE nationals who are building new residences” is running successfully. By this method, many citizens are getting benefits as it is a simple and straightforward electronic process which allows them to claim the refund on the taxes levied on the construction of the houses. The FTA also said that 235 applications have been approved to allow the citizens to recover Dh9.76 million in total.
The board also gave a green signal to the plan of FTA to launch the second stage of the “Marking Tobacco and Tobacco Products Scheme” by which the tobacco products will be expanded which are imported or locally produced and traded, including shisha.