How to Claim VAT Refund in the UAE

Businesses registered for VAT in the UAE can claim back the VAT they have paid on business expenses, provided the VAT amount paid is more than the VAT charged on sales. This is known as claiming a VAT refund.

Individuals purchasing and exporting goods in the UAE can also claim a refund on the VAT paid. This is referred to as the Tax-Free Shopping Scheme.

The process to claim a VAT refund can be done online via the EmaraTax portal set up by the UAE government. This article provides information on eligibility, process, documents required, and timelines for receiving VAT refunds in the UAE.

Who Can Claim VAT Refund in UAE

Any business registered for VAT in the UAE can claim a VAT refund, provided the input tax (VAT paid on purchases) is more than the output tax (VAT charged on sales). The key criteria is that the business must have paid more VAT than it has charged customers.

Individuals purchasing goods in the UAE and exporting them out of the country are also eligible to claim back the VAT paid. This is referred to as the Tax-Free Shopping Scheme. Tourists carrying the goods and the verified receipt can claim a VAT refund at the airport when departing the UAE.

When to Claim VAT Refund

Businesses registered for VAT can claim refunds every quarter along with VAT return filing or annually after the financial year ends. The time to claim a refund is when the business has accumulated an excess VAT credit, meaning the input tax is higher than the output tax.

Instead of carrying this excess credit to the next tax period, businesses can claim it as a refund. This helps improve cash flows, especially for businesses in regular VAT refund positions.

Step-by-Step Process to Claim VAT Refund

The process to claim a VAT refund in the UAE is fairly simple and can be done online via the EmaraTax portal. Here are the steps:

1. Login to the EmaraTax portal using your registered username and password.
2. From the dashboard, select VAT, then choose the "New Refund Request" option.
3. Fill in the required details in the form, such as bank account details, contact information, total refund amount requested, and period.
4. The form will show your excess refundable VAT amount - ensure the refund requested is less than or equal to this amount.
5. Upload scanned copies of supporting documents like VAT invoices paid.
6. Add any other relevant transaction details and comments.
7. Carefully review all entered information before submitting the VAT refund request.
8. After submission, you will receive an application number - note this.

Documents Required for VAT Refund

To avoid rejection of VAT refund requests, you must maintain proper documentation. Here are some of the documents required:

• Bank account validation letter showing account details
• Original tax invoices for expenses on which VAT was paid
• Proof of payment, such as bank statements
• Customs export documentation (for tax-free shopping refunds)

Timeframe for Receiving a VAT Refund

The VAT refund will be processed after necessary verifications by the Federal Tax Authority. Generally, businesses receive the approved refund amount within 5 to 7 business days after approval. The refund is credited directly to the bank account mentioned in the application form.

VAT Refund for Tourists

Tourists visiting the UAE can also claim back the VAT they paid on goods at certain retail stores. They must request a Tax-Free Form while making purchases and get it validated at the airport upon departure. After validation at the Customs counter, a refund can be claimed in cash up to a limit. Anything above that limit is refunded back to the credit/debit card.

Get Expert Assistance for VAT Refunds

Obtaining a VAT refund in the UAE requires managing documents and meeting deadlines. Finhubmiddleeast, a leading accounting and tax firm in Dubai, can guide businesses through this process with their team of VAT experts.

Their consultants can advise on claim eligibility, ensure proper invoices are maintained, prepare the application, and follow up until completion. With Finhub Middle East's end-to-end assistance, businesses can maximize VAT refunds smoothly. Reach out to them for consultation on your VAT needs.