Learn how tourists and businesses can claim VAT refunds in the UAE. BMS Auditing explains eligibility, documents, and step-by-step refund process.
The UAE implemented VAT in 2018 to reduce its dependence on oil and create a sustainable source of revenue. Businesses in the UAE must register for VAT once they achieve a specific turnover. Tourists purchasing goods in the country can avail themselves of the Tax Refund for Tourists Scheme. Knowing the refund process is crucial, whether you're a company wanting to recover excess input VAT or a traveler willing to receive some of the money spent back.
In this piece, BMS Auditing, your go-to FTA-approved tax agent in the UAE, demystifies all there is to know about VAT refunds — from eligibility and documentation to step-by-step processes.
What is VAT Registration in the UAE?
VAT registration is the official process through which companies in the UAE become entitled to charge VAT on their sales and recover VAT charged on business purchases.
Mandatory Registration:
Companies are required to register for VAT if their taxable turnover is more than AED 375,000 over 12 months.
Voluntary Registration:
Where taxable supplies and imports are more than AED 187,500, companies can register voluntarily.
Having registered, the businesses must recover output VAT from clients and remit the FTA. In a situation where the input VAT (VAT incurred on acquisitions) is higher than the output VAT recovered, the businesses become qualified to claim the difference as a refund.
Understanding VAT Refunds in the UAE
VAT refunds do not happen automatically. As a registered business or a visitor, you will need to qualify under certain conditions and follow the right procedure to receive your VAT refund.
Input VAT vs. Output VAT:
When your input tax (VAT incurred on business expenses or purchases) is more than your output tax (VAT collected on sales), you can claim a refund for the difference.
Who Can Claim VAT Refunds?
- For Businesses
- Must be enrolled with the FTA.
- May claim refunds where input VAT exceeds output VAT over a particular tax period.
- Enterprises providing exempt supplies (such as some educational or financial services) are normally not entitled to claim refunds.
- For Tourists:
- Tourists may claim a refund on qualifying purchases made from traders enrolled under the Tax Refund for Tourists Scheme.
- The scheme is only available for qualifying goods, with specific conditions for minimum spend values and product types.
Documents Needed for VAT Refund Claims
In order to claim a successful VAT refund in the UAE, the following documents are needed:
For Businesses:
- VAT Return (Form 201): Input and output VAT information.
- Tax Invoices: Original tax invoices evidencing VAT paid.
- Import/Export Documents: Supporting customs documents if claiming VAT on cross-border transactions.
For Tourists:
- Receipts from Participating Retailers: Must have VAT refund entitlement.
- Passport and Boarding Pass: Required at the airport.
- Authenticated Tax Refund Receipt: From the refund kiosk or point of sale.
How to Claim VAT Refunds in the UAE
For Businesses:
- Our tax consultants submit your VAT Return (Form 201) on the FTA Portal.
- We fill the VAT Refund Application (Form VAT311).
- Prepare all supporting documents like tax invoices and import/export documents.
- BMS Auditing submits the request electronically through the FTA e-Services portal.
- BMS Auditing ensures that each step of the process above goes seamlessly
For Tourists:
- Shop from participating retailers with the "Tax Refund for Tourists Scheme" logo.
- Ask for a VAT refund receipt when making the purchase.
- Verify receipts at airport kiosks prior to departure.
- Obtain refund via approved mediums (cash, credit card, or bank transfer).
Why BMS Auditing for VAT Refund Services?
Being a registered and certified tax agent of the Federal Tax Authority (FTA), BMS Auditing provides VAT compliance services, such as refund processing, for businesses and tourists alike. Our professional team assures:
- Stress-free VAT registration and submission
- Prompt refund claim submission
- Complete documentation assistance
- Compliance with current UAE VAT regulations
BMS Auditing simplifies all tax processes for you, giving you the peace of mind to focus on your business interests.
Seeking VAT registration or refund recovery services in the UAE?
Contact BMS Auditing today - your ever-reliable VAT services partner in the UAE!
