How to claim VAT Refund in UAE

How to claim VAT refund in UAE? When the input tax is greater than the output tax on a VAT return, the taxpayer can request a VAT refund after filing their VAT return.

What is VAT Refund?

All the businesses registered under FTA are required to file a VAT return by submitting the details of sales and purchases paid during the tax period. Input VAT is the amount which is paid to the supplier towards purchases or expenses whereas Output VAT is the amount which is collected on sales.

The eligible input VAT amount will be allowed to be adjusted with the output VAT amount. After adjusting the output VAT and Input VAT, the result will lead to one of the following situations.

VAT Payable: If input VAT amount is lesser than the Output VAT, the balance will be VAT payable which needs to be paid to FTA.

VAT Refundable: If input VAT is higher than the Output VAT amount, the excess balance will be VAT refundable.

Timeline for VAT refunds

When a taxpayer submits a claim for VAT refund, the FTA will process and review the application within 20 business days of submission. The taxpayer will be notified regarding the FTA’s decision to accept or reject the claim. If the process exceeds the timeline of 20 days, the FTA will notify the taxpayer regarding the extension of the deadline

VAT refund form UAE

The VAT refund form contains the following fields:

• TRN (Tax Registration Number): This field is pre-populated based on the information in the taxpayer’s account in the User Profile tab. It’s advisable to verify if the correct TRN is listed.
• Total amount of Excess Refundable Tax (in AED): This field is pre-populated based on the formula, Refunds – Penalties = Excess Refundable Tax. This includes refunds reported in all previously submitted VAT returns, and all administration penalties due except for the late registration penalty.
• The amount you wish to have refunded (in AED): The amount you enter must be equal to or less than the amount displayed in the Total amount of Excess Refundable Tax field.
• Remaining amount of eligible Excess Refundable Tax: This field is pre-populated with the amount of refundable tax that you can apply for in the future.
• Late registration penalty amount (in AED): This field is pre-populated based on the penalties imposed on you and whether you have settled the penalty amount or not:
  • If you’re free from VAT fines and penalties, then the field will display Zero (AED).
  • If you have been charged a VAT penalty, which you have paid, then the field will display Zero (AED).
  • If you have been charged a VAT penalty, but you’re yet to pay the amount at the time of claiming this refund, then the field will display the penalty amount.   If the refund amount is negative after deducting the penalty amount, your application will be automatically rejected after submission. If the refund amount is positive after deducting the penalty amount, only the balance will be submitted to the FTA for refund claim purposes.

• Authorized Signatory and Declaration: The authorized signatory is pre-populated by the system in both English and Arabic. Make sure you read the declaration thoroughly before ticking Yes to submit the form.

How to claim VAT Refund in UAE for Businesses?

To submit a VAT refund claim:

• Log in to the FTA’s e-Services portal.
• Go to the VAT tab, then the VAT Refunds tab, and access the form by clicking VAT refund request.
• Complete the form. Some of the fields are pre-populated using the details from your account. Make sure that the details you’ve entered are correct, then submit the form by clicking ’Submit’.
• After you submit the form, you will receive an email from the FTA to notify you of the result of your refund application. Once the claim is approved, the refund will be processed within 5 business days.
• You can verify the refund amount by checking your balance from the My Payment tab under the Transaction History section in the e-Services portal.

VAT Refund Services in UAE

Xact Auditing is assisting taxable businesses in UAE to claim their VAT refunds. We are offering best VAT refund services. Our VAT specialists submit VAT refund form to FTA as per the guidelines and proper format of Federal Tax Authority (FTA). 

We ensure VAT compliance in order to recover VAT refund amount at the earliest. How to claim a VAT refund in UAE is a very complicated task and businesses must take an expert opinion before submitting a VAT refund form.

Xact Services