How To Claim VAT Refund In UAE For Business?

Showing VAT Refund For Business

Businesses registered under FTA must report their sales and purchases for each tax period through a VAT return. Input VAT, the amount paid on purchases, is balanced against Output VAT, the amount collected on sales. There are two outcomes: If Input VAT is less than Output VAT, it leads to VAT Payable, requiring payment to FTA.

If Input VAT is more than Output VAT, it results in VAT Refundable, leading to a refund.  For businesses, seeking a VAT refund is crucial, enabling them to recover expenses, reduce costs, and enhance cash flow.

Now Consultant, a leading VAT consultancy in the UAE, offers efficient VAT refund In Dubai, ensuring a smooth process for businesses. 

Why Should You Request For VAT Refund?

Requesting a VAT refund is essential for businesses in the UAE. It enables them to recoup funds utilized for business expenditures like supplies and services. This not only reduces overall business costs but also improves cash flow. Moreover, seeking a VAT refund promotes fair competition by relieving companies of the burden of VAT on their operational expenses.

Example of VAT Refund For Business:

Company X acquired a product valued at AED 50,000, subject to a 5% VAT rate, resulting in a VAT payment of AED 2,500 (Input VAT). Subsequently, the company sold the product for AED 30,000, with a 5% VAT rate, leading to the collection of AED 1,500 in VAT (Output Tax). The net VAT refundable by the Federal Tax Authority to Company X is calculated as AED 2,500 (Input VAT) minus AED 1,500 (Output Tax), resulting in a refund of AED 1,000.

How To Claim VAT Refund In UAE For Business:

To initiate the process of obtaining a VAT refund in the UAE, follow these steps to ensure the successful submission of your VAT Refund request to the FTA through EmaraTax, enabling you to claim the VAT Refund online.

1. Sign in to EmaraTax:

  • Sign in to your EmaraTax account with your login details.
  • If you do not possess an existing EmaraTax account, initiate the creation process by selecting the signup button.
  • You will go to the User Dashboard after login.

2.  Initiate the Claim for VAT Refund Form:

  • Select ‘Taxable Person’ as your user type.
  • Click ‘Proceed,’ then ‘View’ to access the Home page.
  • Optionally, choose ‘Tax Agents,’ ‘Tax Agencies,’ or ‘Special Refunds.’
  • Go to the VAT Module on the left sidebar.
  • Click ‘New’ to create a VAT Refund Request; past requests are displayed.
  • Use the ellipsis to edit your request.
  • Initiate the refund by clicking ‘New Refund Request.’
  • Confirm understanding of instructions, then click ‘Next.’
  • Start the refund process by clicking ‘Start.’

3. Complete The Required Details For VAT Refund:

  • Verify bank details.
  • Enter the refund amount (within “Excess Refundable VAT”).
  • Add supporting details.
  • Download, fill, and upload the template.
  • Edit additional details.
  • Upload required documents.
  • Add transaction details.
  • Save and review.
  • Submit after reviewing each step.

Confirm your agreement by checking the box and submitting your application.

Mandatory Documents For VAT Refund:

The required documents for VAT refund are:

  • Bank details like the account holder’s name (matching FTA registration), bank name, address, SWIFT/BIC, and IBAN.
  • Include supporting evidence (e.g., proof of payment) for refund requests due to payment errors or transfers from another TRN.
  • Prepare necessary documentation for excess credit refund requests resulting from tax return filing.
  • Submit the five highest-value tax invoices for standard-rated purchases.
  • Include the five largest invoices for untaxed sales, attaching official evidence for exports.
  • Submit the top five tax invoices for outputs, sales, and other items.

How We Can Help You Regarding VAT?

Now Consultant is a premier VAT consultancy firm in UAE, providing swift VAT refund services for businesses. While claiming a VAT refund can be intricate and time-intensive, Now Consultant’s expertise ensures businesses a smooth and precise process handling, offering peace of mind.

The expert team of Now Consultants provides services to a wide range of VAT Services in UAE, encompassing VAT registration, VAT return filing, VAT audit, VAT refund, VAT accounting, and VAT deregistration.

FAQs:

How Does VAT Refund Work?

In the UAE, the VAT refund enables you to claim 85% of the total VAT paid, with a deduction of AED 4.80 per Tax-Free Dubai Tag. The system automatically calculates the total amount during the refund process.

How To Check VAT Refund Status Online?

To verify the status of your VAT refund online, log in to your Emara Tax account and check the refund status within the VAT Module tab.

Is The VAT Refund Process The Same as For Tourists?

Yes, the VAT refund process is the same for tourists; it requires purchasing goods from a registered retailer, and the goods are eligible for a refund.

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