The sales output and input belonging to all businesses are asked to be filed. The money which is collected on sales is called output VAT and the money that is paid to the supplier for the expenses is called input VAT. Both the output VAT and input VAT needed to be adjusted. After adjusting both input and output VAT, it will point to one of the situations:-.
The case of VAT payable that needs to be given to the FTA occurs when the output VAT is higher than the input VAT. The balance should be paid to the FTA.
In the second case, the output VAT being lesser than the input VAT means the excess balance will be VAT refundable.
Are the foreign businesses eligible to claim a tax refund?They are eligible to apply for this scheme in the underlying cases:-
- They are eligible for the business VAT refund scheme if it is a resident in a GCC state, where VAT is not implemented.
- With the relevant authority in its jurisdiction, the foreign business should be registered as an establishment.
- Having no place of establishment in the UAE or a state which has implemented VAT by the foreign business.
- Should not be a taxable person who is registered under the UAE VAT.
- Providing a VAT refund to the UAE entities, the foreign business must be from such a country.
- He/ She will be able to request a VAT refund.
- The excess recoverable tax will be brought forward to succeeding tax periods, compensating against the payable tax or he can apply for a refund later at any time if he does not want to request a refund of the excess input VAT.
The two options that a taxpayer has for VAT refundable is:-
Allowing the tourist to claim the VAT paid on their purchases can be received as a refund, according to the UAE VAT law, but not yet introduced in the UAE. In order to heighten UAE’s status as a premier global tourist destination, a plan is being introduced to handle the tourist refund.
This proposed plan is an advanced digital system and has a connection with points of sales and all UAE ports of entry. To make it easier for the tourists in reclaiming the taxes, designated spaces are provided. This is made possible by a Global operator coordinating with the retailers registered with FTA.