If your input VAT is greater than your output VAT when submitting a VAT return in the UAE, you are eligible to request an FTA VAT refund. Capella Tax Consultancy L.L.C. provides with guaranteed VAT refund services dubai.
All FTA-registered businesses must file a VAT return, detailing their sales and purchases during the tax period. The amount paid to the supplier for purchases or expenses is referred to as input VAT, whereas the amount collected on sales is referred to as output VAT.
The eligible input VAT amount may be adjusted in conjunction with the output VAT amount. After adjusting the output and input VAT, the result will be one of the following.
VAT Payable: If the input VAT amount is less than the output VAT, the difference is VAT payable, which must be paid to the FTA.
VAT Refundable: If the input VAT is greater than the output VAT, the excess balance is VAT refundable.
Introduction to VAT Refunds
Taxpayers in the UAE request VAT refunds when they discover, after filing their VAT return, that the input tax they paid exceeds the output tax. Input VAT refers to the amount paid to the supplier for purchases or expenses, whereas output VAT refers to the amount collected on sales. To claim the difference from the Federal Tax Authority, one must file a VAT refund request because VAT refunds are not granted automatically. The procedure has its own set of requirements, and meeting them all to the satisfaction of the FTA is more difficult than the ABC. However, you can always hire professionals to file your VAT refund requests such as CAPELLA.
Eligibility Criteria for VAT Refunds
When submitting your VAT return via the FTA portal, you may encounter one of two scenarios:
- VAT Payable: Input Tax > Output Tax
- VAT Refundable: Input Tax < Output Tax
If the input tax is less than the output tax, your business will be in the former position, requiring you to pay the difference between the two. On the other hand, if the input VAT exceeds the output VAT, your company will be in the latter position, allowing you to request a refund for the balance after FTA adjustments.
Alternatives to VAT Refunds
It is not necessary to claim VAT refunds. No, we don’t mean you should abandon it. If you have the net amount due on your declared VAT return, you do not have to use the refund request option. You also have other options, such as:
- You can have it left as a credit on your VAT account to be used to meet future liabilities.
If you anticipate that your company will incur a future liability, offsetting the balance against the future payment due may be a good idea. However, you are free to proceed with the VAT refund claim as well. Form VAT311 must be used to submit a formal request for a VAT refund through the FTA portal. To meet the FTA’s criteria, the process is rigorous and requires trustworthy transactional evidence.
How to claim FTA VAT refund UAE?
To submit a 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 the 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.
Filing for VAT Refunds: The FTA’s Response Mechanism
When taxpayers in the UAE file their VAT return and discover that the input tax they paid exceeds the output tax, they can claim a VAT refund. A taxpayer must wait at least 20 business days for the FTA to review and make a decision on a refund request. Within this timeframe, the taxpayer will be notified whether their VAT claim is approved or denied. If the process exceeds 20 days, the FTA will notify the taxpayer of the extension of the deadline.
CAPELLA: VAT Refund Filing Assistance in the UAE
Capella Tax Consultancy L.L.C offers the most effective VAT refund services in Dubai. Our tax professionals will assist you in obtaining the VAT refund amount from FTA. As Capella, our experts have deep knowledge and extensive experience in all service lines that we perform, including VAT Refund Services in UAE.
Approach one of the best VAT consultants in UAE, such as CAPELLA, to ensure error-free filing of VAT refunds and 100 percent VAT compliance. Our qualified VAT advisors in Dubai, UAE are highly qualified to handle the UAE VAT return and refund filing processes for businesses of all sizes.
Capella provides advisory and support on VAT registration, VAT deregistration, and VAT reconsideration, as well as VAT training. CAPELLA offers a variety of VAT-related services to assist businesses in avoiding hefty penalties, stress, and other VAT non-compliance consequences. Join us if you want us to perform VAT activities on your behalf or if you want to make your employees VAT ready so that they are up to date on any changes in FTA rules and regulations and can file VAT returns and refund requests efficiently.
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