GCC Indirect Tax Weekly Digest

UAE FTA updates several VAT and Excise Tax user guides

The United Arab Emirates (UAE) Federal Tax Authority (FTA) has updated several user guides posted on its website.

The VAT User Guide and the Excise Tax User Guide have been updated.  The amendments include procedural changes for the use of the FTA’s website, and guidance on the types of registration amendments which require approval from the FTA.

The VAT refund for building new residences by UAE nationals user guide has been updated to include substantial documentation requirements.  For example, when submitting a refund request, applicants must include a bank account validation letter, construction contract, consultancy agreements, and variation orders. 

The relevant verification body may also request further documentation, including lump-sum invoices, site plans, schedule of work, timesheets of labour, and approved drawings from the relevant municipalities.  Note, these are not exhaustive lists, and potential applicants should refer to the guide for more information.

The guide also states that swimming pools are not considered to be ‘incorporated into’ residential buildings, and the VAT incurred on the expense of installing a swimming pool in or on the premises of the home will not be recoverable.

UAE FTA confirms VAT Tourist Refund Scheme to be launched in November 2018

The UAE FTA has indicated to retailers around the country that the VAT Tourist Refund Scheme (TRS) is expected to be launched in November 2018.

The FTA announced that it has chosen Planet to operate the TRS. Retailers will be able to register for the TRS from 10 September 2018.

To qualify for a tax refund under the tourist refund scheme, the FTA has previously confirmed the following conditions should be met:

• The goods need to have been supplied to the tourist within the UAE;
• The tourist must intend to leave the country with the supplies within 90 days from the date of supply;
• The goods must be exported from the UAE by the tourist within 3 months of the date of supply;
• The goods must have been purchased from a retailer registered in the system, and the purchase process must meet the requirements determined by a decision of the FTA Chairman (including documentation requirements); and
• The goods must not be excepted from refund.

Tourists will submit claims to the system operator directly from designated spaces.

This digest is for information purposes only and should not be construed as advice. It does not necessarily cover every aspect of the topics with which it deals. You should not act upon the contents of this alert without receiving formal advice on your particular circumstances.