Know about the VAT refund available in the UAE

VAT refund in the UAE

The United Arab Emirates is one of the countries that offer the greatest job opportunities for entrepreneurs. However, these opportunities bring with them a series of regulations that investors must comply to the letter. One of the many regulations has to do with taxes on companies, tourists, etc. In the following lines, we will talk about the VAT refund in the UAE.

In this article, you will find information about the Value Added Tax, the registration process, and the VAT rates. You will also get to know what is a VAT refund in the UAE and how we can help you with this process.

  1. What is VAT?
  2. How to register for VAT?
  3. What are the VAT rates?
  4. VAT implementation in the UAE
  5. VAT for businesses
  6. How is the VAT refund process in the UAE?
  7. Who is eligible for a UAE tourist VAT refund?
  8. How can we help you with the VAT refund in the UAE?

1. What is VAT?

The Value Added Tax or VAT is an indirect tax imposed on most supplies of services and goods that are bought and also sold. You can also find this tax as a “good and services tax”.

VAT is one of the most common taxes around the world. Around 150 countries have implemented VAT, including all the countries of the European Union, Australia, Canada, New Zealand, Malaysia, and also Singapore.

This tax appears in each step of the “supply chain”. Generally, final consumers bear the VAT cost while businesses account and collect for the tax. Acting, in a certain way, as a tax collector on behalf of the government.

A business pays the government all the taxes it collects from customers while it may also receive a refund on tax that it has paid to its suppliers. The tax receipt to the government indicates the “valued add” throughout the supply chain.

2. How to register for VAT?

The registration may be voluntary or mandatory, depending on the business revenue generated.

2.1 Mandatory registration

A company must register for VAT if the total value of its imports and sales within the UAE exceeds the mandatory registration threshold of AED 375,000 for the previous 12 months or within the upcoming 30 days.

2.2 Voluntary registration

A company can voluntarily register for VAT if the total value of its imports and sales within the UAE exceeds the voluntary registration threshold of AED 187,500 for the previous 12 months or within the upcoming 30 days.

Small scale businesses and startups can also register voluntarily if their expenses exceed the voluntary registration threshold, thereby making them eligible for a tax credit.

3. What are the VAT rates?

The VAT rate is 5% for most services and goods except for these exempted or 0% tax categories.

3.1 0% VAT

  • Goods and services exported outside the GCC
  • Certain education and healthcare supplies
  • International transportation
  • Newly constructed residential properties
  • Certain investment-grade precious metals (e.g silver and gold of 99% purity)

3.2 VAT exempt

  • Public transport
  • Life insurance
  • Residential properties
  • Certain financial services

4. VAT implementation in the UAE

The UAE Federal and Emirates government provide residents and citizens with many different public services. For example, roads, public schools, hospitals, waste control, parks, and police services. The citizens pay for these services using government budgets.

Value Added Tax provides the United Arab Emirates with a new source of income, thus contributing to the continued provision of high-quality public services in the future.

It also helps the government to reduce the dependence on income derived from oil and hydrocarbons.

4.1 VAT implementation in coordination with other GCC countries

The UAE is part of a group of countries that are connected through “the Economic Agreement between the GCC States” and “the GCC Customs Union”. This group of countries has historically worked together to design and implement new public policies that boost the economy of the nations.

5. VAT for businesses

All companies in the UAE need to record their financial transactions and ensure that these records are accurate and also up to date. Businesses that meet the minimum annual turnover requirement (as evidenced by their financial record) must register for VAT. Companies that do not believe it is necessary to register for VAT must maintain their financial record in any event. Just in case the government needs to establish whether they should be registered.

5.1 VAT-registered businesses generally

  • Keep a range of business records
  • Reclaim any VAT they’ve paid on business-related services or goods.
  • Charge VAT on services or taxable goods they supply.

If you register your company in the Value Added Tax, you must report the amount of VAT you have charged and also the amount of VAT you have paid to the government on a regular basis. This must be a formal submission and you must report it online.

If you charged more VAT than you paid, you will have to pay the difference to the government. If you paid more tax than you’ve charged, you are entitled to reclaim the difference.

5.2 VAT in real estate

The handling of VAT will depend on whether it is a residential or commercial property. Supplies (including leases or sales) of commercial properties are taxable at the standard VAT (i.e 5%)

On the other hand, the Value Added Tax does not apply to supplies of residential properties. This ensures that this tax does not constitute an irreparable cost to those who purchased property. In order to ensure that real estate developers can recover VAT on the construction of residential properties, the first supply of these properties within three years of completion at the time of VAT introduction is zero-rated.

5.3 Zero-rated sector

The following main categories of supplies will have a 0% VAT:

  • International transportation and related supplies
  • Exports of services and goods outside the GCC
  • Certain investment-grade precious metals (e.g silver, gold of 99% purity)
  • Supply of certain healthcare services, and also the supply of relevant goods and services.
  • Newly constructed residential properties.
  • Supply of certain education services, and also the supply of relevant goods and services.

5.4 VAT-exempt sectors

Some of the categories exempted from VAT are the following:

  • Bare land
  • Local passenger transport
  • Residential properties
  • The supply of some financial services

6. How is the VAT refund process in the UAE?

A company can receive a refund from the government on tax that it has paid to its suppliers. To get a tax refund you must follow these simple steps:

  • Log in to the respective governmental entity portal
  • Select a VAT refund request
  • Complete the requested form
  • You will receive an email from the respective governmental entity detailing the result of your application.

6.1 VAT refund in the UAE for business visitors

The foreign businesses that meet the following conditions are eligible to apply for a VAT return:

  • They are not taxable people in the UAE
  • The company has no place of establishment or fixed establishment in the UAE or any GCC-implementing state.
  • They are not carrying any business in the UAE

The time to claim each refund is twelve months, and the minimum amount of each tax claim submitted by business visitors under the Foreign Business Scheme is AED 2,000.

6.2 New residences

The new residence VAT refund scheme applies to all UAE nationals that meet the following criteria:

  • A natural person should be the one who makes the claim.
  • The claim should be related to a newly constructed building to be used solely as a residence of the person or the person’s family.

Under this scheme, people can claim a refund of the tax paid on the expenses of constructing the residence.

The VAT refund in the UAE applies to the following expenses:

  • Services provided by contractors, including services of engineers, architects, builders, and other similar services necessary for the successful construction of the residence.
  • Building material (goods of a type normally incorporated by builders in a residential building) This does not include electrical appliances or furniture.

You must deliver the refund form to the corresponding government entities within 6 months after the date of completion of the building. The date of completion is:

  • When the building is certified as completed by the municipality.
  • When the building becomes occupied.

6.3 Tourist

The visitors and tourists can claim a refund on VAT paid for purchases made during their stay in the country. The recovery of the payment will be made through a fully integrated electronic system that connects the retailers registered in the “Tax Refund for Tourists Scheme” with all ports of entry and exit from the UAE.

In order for a tourist to be able to claim a VAT refund in the UAE he must meet the following conditions:

  • The goods must be purchased from a retailer who is participating in the “Tax Refund for Tourists Scheme”
  • The tourist must have the explicit intention of leaving the UAE within 90 days from the date of supply.
  • The process of export and purchase of goods must be carried out according to the requirements and procedures determined by the Federal Tax Authority.
  • The individual has to export the purchased goods out of the UAE within 90 days from the date of supply.

6.4 Validation of the refund claim

All claims made by tourists must be validated at different validation points – special devices placed at departure ports. For example, border ports, seaports, and airports in the United Arab Emirates. Another example is if you are leaving Dubai as a tourist, you can perform the VAT refund process at the VAT counter at Dubai Airport.

A more detailed process is the following:

  • Go to the designed validation point before checking in your luggage.
  • Approach the immigration counter and present the original receipt with the Tax-free tag on it, a copy of your credit card, your passport, and obviously, the product purchased.
  • After the successful validation, you can choose to refund via cash or card.
  • Lastly, you will receive your refund.

Tourists can receive up to 85% of the total VAT amount. The remaining 15% is charged as administration fees. Also, please note that cash refunds are capped at AED 7,000 per day, following the new regulations imposed by the Federal Tax Authority.

This aims to reduce the shopper’s reliance on cash during financial transactions and help them to take advantage of the country’s technological advancement.

There is no limit on the maximum recoverable amount if the transactions are made through a credit card.

7. Who is eligible for a UAE tourist VAT refund?

Not all tourists can claim a VAT refund in the UAE. Due to certain regulations, only the following people are eligible for a VAT refund:

  • Travelers aged 18 or over who are not residents of the United Arab Emirates
  • GCC Nationals can claim VAT refunds
  • Not a crew member on flights leaving the country.

Noe that additional regulations may apply to GCC Nationals residing in foreign countries for studying

8. How can we help you with the VAT refund in the UAE?

A quality tax, accounting service, and a VAT refund in the UAE are essential for the development of any company. Our team of professionals is ready to offer an end-to-end service of guidance and support to run your business efficiently and smoothly.

Some of the services that Connect Zone can offer your company are the following, a wide range of PRO services to keep your company organized and up to date.

You will have our full support during your application process for a freelance visa, and also we will find an office for your business in one of the best business centers.

If you are ready to start the journey of getting a VAT refund in the UAE with us, our team is waiting for your call. Contact us and discover all the ways in which we help you; +971 43 316 688 or email us at

Are you in search for jobs? The Talent Point is the ideal place for you. Get ready to meet and connect with the best companies in the Middle East. If you are interested, send your CV to or via

What are VAT consultants in the UAE?

VAT consultants in the UAE

Although the UAE has positioned itself as a region full of job opportunities for foreign investors, all of them must comply with the different laws and regulations in order to operate legally in the country. The local government is quite strict when it comes to filing tax and VAT returns. For this reason, it is important to hire VAT consultants in the UAE to take care of all the procedures and ensure the successful conclusion of each one of them.

In this article, you will find information about the value added tax, what are the laws related to taxes in the Emirates, how you can register your company to comply with this tax, and more.

  1. What is VAT in the UAE?
  2. How to know if VAT applies to your company?
  3. How to register a business for VAT?
  4. Implications of value added tax
  5. How to declare VAT in the UAE?
  6. Why is it important to hire VAT consultants in the UAE?
  7. How can we help you with your company’s value added tax?

1. What is VAT in the UAE?

Value Added Tax (VAT) is one of the different taxes imposed by the UAE government. Introduced in 2018, it relies on the consumption of goods and services at every point in the country’s economic supply chain.

This tax is an effective way for those registered companies to assume the role of tax collectors on behalf of the Federal Tax Authority, with the final consumer assuming the cost of VAT.

If you are a new entrepreneur in the country and you do not have much knowledge about the tax laws and the different requirements that you must meet when setting up a business in the UAE, it is advisable that you hire the best VAT consultants to guide you and advise you throughout the process.

1.1  Aspects about value added tax in the UAE

The government imposed taxes to generate revenues for public services. For example, it is for security, transportation, and hospitals. Although there are different types of taxes in the UAE, they can be mainly divided into two categories:

  • Indirect taxes collected by an intermediary (like a retail store) on behalf of the government.
  • Direct taxes collected by the government itself.

Value Added Tax, also called General Consumption Tax, is an indirect tax imposed on most products or services purchased or sold. Generally, the VAT rate is 5%. Also, the Federal Tax Authority is the entity in charge of conducting audits and ensuring the implementation of this tax.

Besides a new source of income, the implementation of this tax helps the UAE to reduce the country’s oil dependence.

2. How to know if VAT applies to your company?

According to the UAE’s VAT law, this tax applies to all companies that meet certain conditions. The companies that must comply with this tax, according to the government, are the following:

  • Companies with a yearly turnover exceeding AED 375k on taxable supplies and imports must register for VAT.
  • Companies with a yearly turnover greater than AED 187.5k, but less than AED 375k have the option to register for VAT.

Businesses pay the government with the tax they collect from customers. Consequently, they also receive a refund for the amount they pay to suppliers.

3. How to register a business for VAT?

Those unregistered companies can do it through the online portal on the FTA. The VAT registration process is two simple steps.

The first is setting up an e-service account. Then, you must log in to your new account and complete your VAT registration.

3.1 Create an e-service Account

Creating an e-service account is a mandatory requirement for those companies that wish to successfully register for VAT. To start this process, visit the FTA website and follow these steps:

  • Select the “sign up” button on the main page and enter data such as email ID, password, and a security code.
  • After entering the required data, an automatic email will be sent to your registered email ID for verification.
  • Once you have completed the above steps, you will be able to access your new E-service account with your password and username.

3.2 Register for VAT

When your e-service account is duly verified you will be able to enter it. After this, you will be asked to register for VAT.

Then, you will read the begin guide. This guide describes all the requirements related to VAT registration and is divided into sections that outline the data and the process necessary to complete it.

It is highly advisable that you hire the best VAT consultants in the UAE to guide you through the entire registration process and ensure a successful outcome.

However, if you prefer to do it alone, we recommend that you read the guide very carefully (to avoid mistakes). After this step, you can continue with the VAT registration form.

It is divided into eight sections that include the following:

  • Details of the applicant
  • Banking details
  • Contact details
  • About the applicant
  • Business registration
  • Declaration
  • About VAT registration
  • Review and submit

You must fill every section before moving on to the next. It is also recommended that you save your progress while moving forward as users are logged out after 10 minutes of inactivity.

After you fill in each section with the necessary information, click save and review. There, you can review your answers before submitting them.

Once you have reviewed your answers, the status of your application will change to pending. You will also get an email confirming that the FTA received your application

3.3 Documents required for a UAE VAT registration

To carry out the process of registering your company for VAT you will need to submit certain documents, which are the following:

  • Bank account details
  • Contact details of the company
  • Nature of activities or performed businesses
  • Emirates ID copy of the owners
  • An income statement from the last twelve years
  • Passport copies of the owner declared on the license
  • Business trade license copy
  • Memorandum of Association (MoA)

4. Implications of value added tax

4.1 Implication of VAT on individuals

Value Added Tax will apply to most transactions of services and goods; however, there are certain exceptions. As a result, the cost of living in the UAE is likely to increase slightly. However, this will depend on the individual’s lifestyle and spending behavior.

In other words, if the individual only spends on things that are relieved from VAT, they are very unlikely to notice any difference.

The government will include rules that will ask the different companies to clarify how much VAT an individual must pay for each transaction. According to this information, individuals can decide whether to buy something or not.

4.2 Involvement in businesses

All companies registered for VAT must be responsible for documenting their costs, incomes, and associated these charges. Merchants and registered companies must charge value added tax to all their customers at the prevailing rate and incur VAT on the services and goods they purchase from suppliers.

Note that the UAE government will pay or claim the difference between sums.

4.3 VAT registered businesses generally…

  • May reclaim any VAT they paid on services and products related to the company.
  • Must charge VAT on taxable services or products that they offer.
  • Will keep the business records, which will allow the government to check that the company carries out its activities according to the legality of the United Arab Emirates.

Businesses registered for VAT must report how much they have charged for it and how much they have to pay to the government regularly. It must be a formal submission and you must do the report online.

If the company has charged more value added tax than they have paid, they must pay the difference to the government.

If, on the other hand, the company has paid more than they have charged, then they can claim the difference.

5. How to declare VAT in the UAE?

At the end of each tax period, companies registered for VAT must submit a VAT return to the FTA.

A vat return is a summary of the value of purchases and sales that a taxpayer has made during the tax period, and shows the taxable person’s VAT liability.

5.1 Liability of VAT

The liability of VAT is the difference between the input tax (VAT incurred on purchases) recoverable in a specific period and the output tax payable (VAT charged on supplies of services and goods) for the same period.

When the output tax exceeds the input tax, you must pay the difference to the FTA. Contrarily, when the input tax exceeds the output tax; the person who pays this tax will receive the difference back.

5.2 How to file a VAT return?

To file a VAT return, you must do it electronically through the FTA online portal. Before filling out this form, make sure you meet all the requirements.

5.3 When should a business file a VAT return?

Tax-paying companies must file the VAT return with the FTA regularly. Usually, you do this within 28 days of the end of the tax period.

The tax period is a specific time for which the tax to be paid must be calculated and delivered. The standard period is the following:

  • Companies with an annual turnover of less than AED 150 million must submit VAT quarterly.
  • Companies with an annual turnover of AED 150 million or more must submit it monthly.

Note that the Federal Tax Authority may, at its option, request a different tax period from certain types of companies.

If a company does not comply with the tax period and does not deliver the VAT, it can be sanctioned.

6. Why is it important to hire VAT consultants in the UAE?

The support and guidance of VAT consultants in the UAE are of utmost importance for those companies that want to maintain a credible and law-abiding reputation. The knowledge of these professionals about tax laws and the latest amendments will prevent you from making any mistakes or having any issues during the process.

Some of the reasons why you should hire the best VAT consultants in the UAE are the following:

6.1 Cost-effectiveness

Hiring this service, instead of carrying out the process yourself, is cost-effective in many ways. By deciding to hire a VAT consultant, the requirement of a supervisor, a worker, an additional manager, or tax formalities can be avoided.

6.2 Accurate reports

Accounting and reputed audit firms in the United Arab Emirates use the most advanced software to calculate value added tax, which prevents any mathematical errors.

Also, you must take into account that the wrong VAT filling can bring you problems with the UAE authorities.

6.3 Timely advice

In addition to the support of value added tax calculations, VAT Consultants in the UAE can advise you depending on the latest updates in government policies and global trends.

7. How can we help you with your company’s value added tax?

Every entrepreneur who decides to form a company in the UAE will, at some point, come across laws, regulations, and obstacles to overcome. From the simplest procedures to processes that require more time and knowledge, it is advisable to hire an agency specialized in business setup, such as our firm, to ensure that each step is carried out successfully.

Here, in Connect Zone, you will find the best VAT consultants, we can help you with the entire VAT registration process, we will offer you consultancies if you need them, and we can even help you with your company’s bookkeeping.

Would you like to receive more information about the services we can offer for your company? You can contact us at +97143316688 or also via email at where one of our advisors will answer any questions you may have.

Additionally, if you are looking for the best employment opportunities in the UAE and many other countries, make sure to visit You may also send us your CV through