FTA Outlines Requirements for VAT Refund on New Residences in UAE

The Federal Tax Authority (FTA) has recently set requirements and procedures to refund Value Added Tax (VAT) on new homes for UAE nationals.

According to the statement issued by FTA, in order to claim the refund of VAT there are three conditions that need to be met:

• The applicant must be a natural person and a citizen of UAE.
• The monetary cost that is being claimed must have been spent towards the construction of the new residence in UAE. Such residence must be used by the owner himself or his family for residential purposes. Additionally, the construction services must be a part of the construction project.
• Only the VAT paid on expenses are eligible for the refund. For example, money expended on buying construction materials.

What Are The Steps To Claim Refund?

Now that we have established the criteria for claiming a refund, let us look at the steps to be followed to claim such refund.

• Step 1: VAT Refund Form 

The applicants must download the VAT refund form from the official website of the FTA. After the download, fill in all the required details, take a print out and sign it.

If you cannot manage your VAT refund process on your own, it’s wise to take the help of a professional VAT consultant in Dubai like IMC Group.

• Step 2: Form Submission 

Scan the duly filled and signed form and make a PDF File. Along with the form, you would also require the scanned copies of some additional supporting documents. These are:

• A copy of the applicant’s passport
• A copy of the applicant’s Emirates ID
• The paperwork providing evidence of the applicant’s ownership of the plot of land in question

Send the form and the scanned supporting documents to [email protected]. It usually takes less than five working days to process the VAT refund applications. The applicants will receive an email that informs them about the status of their application i.e. accepted or rejected.

• Step 3: Refund of VAT

For the applicants whose VAT refund application gets accepted, they become eligible for the refund. They will now have to submit the refund request to an accredited verification body assigned by the FTA. Along with the refund request, you must submit the reference number (of the earlier application), property blueprints, and related purchase invoices.

The accredited verification authority will evaluate your refund request and based on that prepare a ‘Verification Report’. This report will state the amount of VAT paid versus the recoverable VAT amount and will be sent to the FTA within 15 days from the date the invoices were issued. The FTA will further take approximately 20 working days to process the final request. In five more working days, it will refund the eligible recoverable amount to the applicant.

Things to Remember

The FTA has clarified that the applicant can submit the VAT refund application within six months after the completion of the residential building. This means that the completion of the home is essential, not the occupancy, to claim the VAT refund.
 

Get in touch with us if you have any enquiries regarding VAT Refund.