VAT refund for the establishment of new residences by UAE Nationals

UAE nationals are eligible for a refund of VAT incurred on the construction of a new residence for personal use. For claiming a refund, applicants are required to submit a refund form to the Federal Tax Authority (FTA) via email along with supporting documents. Applicant should have ownership of the plot of land in the UAE on which the construction is to undertake, the date when the building is certified as completed, and the building occupancy date (if available). A copy of Emirates ID, passport, and Family Book is also required to be provided by the applicants.
The refund form has to be submitted to the FTA within six months from the earlier of:

  • The date when residency become occupied; or
  • The certification date showing completion by a competent authority in the UAE

Once the claim is successfully assessed by the FTA, the applicant will be notified within five business days, and then the applicant has to apply to FTA approved verification body to check the cost and invoices related to the claim. Verification bodies are FTA approved third parties to perform a thorough review of the invoices, expenditure, and VAT incurred for the evaluation of the VAT refund. Applicants are required to submit the verification body with the FTA stamped refund form and reference number, the construction plan, and valid (non-simplified) tax invoices issued in the name of the applicant.

The expenses claimed must be pertaining to:

  • Building materials, normally incorporated by builders in a residential building or its site, but not including furniture or electrical appliances.
  • Services provided by contractors, including the services of architects, builders, engineers, and other similar services necessary for the construction of a residence.

Goods are normally deemed to be incorporated into a building when they are installed in such a manner that the installation or removal of those goods would either require the use of tools, or necessitate remedial work to the building, or substantial damage to the goods themselves. Appendix 2 of the guide list examples of the type of expenses that may or may not be claimed.
The verification body will take up to 15 business days to process the request. FTA will process the refund application within 20 business days of receiving the report from the verification body. Upon approval, the FTA will make payment of the refund within five business days.

Exports VAT Refund:

Exports referred to as Goods dispatched out of the UAE or the provision of Services to a Person based outside UAE.
Exports to outside GCC VAT implementing states or outside the scope supplies (to VAT registered businesses in the GCC) are zero-rated, which means that no VAT is chargeable on exports, therefore input tax paid on operational and capital expenditure becomes all refundable for export-oriented businesses.
Exporters can make a claim for repayment of the input tax via the VAT return for which FTA will approve refund claims or notify the taxable person of a rejection of the refund claim within 20 working days of the claim. The FTA may also notify the taxable person that consideration of the claim will take longer than 20 working days.

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Our Tax consultants have in-depth knowledge about VAT law and regulations and can play a pivotal role in successfully claiming the VAT Refunds from FTA.
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