VAT Refund in Sharjah

Written By Test 101, Reviewed By Test 108

Published on 25/10/2024

VAT was implemented in the United Arab Emirates in January 2018, a very recent development in the country's taxation domain. The UAE's VAT regime falls under Federal Decree-Law No. 8 of 2017, and most goods and services fall within the standard tax rate of 5%. For a business center like Sharjah, companies must check every aspect of VAT regulations to avoid any conflict and reap the maximum financial benefits.

Eligibility Terms for VAT Refund in Sharjah

The VAT refund scheme under the UAE has certain conditions that the tourists need to meet. These are as follows:

• Non-Resident Conditions: This is one of the eligibility criteria to be satisfied to obtain a VAT refund in Sharjah, in which the tourists should be non-residents of the UAE, and they should have entered the state on a tourist visa only.
• Age Restriction Requirements: To avail of this facility, the tourists need to be at least 18 years of age.
• Minimum Purchase Value: The total purchase amount should be more than AED 250 to be eligible for the VAT refund.
• Allowable Products: The purchased commodities cannot be consumed, wholly or partly in the UAE. Refunds on Motor vehicles and services cannot be offered.
• Validation of Purchases: Tourists' tax-free purchases should be validated at any exit points, including airports and seaports, within 90 days from the date of purchase. The process involves presenting the tax invoices, tax-free tags, and goods for inspection when necessary.
• Refund Application Time Limitation: A tourist can claim a VAT refund within one year from the date of export validation of his purchases.
• Maximum Cash Refund: A tourist can obtain a cash refund of only up to AED 35,000. If the refund amount exceeds the limit, then it can be made available through a credit or debit card.
• Registered Retailers: Only purchases from registered retailers under the Tourist Tax Refund Scheme are allowed for a VAT refund.

VAT Refund Claim Process

To acquire a VAT refund, the tourists need to follow the procedure given below:

• Shopping at Participating Outlets: Shop at stores that are registered for the Tourist Tax Refund scheme.
• Get Tax-Free Tags: Buy your goods and ask for tax-free tags at the check-out stage.
• Tax-Free Validation: Take your receipts and purchases to be validated at any of the exit points to the UAE.
• Choose a Refund: Following validation, you will choose your method of refund - Cash, credit card, or digital wallet.

Eligibility Criteria for VAT Refund

Who can apply for VAT refunds?

1. Tourists (under the Tourist Refund Scheme)

2. Businesses (registered for VAT)

3. Government entities

4. Educational institutions

5. Healthcare providers

Necessary conditions to qualify for VAT refunds

1. VAT registration (for businesses)

2. Valid tax invoice or receipt

3. Goods or services purchased in Sharjah

4. Export of goods or services outside the UAE

5. Compliance with VAT regulations

VAT Refund Process for Businesses

Requirements for Business VAT Refunds

• Valid VAT registration certificate
• Tax invoices or receipts
• Export documents (e.g., customs declaration)
• Bank account details

Submission of VAT Refund Forms and Documents

1. Complete the VAT refund application form

2. Attach supporting documents (invoices, receipts, export documents)

3. Apply through the FTA portal or authorized tax agents

Timelines and Steps for Receiving Refunds

1. Apply within 6 months from the export date

2. FTA reviews and verifies application (within 15-20 working days)

3. Refund processed and credited to business bank account (within 5-10 working days)

Documents Required for a VAT Refund

• Invoices
• Receipts
• Shipping Papers
• Customs Forms
• Proof of VAT Payment
• Any Other Papers You Need

Procedure to Claim VAT Refund in UAE

For Tourists:

1. Purchase goods from participating retailers

2. Ensure total purchases exceed AED 200

3. Obtain tax invoice or receipt

4. Claim VAT refund within 90 days

5. Present passport and tax invoice at airport or border crossing

6. Receive VAT refund in cash or credit

For Businesses:

1. Export goods or services

2. Obtain export documents (e.g., customs declaration)

3. Submit VAT refund application

4. Attach supporting documents (invoices, receipts, export documents)

5. Receive VAT refund within 20-30 working days

Common Issues and Mistakes in VAT Refund Claims

• Always verify your VAT registration status and ensure you meet the eligibility criteria before applying for a VAT refund.
• Ensure that all supporting documents, such as invoices and receipts, are accurate, complete, and organized for a smooth application process.
• Carefully double-check all tax invoices and receipts for correct details like VAT amounts and supplier information to avoid discrepancies.
• Submit your VAT refund application well within the specified deadlines to prevent delays or rejections.
• Confirm that your bank account details are accurate and up-to-date to avoid issues with receiving your VAT refund.
• If you are unsure about any part of the process, consider seeking professional assistance from a VAT consultant to avoid costly mistakes.

Conclusion

Sharjah VAT refund process includes eligibility authentication, documentation verification, and time adherence. Businesses, government agencies, and tourists must present tax invoices with proof of proper documentation, comply with VAT rules, and submit an application for a refund only after verifying the accuracy of each piece of information. As VAT refund mostly hinges upon such intricacies, ensure that all documents are verified twice, adhere to all deadlines punctually, and request help from professionals if needed.

For professional advice and complete support in VAT refund claims, contact Reyson Badger, to help businesses and individuals get their claims error-free and on time.

Written By

Test 101

Test 110