VAT Refund for UAE National is a special refund scheme available in the UAE VAT law for supporting the UAE Nationals. There are various VAT Refund Schemes available under the UAE Vat Law wherein even unregistered persons can also get benefit out of it. Vat Refund Scheme for UAE Nationals are available to those who are building new residences in the UAE. The Federal Tax Authority (FTA) released a user guide on Vat Refund for UAE Nationals for their new residence which offers a detailed procedure to be followed while applying for Refund.
What are the conditions to be eligible for this scheme?
- The applicant should be a natural person who is a UAE national;
- Only for a newly constructed building;
- The building should be solely used as the residence of the person or the person’s family; and
- The claim cannot be made if the building to be used as a hotel, guest house, hospital or for any other purpose not consistent with it being used as a residence by him or his family.
When should the refund claim be made?
The refund claim under this scheme should be lodged within 6 months from the date of completion of the newly built residence. A newly built residence is considered as completed on the date the residence becomes occupied or the date when it is certified as completed by a competent authority in UAE, whichever is earlier.
Which Costs are eligible for refund?
Examples of expenses which are eligible for considering the scheme
| Services of builders | Services of architects
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| Services of engineers
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Supervisory services
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| Other similar services necessary for the successful construction of the residence
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Building materials that make up the fabric of the property (e.g. bricks, cements, tiles, timber)
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| Central air conditioning and split units | Doors
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| Decorating materials (e.g. paint)
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Dust extractors and filters
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| Fencing permanently erected around the boundary of the dwelling
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Fire alarms and smoke detectors |
| Flooring (excluding carpets)
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Guttering
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| Other heating systems
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Kitchen sinks, work surfaces and fitted cupboards
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| Lifts and hoists
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Plumbing materials
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| Power points
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Sanitary units
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| Shower units
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Window frames and glazing
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| Wiring when embedded inside the structure of the building
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Examples of expenses which are not eligible for considering the scheme
| Furniture which is not affixed to the building such as sofas, tables, chairs, bedroom furniture, curtains, blinds, carpets | Electrical and gas appliances, including cookers |
| Landscaping, such as trees, grass and plants | Free-standing and integrated appliances such as fridges, freezers, dishwashers, microwaves, washing machines, dryers, coffee machines; |
| Audio equipment (including remote controls), built-in speakers, intelligent lighting systems, satellite boxes, freeview boxes, CCTV, telephones | Electrical components for garage doors and gates (including remote controls) |
| Garden furniture and ornaments and sheds |
How to submit the VAT Refund Form under the Scheme?
To claim the VAT Refund, you should complete the form available on the FTA website and submit it online, along with copies of supporting documents. It is important that copies of all documentation (i.e. valid tax invoices) supporting the original payment of the VAT are retained in order for the claim to be validated by the FTA.
- All you need to do after you have completed the Refund Form is, please send the soft copy (signed version in PDF format) to the following email address along with the supporting documents homebuilders@tax.gov.ae
- Please note that the FTA will not review New Residences refund requests sent if is sent to any other FTA email addresses other than the above given.
- Accepted file types are PDF, JPG, PNG and JPEG, total file size limit is 10 MB.
- You will obtain an immediate email notification upon successful submission of the Refund Form.
Once the FTA has successfully assessed the claim, the applicant will be notified with a reference number within 5 business days, and then must apply to a verification body authorized by the FTA to review the invoices and costs related to the claim. Verification bodies are third parties that have been approved by the FTA to perform a detailed review of the expenditure, invoices and VAT incurred in order to verify the VAT refund. Applicants will be required to provide the verification body with the FTA stamped refund form and reference number, the construction plan, and valid tax invoices issued in the name of the applicant. Simplified tax invoices will not be accepted.
The verification body will take no longer than 15 business days to process the request. The refund application will be processed by the FTA within 20 business days of receiving the report from the verification body, and if approved the FTA will make payment of the refund within 5 business days.
What happens if the person later uses the property for commercial use?
When a person who has claimed refund of VAT under this scheme, later uses the property for commercial use, he/she will be required to repay the tax that was refunded earlier.