How companies can claim a refund
When a company files its tax returns, it is required to list the details of sales, purchases output VAT, and input VAT paid over the past three months.
The output VAT is the amount of tax collected on the company’s sales, and the input VAT is the amount paid to the supplier towards purchases and expenses. If the output VAT is less than the input VAT, the excess balance will be deemed VAT refundable.
So how does a company go about getting its VAT refunded? The taxpayer has two options — according to tax software business Tally — in treating the excess input VAT. Firstly, the taxpayer is eligible to request a VAT refund.
“If the taxpayer doesn’t request a refund of the extra VAT they have paid, the excess recoverable tax will be carried forward to subsequent tax periods, and can be used to offset against the payable tax or penalties, or they can apply for a refund later at any point in time,” the company’s website says.
If you decide to claim your excess VAT back, an option will be available on your tax return to request a refund. You should confirm you want a refund.
After the VAT Return is submitted, you are required to complete the VAT refund application ‘Form VAT311’, according to Tally, by logging in to the FTA e-services portal, and then selecting VAT Refunds and following the necessary steps.
The refund form will be processed within 20 business days of submission, Tally says.
You will receive an email notification from the FTA informing you of the result of your application. Once your claim is approved, the amount will be refunded within five business days. You will receive a confirmation email on the refund.