VAT refund for UAE nationals

The Federal Tax Authority has set three requirements and procedures for UAE nationals to refund Value Added Tax incurred on new residences.

dubai — The UAE’s Federal Tax Authority (FTA) has set three requirements and procedures for UAE nationals to refund value added tax incurred on new residences.

The conditions state that in order to refund VAT, applicants must be a UAE national; the monetary cost in question must have gone towards financing the construction of a new residence, set to be used exclusively as a residential unit for the applicant and/or their family; and the refund only includes the money spent on establishing the unit, such as the amounts paid as building materials.

The FTA explained that the request must be submitted within 6 months from the completion date of the construction project, which precedes the date of occupancy of the building, or the date of issuance of a certificate of completion for the building by the competent authorities, or another date determined by the FTA, whichever comes first.

“The authority has been providing transparent standards, procedures and mechanisms to ensure seamless procedures for citizens looking to recover VAT incurred on the construction of new residences. This, in turn, leads to achieving the vision of our wise leadership to develop a modern, stable housing system in the UAE,” said Khalid Ali Al Bustani, director-general of the FTA.

The authority confirmed that no fees apply on requests for VAT recovery on the construction of new housing units, noting that there are fees charged by the accredited Verification bodies in return for the services they provide.

The FTA underlined three main criteria for the expenses in question: said expenses must be spent to finance the construction of a new home, set to be used exclusively as a residential unit for the applicant and/or their family; contractor services must be indispensable to the successful completion of the construction project (these include builders, engineers, architects and any other similar services); and the products used must be of the variety usually used by contractors on construction projects, excluding furniture and appliances.