How to get VAT Refunds on Exports in UAE

How to get VAT Refunds on Exports in UAE

Exports

When goods or services are supplied from UAE to a person located outside UAE, the supply is called an export. The location of the recipient can be the person’s place of establishment or fixed establishment.

Goods supplied within GCC

B2B Exports to GCC

Export of goods: place of supply is the other GCC State (e.g. KSA) and the customer is registered for VAT in that GCC State and the goods are exported outside the UAE-Outside the scope of UAE VAT

Are exports taxable?

Exports are considered as taxable supplies. However, they are zero rated, i.e. tax at 0% is applicable on exports. Additionally, the treatment of exports is based on certain scenarios. These scenarios can be divided as follows:

• Export of goods outside a GCC VAT implementing state
• Export of goods to unregistered recipients in a GCC VAT implementing state
• Export of goods to registered recipients in a GCC VAT implementing state
• Export of goods which require installation or assembly outside the state

Services-where the supplier has their place of residence

Exceptions: How to get VAT Refunds on Exports in UAE

• Place of supply of services relating to the installation of goods is where the service is performed
• Place of supply of services supplied to recipients who are VAT registered in another GCC State is that other GCC State unless the place of supply is the UAE for another reason
• Place of supply of services supplied by a person that is not resident in the UAE to a VAT registered business resident in the UAE is in the UAE
• Place of supply of restaurant, hotel and catering services is where they are performed
• Place of supply of real estate services is the location of the real estate.
• Place of supply of transport services is where the transport begins
• Place of supply of a means of transport to a person not registered for VAT in the GCC is where the goods are put at the disposal of the recipient
• Place of supply of transport services is where the transport begins
• Place of supply of telecommunications and electronic services is where the services are actually used and enjoyed by the recipient
• Place of supply of cultural, artistic, sporting, educational or similar services is where they are performed

Services – Reverse charge mechanism

When a VAT registered person imports services into the UAE will be subject to VAT if it is further purchased or services are used in the UAE, the VAT registered purchaser has to account for VAT in respect of those supplies

• Typically used for cross-border transactions to relieve a non-resident supplier from the requirement to register and account for VAT in the country of the purchaser

• The purchaser will account for VAT on its normal VAT return and he may be able to claim that VAT back on the same return, subject to the normal VAT recovery rules

Date of supply: When to account for output VAT

Basic tax point for goods

• Date of movement of goods in case of supply of goods with transportation
• Date on which goods made available to customer in case of supply not involving transportation
• Date of assembly/ installation supply of goods involving assembly or installation

Basic tax point for services

Date on which performance of service is complete.

Exceptions – Overriding the basic tax point

Receipt of payment or the date of a VAT invoice if earlier than the basic tax point

Continuous supplies & stage payments

The earlier of receipt of payment, the due date of payment shown on the VAT invoice or the date of the VAT invoice

Exports at 0% VAT: How to get VAT Refunds on Exports in UAE

A supply of services shall be zero-rated if all of the following conditions are met:

• the services are supplied to a recipient outside GCC State and who is “outside the UAE’’ at the time the services are performed;
• the services are not supplied directly to
• real estate situated in the UAE or any improvement to the real estate;
• moveable personal property situated in the UAE at the time the services are performed
• the supply consists of the facilitation of outbound tour packages, that is part of the service.

, “outside the UAE” includes a short term presence in the UAE (less than 1 month), or a presence that is not effectively connected with the supply.

A supply of goods shall be zero-rated if all of the following conditions are met:

Direct export – the supplier is responsible for arranging transport

1. Export of goods outside a GCC VAT implementing state.

• the goods are physically exported outside GCC or put into a customs suspension regime within three months of the date of the supply; and
• official or commercial evidence of export is retained by the exporter.

1. Export of goods to unregistered recipients in a GCC VAT implementing state
2. Export of goods to registered recipients in a GCC VAT implementing state
3. Export of goods which require installation or assembly outside the state

Indirect export – the overseas customer arranges for the collection of the Goods from the supplier in the UAE, who exports the goods himself or via agent.

Indirect Export of goods outside a GCC VAT implementing state: How to get VAT Refunds on Exports in UAE

• the goods are physically exported outside GCC or put into a customs suspension regime by the overseas customer within three months of the date of the supply;
• official or commercial evidence of export is provided by the overseas customer to the supplier,
• the goods are not used or altered in the time between supply and export;
• the goods do not leave the State in the possession of a passenger or crew member of an aircraft or ship

International transport of goods

The following supplies relating to the international transport of goods are subject to VAT at 0%:

• The services, including transport-related services, of transporting goods from a place in the UAE to a place outside the UAE or vice versa
• This includes transport through the UAE where either the origin or the final destination of the goods is outside the UAE
• Services supplied during the supply of transport services e.g. handling the goods
• Insuring, arranging the insurance or arranging the transport of goods

Can input tax be recovered on exports?: How to get VAT Refunds on Exports in UAE

As exports are taxable supplies, input tax can be recovered on supplies used to make exports. If the exporter makes domestic supplies also, the input tax recovered can be used to reduce their tax liability. If the exporter is dealing solely in exports, the exporter can get refund of the tax paid on inputs.

Are records of exports required to be maintained?

Yes, records of exports made are required to be maintained for minimum 5 years from the end of the year to which the invoices pertain.

For example: An Export Invoice issued on 5th January, ’18 should be retained till 31st December ’23.

Input Tax Recovery Conditions: How to get VAT Refunds on Exports in UAE

Input tax is the tax paid by a person on purchases or inward supplies.

Example:In January ’18, Jehan & Co, in Abu Dhabi purchases 10 desktop computers @ AED 1,000 each. On this purchase, Jehan & Co. pays VAT @ 5% of AED 500. In the same month, Jehan & Co. supplies 20 desktop computers @ AED 2,000 to a consumer. VAT @ 5% is collected by Jehan & Co. on the supply, amounting to AED 2,000.

Here, output tax payable by Jehan & Co. for the month of January ’18 is AED 2,000.

Input tax recoverable for the month of January ’18 is AED 500

Tax payable = Output tax payable – input tax recoverable

Hence, tax payable by Jehan & Co. for the month of January, ’18 is AED 2,000 (Output tax payable) – AED 500 (Input tax recoverable) = AED 1,500.

Here, as you can observe, the tax paid on purchase by Jehan & Co. can be used to reduce their output tax payable. Only the balance tax payable is required to be remitted to the Government.

Conditions for input tax recovery: How to get VAT Refunds on Exports in UAE

A registered business can recover the VAT paid on purchase of goods and services used for business purposes are subject to certain conditions.

) Recipient must be a taxable person and must be registered for VAT

2) VAT on the purchase must have been correctly charged by the supplier

3) The goods or services have been acquired for an eligible purpose

4) Recipient must receive and retain a tax invoice evidencing the transaction

5) The amount of VAT which the recipient seeks to recover must have been paid in whole or in part, or intended to be paid in whole or in part

6) Certain incurred VAT is specifically blocked from being recoverable as input tax regardless of whether the above conditions have been met.

Reach Accountant Online VAT Accounting Software

It is very essential that businesses use a software which will enable the task of maintaining records and managing accounts efficient. Businesses should carefully evaluate and decide a software which will help them in maintaining systematic and error-free accounts and records with compliance validation. The business software should be their instrument for compliance under VAT while helping them maintain their focus on the core business activities.

Need to upgrade to Reach Online VAT Accounting Software :

Reach Accountant software is well designed to match all the needs for successful running of the business. The software can be used in different industries ,traders ,manufacturers, retailers,  workshop ,business projects etc. It is an online VAT accounting software that can automatically manage your book of accounts, taxes, inventory, sales, purchases and more online quickly and securely. 

Benefits Of Reach Online VAT Accounting Software

Reach Online accounting software systems are rapidly evolving, giving business owners the ability to choose how and where they manage their finances. Whether at home or on-the-go, business owners are now able to execute administrative functions such as instantly viewing bank balances, tracking expenses, sending invoices ,supervising the work flow of branches through Reach online VAT Accounting Software thus making business more viable.There are many advantages of using an online accounting system including:

Reach online VAT accounting system can help you manage your business by improving your recordkeeping processes and give you the tools you need to analyze business results and make sound financial decisions.

• Online Access 24/7
• Cost
• User Friendly
• Technical Support
• Efficiency
• Analysis –
• Security and Accuracy
• Inter Connectivity of Branches:
• Opportunities
• Scalability

Top Features of the Reach OnlineVAT Accounting Software are:

• Accounting Management: All functions relating to accounts are inbuilt with the software. You can manage your Accounting Ledgers, Bank & Cash Operations, Purchase & Sales Estimates, Warehouse Allocations, Expense Recording, Expense Grouping, Payments – Part or Full, Journal Entries, Income and loss a/c, Balance sheets, Receipts – Part or Full, Contra Entries, Financial Reports, Day book.

• Tax Management: Our accounting Software automatically calculates the taxes relevant for every bill created. The Software is designed as per the government norms for calculation of VAT. It also has the option to add any number of taxes relevant to the business. In case of change in tax percentages a change it in the software on your own. All you have to do is add your tax percentage and our software will calculate the taxes automatically. This multiple tax scheme can also be applied to multiple products on a single purchase.

• Income Management: The Company can create Quotations then the same can be converted as a Sales order or Pro-forma invoice or Invoice. From Invoice you can create Receipts as well. Accountants will be able to know what payments have been received and what are pending in the reports. You can also set reminders for receiving payments.

• Expense Management: You can create Purchase Orders then the same can be converted as bill or payments. You can also create Debit notes for purchase returns. Accountants will be able to know which purchase bills have been paid and which are pending in the reports. You can also set reminders for making payments.
• Invoicing: Generates VAT compliant invoice of the company in the specified design as requested by the client or can choose from the available templates in the software. It also converts quotes to invoice .One of the features is the software can convert the Foreign currency invoices to base currency and further calculating the VAT at UAE standard rate.

·         Print Tax Invoice In Arabic: Reach software lets you print invoices in Arabic, English or both, as per the mandated guidelines of GAZT and FTA.

• Auditor View: Full-fledged Financial reports, Tax reports VAT reports, read process by auditor, with e-filing options, PF & ESI Reports, Tax Consulting Modules are some to be named.
• Check Post for VAT returns: As the software has been designed exclusively to aid individuals and entities to be VAT compliant in UAE, the set of rules and regulation laid by FTA (Federal Tax Authority) of UAE are embedded in the software. Hence any process error will be popped up by the application can be viewed .For instance wrong Tax Registration Number, incorrect taxable figure, wrong taxation period.
• Automatic Update on Tax legal Sections: As the Reach software are cloud computed software gets upgraded to update any revised tax laws and section if any in future.
• Computation Of VAT Returns: The software is inbuilt with all the detailed crucial information  on tax computation Tax Assesee can  fetch all the details of all the taxable transactions It lists down transactions which are included and excluded in the VAT return  calculate input tax, reverse charge and output tax to avail claim if any 

• Filing Of VAT Returns: The registered businesses in UAE are required to generate the VAT return File from their accounting software, login to the FTA’s e-tax portal and upload the return file. On the basis of the uploaded return file, the e-tax portal will validate the file and accordingly the details from the file will be auto-populated in the online return form. Reach VAT software is designed to ease the process of filing returns and comes under the purview of FTA prescribed set of rules and regulations.

• * VAT Reports etc.
• Calculate VAT automatically.
• VAT support in Sales, Purchase, Sales and Purchase returns, Journal entries.
• Generate Federal Tax Authority compatible tax reports.
• VAT Paid (charged by suppliers) and Vat Collection (Charged to customers) Analysis.
• Transaction wise details of VAT paid and VAT collected.
• Attach every Vendors/Customers VAT number and other details.
• VAT supported for Goods (stocked) and Service (non-stocked) items.
• Online application accounting.
• VAT Account Reconciliation, VAT Collection & VAT Paid analysis report.
• Report export to excel and other standard formats.
• VAT returns statement compatible with Federal Tax Authority standards.

Online accounting VAT software enables you to file vat returns, manage accounts and other business operations from any geographical area be it at the comfort of the house.

• Receipt: Receipts can either be manually entered or imported it in excel format easily.
• Payments: Payments can either be manually entered or imported it in excel format easily.
• Multi Company: Manage business through comfort of the smart phone.
• Tally Import: Tally files can be easily imported to Reach Software of various periods and manage business easily.
• Auditor’s Report: Full Financial Report are available,Read process by Auditor,Tax Reports,VAT Report with e-filing options,PF & ESI Reports,Tax Consulting Modules are some featuress mentioned.
• Mobile Application: Access business information through tabs and android smart phones, pick photos of expense vouchers and attach to expenses, daily profitability and other key reports can be viewed on phone.
• Bank Synchronization: Bank Statements can be imported in to Reach software through excel files.
• Security: There is complete security of data stored in the hard disk. Data can be accessed and control by creating access restriction. One time password facilities also ensures a check in the log in to the website. 

• Run Business from anywhere: The business can be run access data from anywhere at your comfort. Just like checking mails from the laptop or systems

• Free and Automatic Upgrades: At Reach Accountant you will be provided free services of upgrading the software frequently with new features and use it absolutely free 

• No investment in expensive hardware: The software is browser based. It just requires internet connection which can be connected to multi computers without using LAN and servers. 

• API: The client can integrate the existing software with Reach accounting application ,
• Automatic Data Backup: Reach stores all the data in servers offsite with regular backups. Hence business information is safe and secure

·         User Interface & Complexity:The software is designed to make its use friendly and easy,no cumbersome process to operate the application and software.

• Scalability:It is an VAT accounting software which can scale with your business needs. . Some software companies offer only one version of the product and some have progressive versions depending the business type or size. Reach Accounting software offers both integrated an entry level version as well as a feature rich version which you might not need for the current business processing but will definitely need in future for business development.

Top Two Features of the Reach Accounting Software 

• Outsourced Accounting: The software enables to finish the outsourced accounts in less than 30 minutes

• Real Time Accounting: Allows client to record sales and purchases online, while finalizing accounts that is checking the Audit trail, providing MIS reports, checking Tax reports, printing financial reports and filing taxes. 

Technology Used

Reach has implemented the latest technology Cloud Computing to handle  day to day business transactions just  a click away from your browser from any part of the world.

Cloud accounting software that is easily accessed online and an attractive option for large or small business owners. Companies that use cloud accounting require less initial server infrastructure to store data and don’t require IT staff to maintain or update the cloud accounting system. Get the spectacular benefits of cloud accounting as you seamlessly integrate with the powerhouse

Benefits of cloud accounting:

• Streamline billing and ordering processes
• Capture and store financial data to most accurately model and report on your finances
• Use Chatter to enable more effective collaboration across your organization
• Greater return on investment and real-time, multi-dimensional financial analysis