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The UAE Cabinet has decided to apply value added tax (VAT) refund system for tourists, consolidating amid retail outlets with the tax refund points, along with the efforts and attempts of government in order to accomplish the implementation of the tax system in United Arab Emirates, effectually. VAT consultants Dubai – considering the press statement, this new refund tax system will help in growing the tourists’ sector of UAE and will also help in maintaining its position as one of the best global destinations for tourists. Tax Refund System – Press StatementThe press statement also added that the implementation of the new tax refund system in UAE - beginning the fourth quarter of 2018, collaborating with the international company specialized in the services of tax recovery. VAT submission – the tourists (non-resident) will be eligible for refunding VAT on purchases made at retailer’s participation, providing that such products and goods won’t exempt from the new tax system – through designated refund outlets.
New regulation on VAT in UAE – the tourism sector is directly contributing to the local economy. Also, the number of passengers via the airports of UAE reached around 123 million passengers last year and the whole contribution of the tourism sector in the GDP of the country reached 11% last year, which is equivalent to Dh154.1 billion in UAE. Read More: VAT Refund System for Tourists in UAE is at its Final Stage
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The retailers in the UAE believe that there shouldn't be VAT (value-added tax) at a wholesale level and it must be removed in order to make the industry better once again. Jewellery shoppers and sellers in UAE will get some relief if the government put an ease on the VAT (value-added tax) charges at wholesale level; especially on deals like diamond and gold. Though it totally depends on the retailers now to show the amount of savings from the wholesalers that will be passed on to the consumers. The industry sources also say that only a little bit of cost-benefit could boost the sentiments of shoppers since the past four months had been quite difficult for them as the VAT registration in UAE has been also announced recently. The managing director of International at Malabar Gold & Diamonds, Shamlal Ahmad says that he is hopeful that these new directions will help in keeping Dubai competitive and better when it comes to the prices of gold. VAT Charges at Wholesale Level – Government's Actions The gold industry sources were optimistic that the government of UAE will take some steps for the VAT structure. Particularly, they highlighted that with VAT and 5% import duty on the jewellery, shoppers who've had price benefits from purchasing gold in UAE have lost their charm. The same applies to both local buyers and visitors who want to purchase diamond or gold jewellery. However, the government finally took an action to protect the jewellery industry of Dubai which took a long time to build up and come to this point. According to the general manager at Sky Jewellery, Cyriac Varghese, the industry will wait for more clarification from the UAE VAT expert team on VAT benefits at a retail level. However, he believes that the cabinet review shows that the government has eradicated a complex structure – involving goldsmiths, manufacturers, and bullion suppliers along with retail suppliers. Though the draft also conveys that there is no major benefit which has been passed on to the customers and shoppers directly. The chairman of the Dubai Gold & Jewellery Group, Tawhid Abdullah stated that the government's move provides only a few benefits however, it ensures that soon UAE will regain its competitiveness globally in the diamond, gold, and jewellery industry. According to the FTA (Federal Tax Authority), the Emiratis will have the right to recuperate the value added tax in UAE when building their own places to live in. However, three requirements have been set by the FTA along with a proper procedure for the citizens of UAE so that they could get a refund for the VAT which is going to be charged on new abodes. The conditions for refunding VAT are as follows:
VAT Refund Process An all-inclusive guide has been also released by the FTA – clarifying the whole UAE VAT refund procedure as it is also published on their official website. The authority clarified in a press released that the citizens of UAE have the total right to recuperate VAT when building their own homes. They also added that the citizens should submit a request in order to recover the tax which is incurred on the cost of residence’s construction from the FTA. However, there is a condition. The request should be submitted within the time period of six months – before the construction project gets completed, preceding the occupancy date of the residence or the date when the certificate of residence or a building’s completion gets issued by the proficient authorities or another date which is decided by the FTA. Soon, all accredited verification bodies will be announced by the authority on its official website as the government is also providing online UAE VAT registration system. An official document will be issued under the name of Verification Report. The Verification Report will show the total amount of all paid taxes versus the amount that is recoverable. Then, it will be sent to the FTA within the 15 days (working days) before the issuance date of invoices. However, the FTA can still take up to almost 20 days for proceeding the further process and 5 extra working days will be also required for refunding the recoverable amount of money to the applicant. Also, it is confirmed by the FTA that there will be no fees on the requests for the recovery of VAT — for the construction of new residential units. FTA also highlighted that accredited verification bodies might charge some fees in return for their provided services. Also Read About: VAT Refund System for Tourists in UAE 10 Year Residency Visas for Investors and Specialists in UAE |
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