Get Ready to seek VAT refund for purchases in Expo 2020!
Recently, the Federal Tax authority (FTA) of UAE has urged all the participants of Expo-2020 to avail the benefits of “Value Added Tax (VAT) Refund Scheme”. This scheme applies to all the goods and services relating to the Expo-2020. This scheme has been introduced by the government in line with the cabinet decision No. 1/2020.
Key Highlights of this Scheme
The FTA has issued comprehensive guidelines pertaining to the entire process of VAT refund. Under this scheme, 5 type of taxes are refunded, which are as follows-
- In the first category, the tax incurred by the participants of Expo-2020 during construction, installation, alteration, decoration, and dismantling of their exhibition space is included.
- The second category deals with the VAT incurred by official participants on goods and services directly relating to the work or activities of the official participant’s exhibition space. Further, any tax liability arising through presentation or any event of similar nature are also eligible for refund under this scheme.
- In the 3rd category, the VAT incurred by official participants on goods and services related to the actual operations of the official participant is included. However, it is essential that the value of each goods and services should exceed 200 AED for availing the benefit under this category.
- The fourth category relates to the tax liability incurred through the operations, services and activities for participation in Expo 2020. The refund will be provided, irrespective of the fact, whether it is located in or outside the boundaries of the Expo site.
- The fifth category relates to the VAT incurred while importing the goods for personal use of the official participant’s section, commissioner general, section staff and the beneficiaries.
As per the guidelines, for availing VAT refund under first 2 categories, the official participants must have a certificate of entitlement issued by Expo 2020 Dubai. However, this certificate is not required while applying for the refund under the other 3 categories.
In the guidelines, the eligibility criteria for the certificate of entitlement, detailed procedure, and the application form for the same has been clearly provided. The guidelines also clarified the refund mechanism as well as the special case for imported certificate of entitlement.
The FTA has also set up a special mechanism in association with the Bureau of International Participants to facilitate better coordination and fast processing of VAT refund applications of Expo participants. All the queries pertaining to the refund status are resolved expeditiously. The VAT registration process is handled by the FTA Registration Department. The priority is given to the international participants.
The UAE government is taking all possible efforts to make this 6 month long global event a huge success, and this VAT refund scheme is one such initiative in the right direction. The VAT has been classified into 5 categories for the purpose of refund and for the first 2 categories, certificate of entitlement is mandatory whereas this condition is exempted for the last 3 categories.