VAT Refund on Goods and Services in relation to Expo 2020
Expo 2020 is expected to be a significant milestone in the history of the UAE. With over 190 participating countries this will be the “largest event ever staged in the Arab World” according to the Official Expo 2020 website. In order to facilitate the various participants contributing to this gigantic event, the Federal Tax Authority (“the FTA”) has issued Cabinet Decision No. 1 of 2019 (“the Cabinet Decision”) on the Refund of Value Added Tax (“VAT”) Paid on Goods and Services Connected with Expo 2020 Dubai and has published an accompanying “VAT Guide on Refund of VAT paid on Goods and Services Connected with Expo 2020 Dubai” in order to provide further details regarding its implementation.
Applicability of Refund:
According to the Cabinet Decision, Article (2), Refund of Tax is permitted as follows:
- The Official Participant may claim a refund of Tax where incurred on the import or supply of Goods and Services provided that the Goods and Service:
- Are in direct connection with the construction, installation, alteration, decoration and dismantlement of their exhibition space.
- Are in direct connection with the operations of the Official Participant’s exhibition space and any presentation within the Expo 2020 Dubai site.
- Related to the actual operations of the offices of the Official Participants, provided that the value of each Good or Service for which a claim is made is not less than the amount set by the Minister’s Decision.
Worthy to note that ‘Official Participant’ is defined per the Cabinet Decision as “Countries and intergovernmental organizations which have received and accepted the official invitation from the UAE to participate in Expo 2020 Dubai as an exhibitor” and the exhibition space allotted to the participant shall not be used in a commercial capacity by more than 20%.
The Official Participant is also allowed to claim a refund of Input VAT where incurred on the import of goods for personal use. This claim can be made either by the representative himself, his staff members or his family members.
Where a refund has been granted to the Official Participant in respect of any goods, they shall not be allowed to sell these goods for consideration or free of charge, unless prior consent has been obtained from both the FTA and the Bureau of Expo 2020 (“the Bureau”).
Application for Refund:
The claim for the refund shall be submitted to the Bureau in a specified form which will issue a certificate of refund entitlement, after conducting any necessary inspection required. Where the application is accepted, the Bureau shall then make a request to the FTA to refund the amount.
The certificate of refund entitlement shall not be provided in relation to purchases and imports of goods, if more than 20% of the exhibition space has been utilized for commercial or non- official purposes.
Overview of the VAT Guide:
The main purpose of the VAT Guide is to assist the official participants regarding the VAT Refund on Goods and Services, specifically in respect of the following:
- The conditions which must be met to be entitled to claim the VAT refund.
- The process to be followed to claim VAT.
- Information required to complete the relevant forms.
- Additional details on the registration requirements.
The most significant factors provided in the VAT Guide are as follows:
- To be eligible to apply for refund, the applicant must be:
- An official participant, holding a valid trade license number, and
- Should not use more than 20% of the exhibition space for non-official or commercial purpose.
The VAT Refund measure is a positive step by the UAE government that shall encourage greater participation in Expo 2020. By way of granting refund, the Government is effectively making all purchases and imports of goods and service tax free and thus attracting foreign investors.
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