The VAT Refund Scheme For Expo 2020 Participants has been introduced by FTA. Participants in Expo 2020 can claim a VAT refund incurred on expenses.
The Federal Tax Authority (“FTA”) has issued Cabinet Decision no. 1 of 2020 (“Cabinet Decision”) on the Refund of VAT on Goods and Services for countries and organizations participating in Expo 2020 Dubai. The Cabinet Decision cancels Cabinet Decision no. 1 of 2019, which was issued earlier by the FTA on the VAT Refund Scheme For Expo 2020 Participants. In the Cabinet Decision, the FTA clarifies in more detail which participants are entitled to a VAT refund and which expenses are subject to the VAT refund.
These changes may have an impact on the participating countries or intergovernmental organizations of the Expo 2020 (“Participants”) which will take place as of October this year.
Who can claim a VAT refund for Expo 2020 Dubai?
The UAE government has introduced a separate VAT refund application process for the Participants. The Participants may apply for a VAT refund on the input tax incurred on the import of goods or services and for expenses directly related to the Expo 2020 Dubai.
The Participants can apply for a VAT refund for expenses in direct connection with Expo 2020, for example:
- VAT incurred on the construction, installation, alteration, and dismantlement of the exhibition space for the Expo 2020.
- VAT incurred on goods and services for the operation, presentation, and events within the Expo 2020 Dubai site. Some of the significant changes in the Cabinet Decision are:
- It is added that the office of the official participant may apply for a VAT refund for expenses in connection with all operations, services, and activities provided for the purpose of participation in Expo 2020 Dubai, whether located within or outside the boundaries of the Expo 2020 Dubai site.
- The Bureau Expo 2020 Dubai provides the list to the FTA of the Participants eligible for the VAT refund.
Based on the changes in the Cabinet Decision, the FTA extends the scope for VAT refund for Participants and clarifies the VAT refund application process with the Bureau Expo 2020 Dubai.
For whom is it relevant?
The update is relevant for the countries that have established a representative office in the UAE for the organization of their Expo 2020 site. Many of the Participants have already started the preparations of the Expo 2020, for example with the construction of their Expo 2020 site. In the preparation process, expenses may have been incurred on which local VAT is paid by the Participant.
The Participants should:
- Consider the VAT refund possibilities in order to avoid that VAT paid on goods and services does not become a cost-increasing factor. In addition, a detailed refund eligibility analysis needs to be conducted with utmost care. Error or misinterpretation during the refund request may lead to financial and reputational risks for the participants.
- Assess the method of applying for the VAT refund, as it depends on whether you are eligible for VAT registration in the UAE:
- If you are not eligible for VAT registration, then you can apply with the Bureau Expo 2020 Dubai for a Certificate of Entitlement and VAT refund.
- If you are eligible for VAT registration, then you must register for VAT and apply for the refund through your periodical VAT return.
Documents required for a claim of VAT refund by Expo 2020 participants
Essential documents to be maintained by Expo 2020 participants with respect to the tax refund claim are below:
- Expo license
- Certificate of entitlement for applicable participants
- Underlying valid tax invoices and other supporting relating to the amounts reported in the VAT return or refund application
- Customs documents relating to the import of goods
- Documents that prove the employment of and relationships with staff/beneficiaries of participants
- Bank account validation letter from the bank, in case of refunds
Apparently, maintenance of additional documents can be required by the Bureau Expo 2020 Dubai or FTA on review by them on a case-to-case basis.
Why choose SAB for your Expo 2020 Dubai activities?
With the knowledge of serving various clients in connection with Expo 2020, SAB Auditing can offer to you value-adding customized consultancy services.
We can support you in several compliance activities relating to Expo 2020, such as obtaining a license, registration with FTA, determining the eligibility of input tax recovery, application for Certificate of Entitlement, VAT returns, Submission of VAT refund application, correspondences with regulatory authorities and timely completion of respective documentations.