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VAT Refund for New Residences for UAE Citizen

VAT Refund for New Residences for UAE Citizen

WHO IS ELIGIBLE ?

The Claim can be made only by a natural person who is a UAE national.

WHAT IS REFUNDABLE ?

Expense must relate to a new building which is used as a residence of the applicant and his or her family

DOCUMENTS REQUIRED ?

Following documents required
  • Copy of Family Book
  • Copy of Emirates ID
  • Copy to prove building is occupied
  • Construction contract
  • Certificate of completion from the municipality
  • Tax Invoices
  • Any other documents / information if required by tax authorities.

WHEN SHOULD REFUND REQUEST TO BE SUBMITTED ?

Within 12 months from the date of completion of newly built residence.

VAT Implementation – 3 Phase Process

3process of vat implementation
3process of vat implementation

Phase 1: Impact Assessment

  • Perform detailed analysis of end-to-end business transaction flows
  • Perform walkthrough of the sales/accounts receivable cycle and purchases/accounts payable cycle and identify VAT risk areas.
  • Mapping transaction for VAT enablement (tax mapping)
  • Provide report on VAT compliance needs.
  • Phase 2: VAT Implementation and Training

  • Review existing IT system and assess their suitability for VAT enablement.
  • Review system design and monitor the implementation of the recommend changes to IT systems.
  • Work with inhouse IT team/Vendors to finalize and identify the customizations necessary to be made to IT system to ensure that system meets UAE VAT law requirements.
  • Conduct a function -specific VAT workshop to personnel in preparation to meet the VAT compliance obligations.
  • Phase 3: Compliance Assistance

  • Assist in VAT registration
  • Guidance on first VAT return filing and related documentation and representing tax authorities on VAT issues.
  • Provide Periodic VAT updates
Posted in VAT

ULTIMATE BENEFICIAL OWNER (UBO)

ULTIMATE BENEFICIAL OWNER (UBO)-KUDOS PRS

Regulation of Procedures relating to Real Beneficiaries – Cabinet Decision No. 58 of 2020

On 24th August 2020, the UAE Ministry of Economy issued a Cabinet Resolution No.58 of 2020 on the “Regulation of Procedures Related to Real Beneficiaries”.

Who has the Applicability of this Resolution?

    • It is applicable to all legal entities licensed or registered in the UAE including commercial free zones and
    • It excludes companies that are wholly owned by the federal or local government and its wholly owned subsidiaries and financial free zones (Abu Dhabi Global Market – ADGM and Dubai International Financial Centre – DIFC).

    What are the Registers to be maintained?

      • Register of Shareholders
      • Register of Ultimate Beneficial Owners (UBO Register)

    Time limit for creation / submission / updating of UBO information?

    The legal person shall create and maintain an UBO Register within 60 days from:

      • Date of publication of this Resolution which is August 24, 2020 or
      • The date of the registration (in case of new company)

    In case of any changes, legal person shall update the Register with in fifteen (15) days from the date of being aware of the change.

    Who is the Ultimate Beneficial Owner of the Company?

    • The natural person who owns or finally controls the company directly or indirectly through:
        • Holding 25% or more equity of the company
        • Having 25% or more voting powers of the company
        • Appointing or dismissing most of the directors of the company.
    • If more than a person is owning the shares or controlling the company, then all of them shall be treated as beneficial owners.
    • If UBO is not known, or there is a suspicious about the UBO, then Natural Person who exercises control over the legal person (through other mean) shall be deemed beneficiary
    • If there is no UBO for the legal person in accordance with the above, the UBO shall be deemed to be the natural person who occupy the senior management position.

    Non-compliance

    A number of administrative sanctions may be imposed on any violations of the cabinet resolution.

    KUDOS PRS CHARTERED ACCOUNTANTS

VAT Refund On New Residence

vat refund on new residence
  • VAT refund is available for newly constructed residential building in UAE
  • A natural person who is a UAE National is entitled to claim such VAT refund
  • New residence must be used solely as the residence of the person or person’s family
  • Claim must be lodged with the FTA within 6 months from the date of completion of the new building
  • VAT will be reclaimed on building materials and all services incurred for the completion of the building
  • VAT refund claim is subject to conditions, restrictions and procedures prescribed by FTA

استرداد ضريبة القيمة المضافة للمساكن الجديدة

  • استرداد ضريبة القيمة المضافة متاح للمباني السكنية المشيدة حديثًا في الإمارات العربية المتحدة
  • يحق للشخص الطبيعي المواطن بدولة الإمارات العربية المتحدة المطالبة باسترداد ضريبة القيمة المضافة
  • يجب استخدام المسكن الجديد فقط كمسكن للفرد أو لعائلة الشخص
  • يجب تقديم المطالبة إلى الهيئة في غضون 6 أشهر من تاريخ الانتهاء من المبنى الجديد
  • سيتم استرداد ضريبة القيمة المضافة على مواد البناء وجميع الخدمات المتكبدة لاستكمال المبنى
  • تخضع مطالبة استرداد ضريبة القيمة المضافة للشروط والقيود والإجراءات التي تحددها الهيئة الاتحادية
  • للضرائب

Know More About Jabel Ali Offshore Company

KNOW MORE ABOUT JABEL ALI FREE ZONE COMPANY
  • JAFZA offshore companies are not physically present in the UAE.
  • Shareholders are not eligible for resident visas.
  • Offshore companies will have a certificate of incorporation as proof of registration.
  • Company will not get a trade license and hence not allowed to do any business within the Emirates.
  • Offshore companies are out side the purview of taxation.
  • 100% return of profit
  • Offshore companies can own properties in designated areas.
  • Offshore companies can hold shares in UAE freezone companies and LLCs. Holding companies are easier to facilitate transfer of shares or sale or succession.
  • Offshore companies can conduct business outside UAE.

Who Must Register For Excise Tax?

Who Must Register For Excise Tax ? | TAX Advisory Services in UAE

The Federal Decree-Law No. 7 of 2017 on Excise Tax stipulates that businesses/ persons that are engaged in any of the below activities must register for tax.

  • Import of excise goods into the UAE;
  • Production of excise goods in the UAE;
  • Release of excise goods from a designated zone into the UAE;
  • Warehouse Keepers, in certain cases;
  • Stockpiling of excise goods for business purpose in the UAE in certain cases where excise tax has not previously been paid on the goods in the UAE.

Know More About Excise Tax In UAE

know more about excise tax in uae
  • Excise tax is an indirect tax where business entity collects excise tax from customers and pays to the Government.
  • Excise tax is levied on specific goods which are harmful to human health or the environment.
  • Excise tax is levied with an intent to reduce consumption of specific goods and simultaneously to raise government revenue to use for public services.
  • Excise tax is levied on Tobacco products, electronic smoking devices and tools, liquids used in electronic smoking devices and tools, carbonated drinks, sweetened drinks, and energy drinks.
  • Excise tax rate ranges from 50% to 100% on price of excise products.
  • Business entities with the following activities are obligated to register and comply with excise tax law:
    • Import, production, release of excise products
    • Warehouse keepers and stockpiles of excise products in certain cases
  • Business entities who deal with excise products must comply with:
    • Register with Federal Tax Authority (FTA)
    • collect excise tax from customers
    • Pay collected tax to the government
    • File excise tax returns with FTA
    • Comply with excise tax regulations
  • Non-compliance with excise law attracts fines and administrative penalties
Posted in TAX

Highlights Of Clarification On “Zero Rating of Export Services”

Highlights of Clarification On “Zero Rating of Export Services”

Highlights of Clarification On “Zero Rating of Export Services”

  • The Clarification provides some relaxation to foreign companies as No VAT to them by UAE suppliers just because they have a branch in UAE which are not related with the supplies HO by UAE suppliers.
  • It is also clarified that in determining the location of recipient, only physical presence of the recipient during the periods in which supplier perform services needs to be taken into account
  • The UAT does not recognize any other state as an “implementing state” for the purpose of VAT is also cleared through the clarification.

AMENDMENT TO IFRS 16 FOR COVID-19 RELATED RENT CONCESSIONS

Amendment to IFRS 16 For Covid-19 Related Rent Concessions|KudosPrs

Amendment to IFRS 16 For Covid-19 Related Rent Concessions

  • The IASB considered a “Practical expedient” to PROVIDE RELIEF for LESSEES (not for LESSORS) from lease modification accounting for Rent Concessions, in the form of Rent Holidays or Rent concessions for an agreed timeframe.
  • Amendment to IFRS 16 – Leases: Issued in May 2020.
  • Applicable for annual reporting periods beginning on or after June 1, 2020.
  • Early application is permitted, including in financial statements not authorized for issue at February 28, 2020.
  • Rent concession received by lessees should be a direct result of Covid-19 pandemic. “Practical expedient” allows LESSEES to elect NOT to carry out an assessment to decide WHETHER a Covid-19 Related Rent Concession is a Lease Modification or not.
  • Three conditions for applying “Practical expedient”
    • Consideration for the lease being substantially the same or less than the original consideration immediately before the concession;
    • Concession relief for lease payments originally due on or before June 30, 2021; (if the reductions in lease payments extend beyond June 30, 2021, the rent concession in its entirety would not be within the scope of the practical expedient) and
    • No substantial change to other terms and conditions of lease contract.
  • A lessee shall apply retrospectively, as an adjustment to the opening retained earnings or other component of equity, as appropriate at the beginning of annual reporting period in which the lessee first applies the amendment.
  • Disclosure requirements:
    • Application of the practical expedient
    • Amount recognized in statement of comprehensive income

Eligibility and Benefits of holding Tax Residence Certificate

Eligibility and Benefits of holding Tax Residence Certificate in UAE

TAX Residence Certificate in UAE

  • Tax Residence Certificate can be obtained by an individual who is resident in UAE for period more than 180 days and companies which are registered and operates in UAE for minimum one year.
  • Offshore companies cannot obtain Tax Residence Certificate . However offshore companies can apply for  tax exemption certificate.
  • By holding tax residence certificate in UAE, an individual or company can use advantage of double taxation treaties.
  • Tax residence certificate helps to overcome the difficulties relating to cross-border trade and investment flows
  • A foreign national individual can avoid income tax by identifying his tax residency status.