Federal Tax Authority begins accepting requests for refunding input tax incurred on operating mosques as per their operation start date

The Federal Tax Authority (FTA) has begun accepting refund requests for Value Added Tax (VAT) incurred on operating mosques via its EmaraTax digital tax services platform, in line with the Cabinet Decision on Refund of Input Tax Incurred on the Construction and Operation of Mosques and the Ministerial Decision in that regard, which has gone into effect and applies to all mosques around the UAE.

Refund requests must be submitted within the set deadlines, in accordance with the date when the mosque in question started being operated by the applicant who submitted said request.

In a press statement issued today, the FTA indicated that with regards to requests to refund VAT collected on building and operating mosques, the Decision specified the period from April to September 2023 where the FTA will receive tax refund requests on the operation of mosques that began operating before 1 January 2022, covering the years 2018 to 2022. Meanwhile, between October and December 2023, the Authority will be receiving tax refund requests on the operation of mosques that began operating on or after 1 January 2022, covering the year 2022.

The Authority went on to explain that all mosques must submit tax refund requests on their operation for any given year after 2022 between January and April of the following year.

“Back in November, the Federal Tax Authority launched a mechanism to recover the Value Added Tax incurred on building and operating all mosques around the UAE with a simple, straightforward procedure on the EmaraTax platform for digital tax services,” said FTA Director General His Excellency Khalid Ali Al Bustani. “The procedure is in line with criteria specified in the Cabinet Decision in this regard, which can be viewed on the FTA’s website, and outlines the conditions for submitting applications, the specific expenses that can be recovered when it comes to building and operating mosques, and the documents required. Furthermore, to facilitate and expedite the refund process, a Ministerial Decision was issued specifying timelines for submitting applications based on the completion date of the mosque’s construction.”

“As part of the Authority’s policies to raise awareness about the developments and continuous updates to the tax system, a guide was issued to explain the procedures for recovering VAT on the construction and operation of mosques on the FTA website,” H.E. added. “The guide includes a detailed explanation on all matters related to tax recovery on building and operating mosques, including the conditions to be eligible for refund, the required documents, recoverable expenses and the online procedures to seamlessly issue a refund.”

The FTA Director General called on all stakeholders to read the Cabinet Decision and the Ministerial Decision issued in this regard, as well as the guide, which includes ample information about the procedures and timelines for receiving refund requests.

The Federal Tax Authority clarified that according to the Cabinet Decision, certain conditions need to be met in order to request a refund on input tax incurred on operating a mosque, including that the operator has the right to request a refund of the input tax for goods or services directly related to the operation or maintenance of the mosque, provided that it is not related to any commercial facilities in connection with the mosque. Furthermore, the mosque must be registered as a mosque with the competent authority, and the operator must hold a written fixed-term permission to operate the mosque issued by the competent authority and valid for the period for which they are applying for a refund.

The Authority outlined the documents required to complete the application for a refund on input tax incurred on operating a mosque, namely, a copy of the Emirates ID or passport, bank account certificate, chart of the expenses incurred for operating the mosque, and a copy of the five highest tax invoices.