Federal Tax Authority Launches New Online Platform for UAE Citizens to Recover VAT on New Build Homes With Just Four Documents
The Federal Tax Authority (FTA) has launched a new and enhanced platform on its website to further streamline the process of recovering Value Added Tax (VAT) incurred by UAE citizens on the building of new homes.
The authority clarified that its new platform is characterised by ease of use through clearly defined steps and simple procedures. Citizens who qualify for VAT recovery on new-build homes will receive an email with a request to submit the necessary documents to complete the processing. After verification of the documents, the citizen is notified of their entitlement. If the refund amount matches the tax invoices provided, then – following final approval - the refund amount is transferred to the applicant’s bank account.
In a press statement issued today, the Authority announced that the new platform has been equipped in accordance with the latest standards to ensure efficiency, speed, ease, and clarity of procedures. The FTA revealed that it had conducted a series of consultation meetings with UAE citizens seeking to recover VAT incurred on building new homes, as well as Tax Agents. The meetings sought to gauge the participants’ opinions and experience with the old tax reclaim procedure, where their input was taken into account with the design of the new platform.
The Authority explained that the platform’s most notable new feature is that it allows applicants toapply for the VAT refund on newly built residences by UAE nationals online by using the e-Services feature on the FTA website, instead of having to mail the applications, as was the previous procedure. It noted that this will both save time and expedite the VAT recovery process.
Furthermore, the number of original documents that need to be submitted with the application has been reduced to just four documents, the FTA asserted, citing contractor/consultant authorisation and passport as examples of documents no longer required for the process. The application form itself has also been simplified.
The four documents that now need to be submitted with the application are: a copy of the applicant’s family book, a copy of the applicant’s Emirates ID, a building permit included in the certificate of completion issued by the Municipality, , and a document indicating the date from which the building has been occupied (e.g. an invoice for setting up electricity and water services).
The FTA’s statement asserted that the new platform offers faster and easier procedures – particularly for applications that include an expenses certificate from a housing programme that adopts the Authority’s procedures and provides the required expenses data. Emirates Development Bank is the recognised agency for the time being but the FTA is working to expand the list of housing programmes that implement the procedures required by the Authority in order to increase the number of citizens who benefit from this service.
FTA Director General His Excellency Khalid Ali Al Bustani said: “Launching the online platform to recover VAT on the construction of new homes for UAE citizens is part of the Authority’s strategy to provide best-in-class services and continuously revise executive procedures for tax legislation to ensure efficient performance, facilitate procedures, and achieve customer satisfaction among citizens, residents, and visitors.”
“The FTA is committed to engaging all those involved in developing tax processes. With that in mind, we set out to consult with citizens who have recovered – or are looking to recover – the VAT they paid for building their new homes, as well as with Tax Agents. Their views and experience with the old procedures were taken into account in developing the platform,” H.E. added.
“The Federal Tax Authority welcomes and values feedback from customers,” H.E. Al Bustani asserted. “The new online platform was launched to implement the vision of our wise leadership to develop a modern housing system for UAE citizens, and provide them with stability and a high quality of life. The Authority sought to ensure all procedures on the new platform were clear, transparent, and simple, speeding up the process of reclaiming VAT for UAE citizens who are legally eligible to do so.”
“The Authority collaborates with housing programmes that apply its procedures and required expenses data to reduce the requirements for processing requests from citizens looking to recover VAT incurred on the construction of new homes, where these entities provide the necessary assurances for applications,” H.E. explained. “The FTA is working to expand the list of housing programme it collaborates with on this projects to allow more UAE nationals to benefit from the ‘fast processing’ service the new platform offers.”
In their meetings with the FTA representatives, Tax Agents said they were happy with the facilities the new platform offers, stressing that the programme to allow UAE citizens to recover VAT incurred on building new homes has had tremendous positive results since it was introduced in 2018. It has helped increase tax compliance among suppliers and those involved in the contracting and construction sectors, most of whom developed their administrative and accounting systems to be able to provide the required documents after their commitment to implement tax legislation.
The Federal Tax Authority called on citizens wishing to recover the taxes they incurred on the construction of their new homes to review the guideline the FTA had issued this month (January 2020), which are available through the FTA official website. The manuals provide a simple yet comprehensive explanation of the steps that need to be followed to locate, fill, submit, and track the VAT recovery request form.
The Authority asserted that UAE citizens who build their homes have the right to submit a request for a refund of the VAT, with this request needing to be received by the Authority within six months from the date of completion of the newly build residence..
The FTA explained that applications that include an expenses certificate from a housing programme that details the required expenses data are processed more quickly. The Authority urged citizens submitting VAT refund requests to verify the accuracy of the information and data that are included in these requests to ensure all procedures are completed within the specified timeframes.
FTA statistics reveal that the total number of requests submitted by UAE citizens to recover VAT on the construction of their new homes has reached 1,474, allowing citizens to recover AED 84.07 million. This marks a significant increase from the previous year, where the FTA received 539 applications claiming AED 23.74 million that were approved by end of June 2019.
Federal Tax Authority
By virtue of this Federal Law by Decree a public federal authority shall be established under the name of the Federal Tax Authority. The headquarters of the authority shall be located in the city of Abu Dhabi. The authority shall be in charge of managing and collecting federal taxes and related fines, distributing tax-generated revenues and applying the tax-related procedures in force in the UAE.
The authority shall be managed by a board of directors chaired by the Minister of Finance and a sufficient number of members to be appointed and remunerated by a Cabinet resolution, based on the chairman’s nomination. The authority shall have an independent annual budget that shall be deemed as public funds and exempted from all taxes and fees.