The UAE Federal Tax Authority (FTA) has published a user guide titled ‘VAT Refund for Exhibitions and Conferences’ following the UAE Cabinet’s decision entitling facilities operating in the exhibitions and conferences sector to a refund of VAT imposed on the services provided to international customers.
The guide provides information on the:
- mechanism to claim a VAT refund
- licensing process for suppliers of exhibition and conference services
- registration requirements for international customers
Conditions to be satisfied to qualify for a refund
- The services supplied to customers fall within exhibition and conference services, examples of such services include situations where: the right to access, attend or participate in an exhibition or conference is granted, or the right to occupy space for conducting an exhibition or conference is granted;
- The recipient of exhibition and conference services does not have a place of establishment or a fixed establishment in the UAE;
- The recipient of the services is not registered or not required to be registered for VAT in the UAE;
- A written declaration has been obtained from the recipient confirming that the recipient does not have a place of establishment or a fixed establishment in the UAE in addition to the recipient no requiring to be registered for VAT in the UAE (Please refer to Appendix 3 of the user guide);
- The recipient has not paid any VAT amount to the supplier; and
- The supplier holds a license from the FTA for the scheme to be applicable as outlined in the user guide.
Mechanism to claim a refund
Assuming the aforementioned conditions are fulfilled, the supplier can request a VAT refund by submitting a VAT return related to the tax period in which the date of supply for exhibition and conference services was triggered. Additionally, the supplier needs be aware of the following points:
- Retain the original declaration provided by international customer;
- Provide the international customer with a tax invoice stating the applicable VAT with same amount listed as a VAT refund, highlighting that the supply falls under the special VAT refund scheme;
- No VAT is to be collected from an international customer;
- Report the VAT charged on the services in the relevant tax return. The supplier can claim a VAT refund by mentioning the amount (equal/ less than the VAT charged) in the adjustment column for the relevant emirate in Box 1 of the return; and
- Documents received and issued under the refund scheme should be retained for a period of 5 years from the end of the tax period in which the license has expired.
Registration requirements for international customers
The guide specifically sets out that international customers are required to register for VAT where such customers are engaged in the activity of selling any goods or services during an exhibition or conference. In such cases, the customers would be ineligible to obtain exhibition and conference services under the VAT refund scheme.
It is also imperative to note that while the non-resident event organiser would still be provided with a license to provide a VAT refund to non-resident customers, they would not be able to apply for a VAT refund for themselves in relation to any expenses incurred on the leasing of space.
To discuss how this impacts your business, please contact us.