Expo 2020 Dubai, the international business exhibition is going to be hosted in Dubai from 20th October to 10th April 2021.
Participants of the 2020 Expo. have queries and are worried about refunding the VAT paid in UAE during their participation in 2020 Expo.
His highness Shiekh Mohammed Bin Rashid Al Maktoum issued on 16 Jan 2019 Cabinet Decision No. (1) of 2019 on the Refund of Value Added Tax Paid on Goods and Services Connected with Expo 2020 Dubai. In accordance with this Cabinet Decision No. 1 of 2019 Official Participants of the Expo 2020 are able to claim a refund of VAT incurred by them on the import or supply of certain Goods and Services.
The Federal Tax Authority which is the Governing Authority for VAT in UAE, announced some relaxations to the official participants of 2020 Expo Dubai in relation to VAT.
Before exploring the critical areas for the VAT refund, it important to provide clearance about some definitions so official participants will be able to understand the VAT refund process and the type of the refund eligible for them:
Who are the official participants of 2020 Expo?
Countries and intergovernmental organizations which have received and accepted the official invitation from the State to participate in the Expo 2020 Dubai engaged in a non-commercial capacity as an exhibitor. To date, around 190 nations from across the world have confirmed their participation.
What is Bureau Expo 2020 Dubai?
The Bureau Expo 2020 Dubai established by virtue of Decree No 30 of 2014 issued by the Ruler of Dubai shall be the governing body for the refund scheme.
How the official participant will be affected and how the refund process will work
Official Participants of Expo 2020 will be subject to UAE VAT provisions as they will be considered as mainland business and will be incurring VAT on Goods and Services connected to the Expo 2020 as per normal UAE VAT rules.
The general UAE Tax rules will not allow the official Participants to refund the VAT paid which are related to expo 2020 unless they are registered for VAT in UAE but cabinet 1 of 2019 in certain situations provides a Tax relaxation for the official participants so Official Participants are eligible to recover VAT on certain Goods and Services which were imported or acquired.
The application to recover VAT incurred can be made by one of the following methods:
- Where the Official Participant is registered for VAT, it may reclaim VAT via its UAE VAT return.
- Where the Official Participant is not registered for UAE VAT, the refund applications can be made through the Bureau by submitting a special refund application to the Bureau.
It should be noted that the Official Participant must register for VAT if the value of their taxable supplies or imports (for commercial or non-official purposes) in the UAE exceeds, or is anticipated to exceed, the mandatory registration threshold of AED 375,000.
What can official participants claim of the VAT paid:
Typically, a person may only recover VAT incurred in the UAE on Goods and Services, where the Goods and Services are used or intended to be used for making taxable supplies. Where incurred expenses do not relate to any taxable supplies made by the person, VAT is not recoverable.
Notwithstanding the above, Official Participants are able to reclaim VAT incurred on the import and acquisition of the following Four Categories of Goods and Services without the need to use them for making taxable supplies:
1- VAT incurred by the Official Participant on Goods and Services in direct connection with the construction, installation, alteration, decoration and dismantlement of their exhibition space;
2- VAT incurred by the Official Participant on Goods and Services in direct connection with the operation of their exhibition space and any presentation within the Expo 2020 site;
3- VAT incurred by the Official Participant on Goods and Services relating to the actual operation of the office of the Official Participant, provided that the value of each Good or Service for which a claim is made is not less than AED 200.
4- VAT incurred on import of Goods for personal use of the Official Participant’s Section Commissioner-General, Section Staff and the Beneficiaries
It should be noted that in order to be eligible to reclaim VAT on expenses under categories 1 and/or 2, the Official Participant must be in possession of a Certificate of Refund Entitlement issued by the Bureau.
IMPORTANT NOTE: Where a refund has been granted to the Official Participant in respect of any import of Goods, the Goods cannot be sold for Consideration or transferred free of charge without the prior consent in accordance with the procedures agreed upon between the FTA and the Bureau, and without payment of the Tax.
In addition to the above categories of expenses, where an Official Participant is registered for VAT in the UAE, it may be able to recover VAT on other types of expenses under the general VAT rules for recovering input tax – e.g. where expenses relate to making taxable supplies made by the Official Participant.
In respect of imports made by Official Participants, it should be noted that they may use the special TRN (Tax Registration Number) allocated to the Bureau, in coordination with the Bureau, where the goods fall under Categories 1 and 2, and they hold a Certificate of Refund Entitlement. Where the special TRN is used, no import VAT will be imposed in respect of the goods, and such goods should not be included in any refund application.
What is the Certificate of Refund Entitlement?
An Official Participant (both registered and not registered for VAT) must apply for a Certificate of Refund Entitlement before attempting to reclaim VAT on Goods and Services under categories 1 and 2. A certificate reference number will be provided to the Official Participant and must be referenced in all special refund applications concerning Goods and Services that fall under categories 1 and 2.
Eligibility Criteria for the Certificate of Refund Entitlement
In order to be eligible to apply for the Certificate:
- The applicant must be an Official Participant of the Expo 2020 in Dubai, holding a valid Expo 2020 trade licence number.
- Not more than 20% of the exhibition space or presentation is, has been, or is intended to be used for non-official or commercial purposes.
If the Certificate of Refund Entitlement is not granted to the Official Participant (for example, if more than 20% of exhibition space will be used for non-official or commercial purposes), the Official Participant will not be able to reclaim full amount of VAT in respect of Goods and Services under Categories 1 and 2. Instead, the Official Participant may need to consider if any VAT related to such Goods and Services may be recoverable under the general VAT rules applicable to VAT registered person
How Becker Advisors Accounting & Taxation can support you?
As a registered Tax Agency with FTA, our qualified registered tax Agents and consultants will ensure VAT compliance while participating in the 2020 Expo are fulfilled.
We will support you with respect to the following:
1. 2020 Expo Dubai trade license application and Emirates ID in case of applicant’s representative
2. Registration for VAT with the Federal Tax Authority
3. Support in filing the periodic VAT return and refund application
4. Compliance support in filing the Certificate of refund entitlement
5. Regular communication and follow up with the Bureau on your behalf
6. Providing you with latest updates in UAE VAT that are relevant to 2020 Expo
7. De-registration for VAT after completion of 2020 Expo
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- Tax Agent
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- FTA representation on your behalf.
- VAT return filling
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