Did you know that UAE Nationals can request a VAT refund for a newly built residence in the UAE?

Any UAE National building a new residence in the UAE is likely to incur VAT on the construction costs. For this purpose, FTA has released VATGRH1 guide on ‘VAT Refund for UAE Nationals Building New Residence‘ to facilitate UAE nationals to obtain refund of VAT incurred by them on building a new residence. The refunds are processed by the authority after a process of thorough verification of submitted details by the applicant.

Note :

• The refund option is available only for VAT related to expenses incurred on the construction of a new residence for own use and not for any commercial properties.
• Where the Authority has repaid tax and following the receipt of such repayment, if the person used the building for rental or any other commercial purpose, then he will be required to repay the amount of the tax that was claimed by him.

The procedure for the application :

• Create an account on e-Services through eservices.tax.gov.ae
• Create a new taxable person account / special refund
• Apply for New Residence VAT Refund

The documents to be submitted for VAT refund claim :

• Copy of Family Book
• Copy of Emirates ID
• Construction contract
• Copy of property site plan
• Documentary proof to support ownership of the plot of land in the UAE
• Copy of the letter/certificate issued and stamped by your bank which includes the account holder’s name, bank’s name and the IBAN
• Certificate of completion from the municipality
• Document to prove building occupancy (DEWA bill)
• Any other additional document or clarification asked by authority during the verification of the application.

Deadline for the application :

The refund request must be sent to the FTA within 12 months from the date of completion of the newly built residence which is the earlier of the date-

• The date when the residence becomes occupied; or,
• When it is certified as completed by a competent authority in the UAE (The Building Completion Certificate).

Expense items not eligible for refund

The UAE national can claim VAT against construction related expenses, but the list excludes the following:

• Furniture
• Electrical appliances
• Landscaping, such as trees, grass and plants
• Garden furniture and ornaments and sheds
• Swimming pools
• Children play structures

For the full list please view Appendix 3 in the guide.

For more information consult with our experienced tax professionals to manage the tax impacts on all your transactions.