VAT on Expo 2020

VAT refund on goods and services –Expo 2020 UAE

According To cabinet decision no,1 of 2020 on refund of value-added tax paid goods and services connected with expo 2020 Dubai, The vat incurred on the import or supply of certain goods And services can be claimed to be refunded by the official participants of the expo 2020.

Responsibilities of Businesses related to VAT in the UAE

All business organizations or firms should keep evaluating or track of their financial transactions and records accurate and up-to-date. Businesses must register for VAT if their yearly turnover meets the minimal criteria (as proven by their financial records) prescribed in the federal tax law. The business that believes that they do not need to register for VAT in the UAE should save their financial records in case we need to determine whether or not they should be.

How does it work?

Following methods can be used in the application to recover VAT incurred

If the official participant is not registered for VAT in the UAE , then a special refund request can be made through the Authority
If the official participant is registered for VAT in the UAE , it may recover or reclaim VAT via its quarterly VAT return

Note that the official participant must be registered for VAT in the UAE if the value of taxable supplies or imports exceeds the mandatory registration threshold of AED 375,000 annually.

However, a firm may opt to register for tax or VAT in the UAE voluntarily if their taxable supplies and imports are not up to the mandatory registration threshold, but meets the voluntary registration criteria of AED 187,500 per year as prescribed in the Federal tax law.

The reclaimable VAT connected to Expo 2020 Dubai

VAT can be only recovered in the UAE on goods and services that are used or intended to be used to generate taxable supplies. Whereas expenses that have been incurred by the participant do not relate to any taxable supplies VAT is not recoverable. The Participants are able to recover or reclaim VAT incurred on the import and acquisition of the following five categories of Goods or Services without the need to use them for making taxable supplies in the UAE:

VAT incurred by the Official Participant of expo 2020 on Goods and Services in direct connection with the construction, installation, alteration, decoration and dismantlement of their exhibition space.
VAT incurred by the Official Participant of expo 2020 on Goods and Services in direct connection with the works and activities of organizing and operating the Official Participant’s exhibition place and any presentations and events within the Expo 2020 site.
Tax incurred by the Official Participant of expo 2020 on Goods and Services relating to the actual operations of the Official Participant, provided that the value of each Good or Service for which the Office of the Official Participant of expo 2020 makes a request or claim is not less than 200 AED.
. VAT incurred by the Official Participant in connection with all operations, services and activities provided for the purpose of participation in Expo 2020 Dubai, whether located in or outside the territories of the Expo 2020 Dubai site.
VAT incurred on import of Goods for personal use of the Official Participants of the expo event

Zero-rated sectors

The following key types of supplies will be subject to a zero percent ( 0%) VAT charge in the UAE:

Exports of goods and services to beyond the Gulf Cooperation Council countries.
Transportation and related contribution or supplies on a global scale
Some marine, air, and land modes of transportation are in short supply.
Precious metals of investment grade- for example : gold, silver, of 99 % purity
Residential properties that are newly constructed and supplied for the first time within three years after their completion.
Provision of certain educational services, as well as the provision of related goods and services.
Provision of particular healthcare services, as well as the provision of related goods and services.

VAT- exempt sectors

VAT exemption will be granted to the types of goods and services pointed below:

The provision of certain financial services.
Residential properties
Bare or empty land
Passenger transport in the local area

Partial exemption

Input tax paid on business costs by a VAT registered person can be recovered in full if the vat is related to a taxable supply made or proposed to be made by the registered person. In contrast, if the cost is for a non-taxable supply (such as exempt items), the registered person will not be able to recoup the input tax paid.

A cost may relate to both taxable and non-taxable supplies provided by the registered person under certain circumstances (such as activities of the banking sector). In these situations, the registered person must divide input tax between taxable and non-taxable (exempt) supplies.

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