4. VAT Refund Suppliers Guide.pdf

This is a suppliers guide issued by the Federal Tax Authority (FTA) of the UAE regarding VAT refund mechanisms for Foreign Armed Forces under Agreement No. 1, dated May 2024.

The guide addresses VAT refund requirements and procedures for eligible suppliers providing goods and services to Foreign Armed Forces present in UAE territory, including the Army, Marine Corps, Navy, Air Force, and Coast Guard. Suppliers must be approved by the FTA and listed on official Supplier Lists to participate in the refund scheme. The refund mechanism allows suppliers to recover VAT charged on eligible supplies by not collecting the actual VAT from Foreign Armed Forces, provided certain conditions are met. Key eligibility requirements include: supplies must be goods or services exclusively for official use of the Foreign Armed Forces; the Foreign Armed Forces must provide and retain all required documentation; VAT must not have been paid by the Foreign Armed Forces; and both parties must agree the supply falls under the scheme via signed declaration. Suppliers must obtain and retain specific documentation including certificates of entitlement, identification of authorized personnel, proof of authorization, purchase orders, supply contracts, acknowledgment of receipt, tax invoices, and signed declarations from both parties confirming the refund scheme application. Record retention obligations require suppliers to maintain all relevant documentation for five years from the end of the tax period in which the supply was made, or from when the refund process is finalized, whichever is later; real estate-related records must be retained for 15 years. The refund is claimed by suppliers as an adjustment in negative value in Box 9 of their tax return for the applicable tax period.