FTA Guide on Refund of VAT on Building & Running Mosques

In the UAE, appropriate individuals frequently carry out the building and management of mosques. The UAE’s standard procedures for refunding VAT did not allow for the recovery of input tax because it does not qualify as a commercial activity. According to Cabinet Decision No. (82) of 2022, the UAE now permits the Refund of Input Tax Incurred on the Construction and Operation of Mosques. You can get more information about these laws provisions from tax agents in Dubai.

The UAE Federal Tax Authority (FTA) has released a new directive in order to make the law clear to the appropriate parties (VATGRM1). The FTA will refund the VAT paid on any supply or import made by a person or class of people named in the Cabinet Decision in accordance with the new VAT GRM1, subject to certain limitations, and will offer a particular refund mechanism for qualified people building and/or operating a mosque

You may find important details on the rules and requirements you must satisfy for the Refund of VAT Incurred on the Construction and Operation of Mosques in the UAE in the blog post that follows:

How does the FTA define mosque construction for UAE VAT purposes?
According to the FTA, the following expenses that were incurred prior to the mosque becoming operational are included in the term “building of mosque”:
• The mosque’s real construction procedure
• The mosque’s furnishing and equipment procedure
• The provision of required tools, gadgets, and upkeep
• Any prerequisites that must be met before the mosque can begin its authorized operations.
• All that must be done before the mosque is put into use in order to carry out all of its authorized functions

Who is entitled to a VAT Refund on the Construction and Operation of Mosques in the United Arab Emirates?

According to the FTA, a donor is qualified to receive a refund of the VAT paid when a mosque was built. For the recovery of VAT incurred on the building and maintenance of mosques in the United Arab Emirates, a donor must, nevertheless, satisfy each of the following eligibility requirements:
• In the UAE, the donor must pay VAT.
• The products and services must have been acquired especially for the mosque construction.
• A certificate for the completion of the mosque operation must be obtained and kept by the donor.

• The General Authority of Islamic Affairs and Endowments or the regional authority in charge of mosque affairs accepted the Donor’s intention to transfer the Mosque to any other person for whom it was intended, unless the transfer results in a taxable supply, or
• The Donor runs the Mosque in accordance with the Competent Authority’s authorization.

How to Apply in the UAE for a VAT Refund?

The donor may submit a request for a reimbursement of the VAT paid on goods and services purchased especially for the construction of the mosque once the necessary requirements have been satisfied. The FTA’s e-Services platform must be used to submit the application. You can claim for a VAT refund with the aid of tax agents in Dubai.

Who qualifies for a VAT refund for mosque operations in the United Arab Emirates?

Subject to a few restrictions, the operator of a mosque is qualified to apply for VAT refunds in the UAE. Only the VAT incurred on purchases of goods and services directly related to the maintenance of that Mosque will be covered by the refund. You can get more assistance from Dubai tax consultants. The requirements that a mosque operator must satisfy in the UAE in order to be qualified to submit an application for a VAT refund are as follows:

• In the UAE, the operator has incurred VAT.
• The mosque’s operation and upkeep must have been the only focus of the purchases of goods and services.
• The General Authority of Islamic Affairs and Endowments or the local organization in charge of mosque affairs must register the structure as a mosque.
• Throughout the time for which a Refund Request is made, the operator must be in possession of a written, time-limited authorization granted by the Competent Authority for the Operation of the Mosque.

How can a mosque operator in the UAE submit a request for a VAT refund?
A mosque operator may use the FTA’s e-Services platform to submit an application for a refund of the VAT paid on goods and services purchased specifically for the operation of the mosque after verifying that all eligibility requirements have been satisfied. For more details on the application procedure, speak with VAT consultants in Dubai.

Consult the Top Tax Advisors in Dubai, United Arab Emirates

Businesses may find it challenging to navigate the FTA’s terms and conditions when applying for a refund of VAT they paid in the UAE. However, by speaking with tax advisors in Dubai like Intellect Chartered Accountants, the procedure can be made simple (ICA). With more than 20 years of expertise, we are among the best VAT consultants in Dubai. ICA can offer reliable tax services in Dubai like VAT accounting, filing VAT returns, and VAT refunds. If you require assistance with any tax-related issues, speak with us.

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