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Input tax which is incurred in respect of goods or services which are used partly for making supplies that allow for VAT recovery and partly for making supplies for which VAT is not recoverable is known as “residual input tax”, and it must be apportioned between those supplies. Recovery will be restricted to the proportion relating to supplies that allow for VAT recovery.

Input tax apportionment method is used by any taxable person who makes a mixture of taxable and exempt supplies. A taxable person can submit the Input Tax Apportionment Request Form to the Federal Tax Authority (“FTA”) in order to be able to use a special method of input tax apportionment.

Basic details required while submitting input tax apportionment form are:

  1. About the applicant
  2. Contact details of the applicant
  3. About the request for the input tax apportionment
  4. About the special method of input tax apportionment
  5. For non-sectoral method:
    • Justification for the method selected
    • Upload the calculation sheet applying the proposed method
    • Provide any documentary proof to support the calculations made for the proposed and any other alternative methods
  6. For Sectoral method:
    • If the sectoral method is selected, identify the method for allocating expenses between sectors
    • Justification for selecting a sectoral method
    • Justification for the selected method of allocating expenses between sectors
    • Identify the special apportionment methods selected to be used for each sector
    • Upload the calculation sheet applying the proposed method
    • Provide any documentary proof to support the calculations made for the proposed and any other alternative methods
  7. Details of authorized signatory
  8. Declaration

Sample form is provided below:

1. About the Applicant

Name of the Applicant*

Input the full name under which you are registered with the FTA.

Tax Registration Number (TRN)*

Provide your TRN for VAT registration.

Tax Agent Approval Number (TAAN)*

If you have an appointed Tax Agent, please input the TAAN here.

2. Contact Details of the Applicant 

Building name and number, Street etc.*

Provide your contact details here. If you are located outside the UAE, some fields may or may not be relevant to you (e.g. PO box).

3. About the Request for Input Tax Apportionment 

Have you previously requested a special input tax apportionment method approval from the FTA?*

Answer ‘yes’ or ‘no’. Please note not to submit duplicate claims – you should provide the FTA with the complete, relevant and accurate information necessary to assess the application.

If yes, provide the form reference number of the previous claim

Provide the reference number of the previous claim.

If yes, provide the date of the previous claim

Provide the date of the previous claim.

If yes, provide the decision of the previous claim

Provide FTA’s decision of the previous claim

If yes, provide the method approved in the previous claim

Provide the method approved / applied for in the previous claim

4. About the Special Method for Input Tax Apportionment 

What industry is your business in?*

Describe the industry or industries your business is operating in

Explain why you are requesting a special input tax apportionment method*

Provide your input in no more than 500 words.

Provide description of exempt supplies you provide*

Provide description of each stream of exempt supplies you provide

Provide description of taxable supplies you provide*

Provide description of each stream of taxable supplies (taxed at 5% and 0%) you provide

Provide description of non-business activities of the business*

Provide description of your non-business activities

Provide information on expenses wholly attributable to exempt supplies / non-business activities*

Provide information on expenses which are wholly attributable to exempt supplies / non-business activities

Provide information on expenses wholly attributable to taxable supplies*

Provide information on expenses which are wholly attributable to taxable supplies

Provide information on residual input tax*

Provide a description of types of expenses on which the input tax will be residual.

Special method that may apply to you*

Select from the drop down list the special method that applies to you: · Output based method · Transaction count method · Floorspace method · Sectoral method

Upload the calculation sheet applying the standard method

Upload the calculation sheet applying the standard method.

The template is provided in the application form in an excel format.

Specify the period to which the calculation of the standard method relates

The calculation should relate to the minimum period of 6 months and the maximum period of 12 months

Fill the below section if you have selected a non-sectoral method:

 

Justification for the method selected

Provide justification for the method you have selected (using the flowchart for choosing the correct special apportionment method).

Upload the calculation sheet applying the proposed method

Upload the calculation sheet applying the proposed method for the same period as the example of the standard method of apportionment provided above.

The template is provided in the application form in an excel format.

Provide any documentary proof to support the calculations made for the proposed and any other alternative methods

You may attach the relevant supporting documents to facilitate the processing of your request. You may hide certain information that is commercially sensitive when submitting the document(s).

Fill the below section if you have selected a sectoral method:

 

If the sectoral method is selected, identify the method for allocating expenses between sectors

Please select from the drop down list the allocation method that applies to you: · Headcount method · Outputs method

Justification for selecting a sectoral method

Provide justification for why you have selected a sectoral method.

Justification for the selected method of allocating expenses between sectors

Provide justification for selecting a headcount or outputs method for allocating expenses between sectors

Identify the special apportionment methods selected to be used for each sector

Provide a list of sectors and the special apportionment methods selected for each of the sector

Upload the calculation sheet applying the proposed method

Upload the calculation sheet applying the proposed method for the same period as the example of the standard method of apportionment provided above. The template is provided in the application form in an excel format.

Provide any documentary proof to support the calculations made for the proposed and any other alternative methods

You may attach the relevant supporting documents to facilitate the processing of your request. You may hide certain information that is commercially sensitive when submitting the document(s).

4. Authorized Signatory 

Title Name in English Name in Arabic etc.

The signatory must be authorized to lodge application of behalf of the applicant. Evidence of authorization may include a Power of Attorney or similar in the case of legal persons.

5. Declaration 

Using this checklist will help you to make sure that you have completed the form correctly. Include any other forms and documents which we have asked you to send.

Note:

Taxable person do not need to input anything for the boxes where document uploads are requested; instead, they should include the information and relevant documents, as supporting documentation in the email to be sent to the designated FTA’s email address at [email protected] along with the Input Tax Apportionment Request Form.


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The entire contents of this article is solely for information purpose and have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation.. It doesn't constitute professional advice or a formal recommendation. The author has undertook utmost care to disseminate the true and correct view and doesn't accept liability for any errors or omissions. You are kindly requested to verify & confirm the updates from the genuine sources before acting on any of the information's provided herein above.

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