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  • Decree-law in UAE provides newly registered dealer to recover VAT paid on supply or goods or services and on the import of goods.
  • Even if VAT is paid before registration. This gives the dealer the advantage of claiming VAT paid on purchase and import during the unregistered period.
  • VAT can be recovered only when the registered dealer has a copy of tax invoice which includes the details of supply related to input tax and consideration for such supply is paid.
  • If the conditions are not satisfied then the dealer can claim the VAT in subsequent return when the conditions are satisfied.

Note that, a dealer can recover VAT only if:

  • Goods or services are used for making taxable supplies.

Goods or services

Suppliers

Credit

Before registration

Taxable supply after registration

Available

Before registration

Before registration

Not allowed

  • In case of a capital asset, if depreciation is also calculated on VAT component then the dealer will not be eligible to recover VAT.

Case 1

Case 2

  • On services which are received within 5 years prior to registration.
  • The 5-year condition is not levied on goods.
  • When the goods are transferred to another implementing state before registration then the dealer will not be able to recover VAT paid.

Further note:

  • VAT can be recovered only when the registered dealer has a copy of tax invoice which includes the details of supply related to input tax and consideration for such supply is paid.
  • If the conditions are not satisfied then the dealer can claim the VAT in subsequent return when the conditions are satisfied.

 

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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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