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Refund value-added tax for new building construction:
The mechanism for submitting a tax refund application:

A citizen has the right to submit a VAT refund request. If he owns a land or it has been granted to him and builds a house on it, the request is submitted to the Federal Tax Authority to recover the tax incurred on specific expenses related to building a new home, after fulfilling the specific conditions mentioned in Article (66) of the regulation. Executive.

How to submit a refund request?

The application for VAT refunds for new homes is submitted through its e-services portal. The required documents are attached which contain the detailed data of the person who will submit the application and the particulars of the specific property. After that, wait for the authority’s decision after reviewing the application and investigating whether the applicant is eligible to claim a refund.

What is meant by the term building?

It is any building that is used as a home for a natural person, as this includes his fixtures and equipment and is used in the building. This includes the villas, with their annexes, such as toilets, cooking facilities, sleeping places and toilets.

Note that the facilities for the dwelling, the separate structures / buildings that were built later on the same plot of land, will not be considered as a residence.

What is the tax refundable:

A refund request must fulfill the following conditions in order for it to be considered by the Authority.

Standard regarding building use.

Whereas, the intended expenses are those related to a newly constructed building as housing for a citizen’s owner or his family, and this does not include the extension of an old building or expansion.

Criteria related to the nature of expenditures.

Categories of expenditures that are subject to VAT refund.

  • Building materials.
  • Contractor services.

Also, the added value on the clearing agent and transportation expenses can be recovered when building materials are imported.

Who is entitled to claim tax refunds:

The VAT refund application is considered by a natural person who is a citizen of the United Arab Emirates, and he must be a holder of a record book.

When should the application be submitted to the authority?

The refund request is submitted within 12 months from the date of completion of the newly constructed residence

IAC center
Author: IAC center

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