Where a UAE national owns or acquires land in the UAE on which he builds or commissions the construction of his own residence, he may make a claim to THE AUTHORITY to refund the VAT on the expenses incurred on the construction of the residence, subject to certain conditions as follows and also outlined in the Guide.
“VAT Refund for Building New Residences By UAE” issued by THE AUTHORITY.
A claim will only be valid if all the following conditions are fulfilled:
- The claimant must be a national of the UAE and cannot be a company.
- The claim must relate to the construction of a new building for the claimant or the claimant’s family.
- The new building must be for use only as a residence, so cannot be a hotel, hospital etc. which includes residential accommodation.
Relevant expenses are as follows:
- Services provided by contractors, including services of builders, architects, engineers, and other similar services necessary for the successful construction of a residence;
- Building materials, are goods of a type normally incorporated by builders in a residential building or its site, but not including furniture or electrical appliances.
Goods/materials are normally considered to be incorporated into a building when they are fixed in such a way that the fixing or removal of those goods would either require the use of tools or result in the need for remedial work to the fabric of the building, or substantial damage to the goods/materials themselves.
A refund claim must be submitted to THE AUTHORITY via the e-portal, within 12 months of the earlier of date that works are certified complete, or occupation by the owner or family.
Details of the application process via the taxpayer’s e-services account are given in the VAT Guide “Refund for UAE Nationals Building New Residences” (VATGRH1).
Once the application has been reviewed, the taxpayer will receive a notification of the result by email, including the amount of VAT that will be refunded. THE AUTHORITY will then make the payment within 5 business days from the date of approval of the payment.
If the building is used other than as a residence, THE AUTHORITY may claim back the refunded input VAT.
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