"Federal taxes": simple procedures to recover the tax on new housing

Khalid Ali al-Bustani, Director General of the Federal Tax Authority, said that the Authority has implemented simple electronic procedures to refund the citizens of the VAT they paid in order to build their new homes, in accordance with the vision of the leadership to develop a modern housing system for the citizens and to offer the best living standards, to live well and in the context of great care What the state awards them as the focus of development plans and the basic objective of all initiatives and projects implemented by all government institutions.

This came in a press release today on the latest developments regarding the Authority's efforts to pay the value added tax paid by a number of citizens for the construction of their new home.

Khalid Ali Al Bustani said: "We are pleased to provide our customers with the latest electronic systems that are innovative and easy to meet the aspirations of the UAE community to provide all forms of support necessary for stability and prosperity. reach the citizens. "

He added: "The Authority implements tax legislation reflecting the government's policies to ensure the well-being of the citizen, and from this point of view transparent and transparent criteria and mechanisms have been applied to facilitate the recovery of VAT for the construction of new homes for citizens. "
His Excellency said that in the context of the focus of the leadership on the stability of housing for all segments of society, the UAE legislator has paid special attention to increasing the pressure on citizens and residents of the United Arab Emirates The offer of commercial real estate (sale or rent) is subject to the basic rate of VAT 5% of the tax in general, with the exception of the first delivery during the first three years, which is zero.

Al Bustani pointed out that the delivery of the residential building for the first time in 3 years construction is zero. Although all subsequent purchases of the tax are exempt, the law allows citizens within the first three years after completion of construction and equal treatment for homeless people the opportunity to recover the tax on the construction of their new home.

He explained that the Authority has laid down the conditions and documents to be attached to the requests for recovery to the Authority to recover citizens who meet the conditions for tax refunds for the construction of new homes, while at the same time applying precise procedures to attempt to prevent tax evasion.

The federal tax authorities emphasized the need to ensure that citizens who apply for VAT refunds for the construction of new dwellings ensure the mobilization of all forms related to the recovery and accuracy of the information and data included in these requests to ensure for the completion of procedures and the processing of applications by specialists from the Commission in accordance with the set time limits.

In this respect it is necessary to consult the manual available on the website of the federal tax authorities via: https://tax.gov.ae/en/pdf/VAT-Refund-Building-New-Residences-by-UAE -Nationals- user-guide-full.pdf

The guide provides a simple and comprehensive explanation of the mechanism for filing VAT refund requests for new housing construction by UAE nationals and the documents to be attached to applications submitted to the Commission for review.

She pointed out that the reimbursement procedures through the Authority's website: tax.gov.ae are consistent with the three basic conditions that the applicant is a national of the UAE and that the costs incurred relate to the construction of a new house will be used exclusively as a home for the applicant and / or Family) where recovery does not apply to additions to the home, and expenses must be related to basic and specific goods and services related to the work of the consultant , contractor and building materials.

She explained that the citizen who builds his own house is entitled to a refund of the value added tax within six months of the date of completion of the construction of the new house, which is earlier than the occupancy date of the dwelling or the date of issuing the competent authority in the State certificate of completion of the building or a date fixed by the authority.

The first step is to download the tax return forms that are available on the TRA website. In the second step all required data in the forms are filled in, printed and signed and the handwritten forms are not accepted. While the third step is to send the tax refund request signed with the supporting documents supporting the application in PDF format to the e-mail address for receiving requests for VAT refund for new housing: [email protected] for the expiry date Six months after the date of completion of the new accommodation.

As regards the documents required, the Authority has indicated that it includes a copy of the passport and identity of the UAE, the summary of the applicant and the identification documents that are the property of the plot specified in the State, stating the date of completion of the building and the date of occupancy of the building, such as energy bills (electricity and water).

The applicant receives an e-mail confirming the receipt of the refund request and receives a new e-mail from TRA within 5 working days to indicate whether it is eligible for reimbursement or not with the reference number of the application.

The fourth step is in the event that the applicant is eligible for a refund. If the request has been referred, the Authority or the inspection body that charged the Commission must assess the recovery requests with any additional supporting documents required. to review and verify the application.

Under the tax legislation, the Commission has 20 working days to respond to tax refund requests and the tax is refunded to the applicant within 5 working days if the request for reimbursement is approved.

The federal tax authorities have indicated that they will not apply any fees for the processing of VAT applications for new homes.
One of the basic conditions for the recovery of the tax on expenses is that these expenses relate to a newly built building that is exclusively used as a home for the applicant and / or his family. The services of the contractor, including the services of builders, architects, engineers and similar services, are necessary for the successful completion of the construction process. Mostly used by contractors in residential buildings or housing locations, but does not contain furniture or electrical appliances.

"Global tax practices have underlined the importance of extending VAT on goods and services, reducing exemptions and exceptions in the system to preserve tax revenues and preventing tax avoidance practices that increase exemptions. It will be difficult to follow what is exempted from the tender by contractors and construction consultants for new homes and some taxable commercial property, which will lead to an expected gap and many practices related to tax evasion.

He stressed the speed with which the Authority relaxed the compliance procedures for citizens and contractors by submitting the application once after completion of the construction of the house instead of repeating the same procedure and submitting the repair requirements many times during the construction period. ensure that the beneficiaries are not affected by the tax refund, VAT, 20 working days after receipt of the request and supporting data, with five working days for reimbursement once the reimbursement amount has been approved.

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