What is UAE VAT Administrative Exception?
UAE VAT Administrative Exception is a way to provides registrants with concessions or exceptions allowed by the Federal Decree-Law No. 8 of 2017 on Value Added Tax (“Law”). UAE VAT Administrative Exception also stands under the Cabinet Decision No 52 of 2017 on the Executive Regulations of the Federal Decree-Law No. 8 of 2017 on Value Added Tax (“Executive Regulations”)
The UAE VAT Administrative Exception is put under mechanism if difficult circumstances prevent businesses and companies from following certain procedural aspects of the Law or the Executive Regulations.
The Eligibility Criteria for UAE VAT Administrative Exception
There are three conditions that describe the eligibility for UAE VAT Administrative Exception for the companies and business in the UAE –
- It is extremely crucial that the applicant is registered as a commercial entity with the Federal Tax Authority in the UAE.
- Fulfil the requirements in respect of the relevant Exception Request, as outlined by your tax agent in Dubai or as advised by the FTA.
- Ensure to submit all the supporting documents related to UAE VAT Administrative Exception.
Categories of UAE VAT Administrative Exceptions
Only specific categories can make UAE VAT Administrative Exception Requests. Such categories and the fundamental conditions for the exceptions along with reference from the Law
UAE VAT Administrative Exceptions are grouped into the following categories –
The registrant must be able to demonstrate the available records that describe the particulars of any supply. The records must also prove that it would be impractical to issue a tax invoice as per Article 59(1) or Article 59(2) of the Executive Regulations for UAE Tax Invoices.
Tax Credit Notes
It is crucial for the registrants or applicants to show the records available to ascertain that the particulars of any supply. They also must prove that it would be impractical to issue a Tax Credit Note as per Article 60(1) of the Executive Regulations for UAE Tax Credit Notes.
Length of the Tax Period
The registrant should provide the reasons for requesting a change in the length of the Tax Period. The FTA considers the request of changing the length of the Tax Periods in UAE only for certain categories.
Nevertheless, while requesting a change the applicants will have to provide the required information depending on the categories segregated, those are as follows –
- Individuals: Individuals who can apply to change the Tax Period are board members, property owners and other individuals such as freelancers. The FTA will consider all the supplies made by persons on these designations before arriving at a decision. These commercial individuals must submit number of invoices issued in the preceding for 12 months including the total tax paid in the preceding for 12 months.
- Constant Tax Refunds: Businesses in a constant refund position all through the tax period in the preceding 12 months and expect to remain in the same position. UAE VAT Administrative Exception Requests here are conditioned whether the registrant expects any change in the business model that may result in a change of refund position.
- SMEs with funding: Registered SMEs which receive official funding approved by the Government and can apply to change their Tax Period. The factor here is that you need to submit the documentation for the total tax paid and the taxable supplies for the past 12 months.
- SMEs without funding: Registered SMEs which do not receive official funding approved by any Government entity provided the total value of Taxable supplies in the preceding 12 months was equal to or less than AED 5 million. The SMEs without Government funding can submit their UAE VAT Administrative Exception requests after displaying total tax paid, taxable supplies or any penalties paid in the last 12 months.
An applicant or registrant who files UAE taxes on a quarterly basis makes use of a stagger. The applicant may request a change in the stagger assigned to him, when the Tax Period ends depending from the month requested by him. However, the condition here is that the registrant must provide the reasons for requesting the change in stagger.
Time Extension for the export of goods
The FTA can extend the 90-day period from the date of supply. In case, if the FTA has determined, after the supplier has applied in writing, then the time extensions are proceeded in the way segregated below –
- Due to the nature of the supply, it is not practicable for the supplier to export the goods, or the class of goods, within 90 days of the date of supply.
- The registrant must provide the actual reasons / circumstances, as prescribed under the law, to seek an extension of time for the export of goods.
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