Understanding the UAE VAT Refund Scheme for Exhibitions and Conferences

A. Introduction

The UAE has established itself as a premier global destination for business events, exhibitions, and conferences. To support this vision, the government has introduced the VAT Refund Scheme for Exhibitions and Conferences, allowing international businesses to recover the VAT incurred on specific event-related expenses. This initiative enhances the attractiveness of the UAE as a hub for global events while ensuring compliance with tax regulations.

B. Purpose of the VAT Refund Scheme

Introduced to boost international participation in the UAE’s business events sector, the VAT refund scheme allows eligible foreign entities to reclaim VAT on certain expenses related to exhibitions and conferences. This initiative not only reduces costs for international participants but also strengthens the UAE’s position as a preferred location for global events.

Key benefits of the scheme include:

• Encouraging international participation by reducing financial barriers.
• Enhancing the UAE’s reputation as a cost-effective business hub.
• Increasing event attendance from foreign businesses and professionals.

C. Who Can Benefit from the VAT Refund Scheme?

The VAT refund is not universally applicable; it is available to specific entities involved in organizing or participating in exhibitions and conferences. Eligible parties include:

1.Space Providers (Scenario A)

• UAE-based businesses that own or rent out venues for exhibitions or conferences.
• Must be VAT-registered and possess a valid trade license.
• The venue must be approved by a local government authority.

2.Event Organizers (Scenario B)

• UAE-based event management companies responsible for organizing conferences or exhibitions.
• Must be VAT-registered and licensed to manage events.
• International (non-UAE) event organizers can also qualify if they provide proof of establishment in their home country.

3.International Participants and Businesses

• Businesses that do not have a Place of Establishment or Fixed Establishment in the UAE.
• Must not be VAT-registered in the UAE.
• Eligible for VAT refunds on expenses related to renting space or event participation.
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D.Eligibility Criteria for VAT Refund

To qualify for a VAT refund under this scheme, applicants must meet the following criteria:

• The VAT refund applies only to specific services, namely:
  Renting exhibition or conference space.
  Entry fees for attending or participating in events.
• The customer (international participant) must not have a business presence in the UAE.
• UAE suppliers must collect and verify a written declaration from the international customer confirming their eligibility for the refund.
• The VAT is initially charged on invoices but is refunded immediately, ensuring that international customers do not bear the cost.

E. How the VAT Refund Process Works

The VAT refund process involves multiple steps to ensure compliance and smooth execution:

• Supplier Verification:
  UAE suppliers must confirm the international status of the customer through a declaration.
  Supporting documentation must be collected.
• Invoice Issuance:
  Suppliers issue a tax invoice indicating VAT charged and subsequently refunded under the scheme.
• Financial Transactions:
  The customer pays only the base price, with the VAT effectively refunded at the point of sale.
• Tax Reporting:
  UAE suppliers report VAT in their tax returns and simultaneously claim the refund, ensuring accurate tax records.
• VAT Refund License:
  UAE suppliers must obtain a VAT refund license from the Federal Tax Authority (FTA) before participating in the scheme.

F. Applying for a VAT Refund License

To offer VAT refunds, suppliers need to obtain a VAT refund license through the FTA. The application process involves:

1. Filling Out the Application:

• Available on the FTA e-Services portal.
• Different forms for space providers and event organizers.

2. Submitting Required Documents:

• Proof of VAT registration.
• Trade licenses and venue/event ownership documents.
• Supporting details for eligibility.

3. Approval Timeline:

• The FTA reviews applications within 20 business days.
• If approved, the license is issued within five additional business days.

4.License Validity:

• For space providers: Valid for one year (or rental term duration).
• For event organizers: Valid for a single event.

G. Record-Keeping Requirements

Both suppliers and customers must maintain proper documentation for five years from the end of the tax period in which the VAT refund license expires. Required records include:

• Customer’s written declaration confirming non-UAE status.
• Invoices detailing VAT charges and refunds.
• Any additional supporting documents proving eligibility.

These records help ensure compliance and enable the FTA to verify claims during audits.

H. Conclusion

The UAE’s VAT Refund Scheme for Exhibitions and Conferences is a strategic initiative aimed at fostering international engagement and boosting the country’s events sector. By eliminating VAT costs for eligible participants, the UAE continues to strengthen its appeal as a premier destination for global business events. Understanding the scheme’s criteria and processes ensures that businesses can effectively leverage this opportunity while remaining compliant with tax regulations.