The FTA in Dubai has already issued its clarification regarding the input VAT recovery time frame and other details. For further information, you can always reach out to GCC Filings along with assistance across essential services such as accounting, auditing, VAT registration, company incorporation and more. The FTA has emphasized upon the first period for which conditions should be met for input VAT recovery.

Key aspects to remember in this regard

The FTA’s notification is essential since deductions should not be made prior to all essential conditions being fulfilled. In this first period, taxpayers will have just one extra tax period for deductions prior to coming under the VAT regime’s voluntary disclosure regime in the UAE for claiming input VAT on the goods and services that have been purchased.

The conditions include holding a tax invoice that is valid and usage of goods or services for purposes which are taxable. There are requirements that invoices should be paid or purchaser should have intentions of paying within a period of 6 months or the end of the credit period agreed upon.

More on recoverable input tax

The recoverable input tax is equal to the tax payable minus the output tax payable. Here are some key aspects or conditions that you should keep in mind:

  • The recipient who is claiming recovery of input taxes on supply should make sure that the tax invoice is received and kept in the records itself. The tax invoice should display information about supply related to the recovery of input tax that is being claimed.
  • Payment of consideration for supply by the recipient is subject to payment or intention to pay the same within 6 months post the date agreed for paying for supplies.
  • The input tax recovery time frame naturally depends on this condition and this provision is a vital component of the entire VAT regime in the UAE.

GCC Filings is the best option that you can consider for learning more about the VAT regime, input tax recovery and other services such as VAT registration, return filling, company incorporation, accounting, auditing and a lot more. Companies should make sure that they properly identify their specific supplies which can help them recover input taxes while also fulfilling all the terms and conditions for claiming the input VAT for recovery in a timely manner. This will naturally ease up cash flow and overall business working capital.

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