A brief idea about charitable building, The charitable building implies to a building or a part of a building that is only used for a charitable task. And to evaluate that there is a separate body formed by the government authority. There is a list of charitable building that is prepared by the government body, and the buildings on the list are eligible charitable activities. So, the point is very clear; the buildings that are registered under the list are the government authorized charitable building.
Idea about the Charitable Activity in UAE
- In order to understand the charitable task carried out by the building in UAE is authorized by the Ministry of Community Development. However, the charities that are authorized by the Federal Decree are also considered authentic charitable agency in UAE.
- The charitable agencies are not subjected to make profit under any circumstances.
The supply of a Charitable Building
In UAE if the building is designed for the charitable activities then it is considered as zero-rated building. So, the first supply implies to sale or lease to build the building that will particularly designed for charitable tasks. In case other building the first supply deals with VAT but in the case of charitable building there is no such thing. Although, for the first supply of the residential building there is no time limit for evaluation whether, the building could be zero-rated. Otherwise the residential buildings are given with three years of time limit to submit VAT on the first supply.
According to UAE law, the first supply for the residential building is zero-rated. If the building is recognized as charitable building then the VAT will recovered that was paid during construction.
Things to know about VAT on Supply of Charitable Buildings
In the case of subsequent supply, if the building is on lease then the VAT will not be zero-rated. The leased building does not qualify for the first supply and that is the reason they will be not VAT reduction facility. In the subsequent supply for the charitable building will be charged with 5% of VAT.
However, as the subsequent supply of the charitable building is chargeable, the supplier can apply for VAT return. The supplier will get the return of the VAT that was paid during the construction of the building. The maintenance and the upkeep costs can also be recovered.
There are few conditions that are related to the VAT refund. In order to file the VAT return, you need to learn about the conditions that are influencing the VAT refund is that the building needs to qualify as the charitable building.
If you want to learn more about VAT refund then you need to consult with a professional who will tell you what are the charitable buildings and how the charge is evaluated. In order to do that you need to consult with a tax specialist or lawyer for that matter. You can read the official web for VAT refund in UAE. If you take professional help then it will be easier for you to file for the return.
In order to file VAT return in UAE you need a form to fill up. The educational institution, hospitals, and many more are considered as charitable building. You need to keep in mind that the build needs to be used solely for charitable purposes. The charitable building always has an option for tax return in UAE. GCC Filings will help you with VAT return filing, registration and all other accounting and auditing needs.