VAT Refund in the UAE is a key mechanism for registered businesses to recover excess input tax paid to suppliers. The Federal Tax Authority (FTA) has streamlined this process through its EmaraTax e-Services portal, ensuring transparency, compliance, and timely reimbursement.
If your input VAT exceeds your output VAT, you are entitled to claim a refund rather than carrying forward the credit. Here’s a complete breakdown of the VAT refund process, requirements, and important timelines every UAE business should know.
Option 1: VAT Return Submission
The refund journey starts with filing your regular VAT Return (Form VAT201).
1️⃣ File Your VAT Return
Log in to the EmaraTax portal and submit your periodic VAT Return. The system automatically calculates your excess refundable tax if your input VAT (tax you paid on purchases) is greater than your output VAT (tax you collected from sales).
2️⃣ Identify and Choose Refund Option
At the end of your return, you’ll see two options:
- “Yes” – to request a refund of the excess amount.
- “No” – to carry forward the amount as credit for future VAT liabilities or penalties.
💡 Tip: Choosing “No” doesn’t forfeit your right to the refund — it simply keeps the credit in your FTA account for later use.
Option 2: Submitting the VAT Refund Application (Form VAT311)
If you opted for “Yes” in your VAT Return, the next step is completing Form VAT311.
🔹 Access the Form
- Log in to EmaraTax → VAT → Refunds → New Refund Request.
- Your TRN (Tax Registration Number) and total excess amount will appear automatically.
🔹 Complete and Review Details
- Refund Amount: Enter the exact figure you wish to be refunded (can be equal to or less than the total excess).
- Supporting Documents: Upload Supporting documents pertaining to that particular quarter such as (Top 5 Invoices for each category along with refund sheet)
- Outstanding Penalties: The FTA will offset any existing administrative penalties (except late registration penalties).
- Bank Account Details: Ensure your registered IBAN is valid and matches your taxable entity. Upload an official IBAN certificate if required.
Once all details are correct, submit Form VAT311 for FTA review.
FTA Review & Processing Timelines
The Federal Tax Authority (FTA) adheres to specific timeframes for processing refund applications:
| Stage | Timeline | Details |
|---|---|---|
| FTA Review | Within 20 business days | FTA verifies data and may request additional information such as invoice breakdowns or payment proofs. |
| Refund Approval & Payment | Within 5 business days after approval | Once approved, the refund is transferred directly to your registered bank account. |
Note: If additional verification is needed, FTA will notify you of an extended review period.
Essential Documents Required for a Successful VAT Refund
To ensure smooth and timely processing, businesses should maintain proper documentation that complies with UAE VAT Law:
- ✅ Valid Tax Invoices – must include supplier TRN, VAT amount, and all mandatory details.
- ✅ Proof of Payment – such as bank statements or receipts showing actual payment for purchases.
- ✅ FTA Refund Template – Refund require submission of the FTA’s Excel format detailing refundable transactions invoice by invoice.
- ✅ Bank Confirmation – an official IBAN certificate issued by your bank.
Maintaining well-organized VAT records not only speeds up approval but also minimizes the risk of rejection or delay.
Option 3: Alternative to Refund: Carrying Forward Excess VAT Credit
Businesses are not obligated to claim a refund. You can carry forward the excess refundable amount as credit to offset future VAT liabilities.
Benefits of Carry-Forward:
- 💸 Improved Cash Flow: Automatically reduces upcoming VAT payable.
- 🕒 No Waiting Period: Avoids the review timeline for refund claims.
- ⚙️ Flexibility: You can claim part as refund and carry forward the rest.
This option is particularly useful for businesses expecting higher VAT-payable positions in the upcoming tax periods.
🧠 Expert Tip: Stay Compliant to Avoid Refund Delays
FTA scrutinizes refund claims closely. To avoid delays:
- File VAT Returns on time.
- Use the same bank account registered with your TRN.
- Keep digital copies of all invoices and proof of payment.
- Review entries before submitting Form VAT311.
For ongoing compliance, consider periodic VAT health checks to ensure your input tax claims meet UAE VAT law requirements.
At Finexus Advisory, our expert tax consultants provide comprehensive VAT registration, filing, and advisory services across the UAE. Whether you’re a start-up or an established company, we ensure that your VAT processes are accurate, compliant, and stress-free.
✅ VAT registration
✅ VAT De-registration
✅ VAT return filing
✅ VAT Health Check
✅ VAT Refund
✅ VAT Exception
Need expert advice to analyze your cash flow and determine if the cost of lost Input Tax recovery outweighs the benefit of simpler compliance? Finexus is providing expert services, contact us
