VAT Refund Services in the UAE for Businesses
Turn your excess input VAT into a cash refund
This page is for VAT-registered businesses whose input tax regularly exceeds their output tax: exporters, companies in a fit-out or capital spending phase, start-ups that registered voluntarily, and anyone who has overpaid the Federal Tax Authority (FTA). If your VAT return shows an excess refundable amount, you can apply to have it repaid in cash rather than leave it sitting on your EmaraTax account.
DirhamWise reconciles the balance, builds the evidence file the FTA expects and prepares the refund claim (form VAT311). We then draft replies to any follow-up questions until a decision is issued. This page covers business refunds only. The tourist refund scheme, the new-residence scheme for UAE nationals and refunds for foreign business visitors are separate processes and are not covered here.
What's included
When a business can claim a VAT refund in the UAE
A VAT refund for a business in the UAE is a repayment of excess recoverable tax. Under Article 74 of the VAT Decree-Law, a taxable person may apply to recover all or part of that excess in two situations:
- the recoverable input tax for a tax period is higher than the output tax payable for the same period; or
- the tax paid to the FTA is more than the tax actually payable, for example after a duplicate payment or an overpayment.
Before anything is repaid, the FTA offsets the excess against any tax payable and any administrative penalties you owe. If you do not ask for a refund, the remaining balance is carried forward to later tax periods and used against future VAT.
Where refundable balances usually come from
| Business situation | Why the return shows a refund |
|---|---|
| Exporter of goods or services | Sales are zero-rated, so there is little output tax, but VAT is still paid on local costs. |
| Fit-out, construction or equipment purchases | Large one-off purchases carry input tax that is higher than the VAT on sales in that quarter. |
| Newly registered or pre-revenue company | Costs are incurred before sales begin. Recoverable VAT paid on goods and services bought before registration can be claimed on the first return after registration, where they are used to make taxable supplies. |
| Business with a seasonal sales cycle | Stock is bought in one quarter and sold in the next. |
| Overpayment to the FTA | A payment was made twice, or was more than the return required. |
A refundable position is normal in these cases, but it tends to attract closer scrutiny than a payable return. That is why the evidence behind each input tax figure matters more than the form itself.
Refund or carry forward: deciding what to do with the balance
Each time a return shows an excess, you have a choice. You can apply for a cash refund, or leave the balance on your account to reduce future VAT payments. The right answer depends on your cash flow and on how quickly the balance would be used up.
| Question | Apply for a refund | Carry the balance forward |
|---|---|---|
| Cash effect | Money is paid into your bank account once the FTA approves the claim. | No cash received; future VAT payments are reduced. |
| Suits | Exporters and businesses that stay refundable quarter after quarter. | Businesses that will move back into a payable position soon. |
| Work involved | A VAT311 claim with a transaction schedule and supporting documents. | None at the time, but the figures must still be supportable if the FTA reviews them. |
| Time limit | Must be requested within five years of the end of the relevant tax period. | The balance must be used against tax liabilities, or reclaimed, within the same five years. |
Leaving a balance on the account indefinitely is no longer an option. From 1 January 2026, the amended VAT and Tax Procedures laws set a limit of five years from the end of the relevant tax period for requesting a refund of a credit balance or using it to settle tax liabilities. In specific cases, a request can still be made where the credit balance only arises in the last 90 days of that five-year period, or after it has ended.
There is also a transitional rule. Where the five-year period expired before 1 January 2026, or expires within one year after that date, the refund request may be made within one year of 1 January 2026. In practice, 31 December 2026 is the last date to claim many balances dating from roughly 2018 to 2020. If your business has carried an old balance for years, it should be reviewed now.
How to claim a VAT refund on EmaraTax, step by step
Refund claims for VAT registrants are made on form VAT311 in EmaraTax, the FTA’s online portal. The FTA does not charge a fee for the service. You can only request a refund after the relevant return has been filed, and the amount claimed cannot be more than the excess refundable amount the portal shows. The steps are:
- File the VAT return. The refundable amount comes from returns already submitted, so the return must be complete and correct first. Returns are due within 28 days of the end of each tax period.
- Reconcile the balance. Compare the excess refundable amount on EmaraTax with your VAT control account. Differences usually point to unpaid penalties, a missed payment or a return error.
- Check your bank details. Bank account details must be on your tax registration before you apply; the FTA rejects refund requests without them. If the details have changed, update the tax record first.
- Open the refund form. Log in to EmaraTax (FTA services are accessed through UAE Pass), select the taxable person, open the VAT module and choose VAT311 and then New Refund Request. Read and accept the instructions page.
- Review the refund details. The portal shows the transaction type, any outstanding liabilities, such as late registration penalties or other administrative penalties, and the excess refundable amount.
- Enter the amount. Claim the full balance or part of it, up to the excess refundable VAT shown for that transaction type.
- Complete the transaction schedule. Download the FTA template, fill in the transactions behind the claim and upload it. The portal also asks for a breakdown of selected return lines and some yes/no questions, including whether you made any out-of-scope supplies.
- Upload supporting documents. These include the bank account validation letter and the evidence described in the next section.
- Review, declare and submit. The declaration details are taken from your FTA registration. The declaration includes an agreement to provide more evidence if the FTA asks for it and to repay any amount wrongly obtained. Keep the application number shown on the acknowledgement.
- Respond to FTA correspondence. The FTA may ask for more information before it decides. Requests and decisions arrive by email and in the correspondence section of EmaraTax.
Once a refund has been paid, it appears in the payment and transaction history on your EmaraTax account.
Documents that support a VAT refund claim
The FTA lists an output and input tax report, and tax invoices and supporting documents, as the core documents for a VAT311 refund. Where the claim arises from an overpayment, it also asks for proof of the payment made to the FTA. In practice, what you need depends on where the refundable balance came from. This is the file we put together for a typical claim:
| Document | What it proves | Points to check |
|---|---|---|
| Output and input tax report | How the return figures were built, transaction by transaction | Totals must agree to the filed return, box by box. |
| Tax invoices from suppliers | Your right to deduct input tax | Each invoice must be a valid tax invoice that includes the details of the supply, issued to the registered entity. |
| Import documents | Import VAT paid or declared on goods | Keep the invoices and customs import documents together for each shipment. |
| Export evidence | Zero-rating of exported goods | A customs declaration with commercial evidence, or a shipping certificate with official evidence. Goods must leave within 90 days of the date of supply. |
| Supplier payment records and payables ageing | That input tax is recoverable in the period claimed | Input tax follows the part of the price paid. A payment you intend to make within six months of the agreed payment date is treated as made. |
| Proof of payment to the FTA | The overpayment being reclaimed | Needed where the refund comes from a duplicate payment or an overpayment. |
| Bank account validation letter | Where the refund should be paid | Issued and stamped by your bank, showing the account holder name exactly as registered with the FTA, bank name and address, SWIFT/BIC and IBAN. |
| Contracts and purchase orders for large items | That a capital purchase relates to taxable business activity | Especially useful for fit-out, property and equipment costs. |
| Reverse charge records | VAT accounted for on imported services and goods | From 1 January 2026, self-invoices are no longer needed, but the supporting documents must still be kept. |
The FTA can ask for documents in Arabic. Failing to supply them in Arabic when asked carries a penalty of AED 5,000, so we plan translations for key contracts early. If your invoices and ledgers are not in order, our accounting and bookkeeping service can fix them first.
Why VAT refund claims stall, and how to prevent it
Most delays come from the same few problems. Each one is easier to fix before submission than during an FTA review.
| Problem | What happens | How we deal with it |
|---|---|---|
| No bank details on the registration, or a bank letter that does not match the registered name | The request is rejected or the payment fails | We check the letter against the tax record and update the registration details first if needed. |
| Unpaid penalties on the account | They are offset against the refund, which reduces it or wipes it out | We identify each liability and advise whether to pay it, dispute it or apply for penalty reconsideration. |
| Invoices missing required details or issued to the wrong entity | That input tax can be disallowed | We ask suppliers for replacement tax invoices before filing. |
| Blocked input tax claimed | The claim is reduced and the return is corrected | We remove non-recoverable VAT, such as entertainment for people who are not employees, cars available for personal use and most free personal benefits for staff. |
| Export evidence incomplete | Zero-rating is challenged and output tax becomes due | We match each export sale to its customs and shipping documents. |
| Input tax claimed on bills you do not intend to pay within six months of the agreed date | That input tax is not yet recoverable | We review payables ageing and move the input tax to the period in which the bill is paid. |
| Exempt and taxable supplies mixed without apportionment | Input tax is overstated | We apply the apportionment method and recalculate the balance. |
| Slow or partial replies to FTA requests | The review takes longer or the claim is rejected | We prepare complete responses with the documents indexed to the questions. |
Two recent changes also matter. From 1 January 2026, the FTA must deny input tax where the supply was part of a tax-evasion arrangement that the business knew, or should have known, about. Separately, Cabinet Decision 149/2026, which amends the VAT Executive Regulation from 1 October 2026, restricts input tax recovery where a supply above a threshold to be set by the Minister is paid, or meant to be paid, in cash. Paying large suppliers by bank transfer keeps that restriction out of play.
Time limits, record keeping and penalties
A refund claim often leads the FTA to look back over earlier returns. These are the rules to keep in mind:
| Rule | What it means for a refund |
|---|---|
| Five-year refund window (from 1 January 2026) | A credit balance must be claimed, or used against tax liabilities, within five years of the end of the tax period it relates to. |
| Transitional deadline | Balances whose five-year period expired before 1 January 2026, or expires within one year after it, can be claimed until 31 December 2026. Where no FTA decision has yet been issued, a voluntary disclosure can be filed within two years of the refund request. |
| Extra record retention | Where a refund or credit-balance claim is still unresolved, the records for the related tax periods must be kept for an additional two years (from 1 April 2026). |
| Voluntary disclosure | If you find an error that changes the tax due by more than AED 10,000, it must be disclosed within 20 business days. Errors of AED 10,000 or less can be corrected in the next return. |
| Incorrect return | AED 500 penalty, unless corrected by the deadline or through a voluntary disclosure with no tax difference. |
| Tax difference found by voluntary disclosure | 1% per month on the difference. |
| Tax difference found by the FTA before any disclosure | A fixed 15% plus 1% per month. |
| Record-keeping failure | AED 10,000, or AED 20,000 if repeated within 24 months. |
These penalty amounts follow Cabinet Decision 129/2025, which has applied since 14 April 2026. If the review turns up an error, we recommend correcting it through a VAT voluntary disclosure before the refund is claimed. For what an FTA review involves, see our guide on preparing for a VAT audit.
How DirhamWise handles your VAT refund
We treat a refund claim as a review of your own VAT position, carried out before the FTA does its own. A typical engagement runs as follows:
- Scoping call. We look at your return history, the balance on EmaraTax and where the refund comes from.
- Reconciliation. We agree the refundable amount to your VAT control account, payments and any penalties shown on the portal.
- Input tax review. We test invoices, payment status, blocked items, apportionment and export evidence, with the largest amounts checked first.
- Corrections. Where needed, we prepare corrected figures or a voluntary disclosure so the claim rests on returns that hold up.
- Claim pack. We complete the VAT311 transaction template and return-line breakdowns, and index the supporting documents ready for upload.
- Follow-up. We draft replies to FTA questions and keep you informed until a decision is issued.
We quote a fixed fee once we know how many tax periods and transactions are involved. For businesses that stay refundable every quarter, it can work out more economical to combine the refund with ongoing VAT return filing under one of our monthly accounting packages, published at AED 950, AED 1,650 and AED 2,150 a month. If you are closing a VAT registration with credit still on the account, see VAT deregistration. If you will soon need structured e-invoices from your suppliers, read our page on e-invoicing in the UAE.
Frequently asked questions
How do I claim a VAT refund in the UAE for my business?
File the VAT return that shows the excess, make sure your bank details are on your tax registration, then submit form VAT311 through your EmaraTax account. Enter an amount up to the excess refundable VAT shown, upload the transaction template, the bank validation letter and supporting documents, and submit the declaration. The FTA may ask for more evidence before it decides.
What is a VAT refund in the UAE?
For a VAT-registered business, it is a cash repayment of excess recoverable tax. This arises when input tax is higher than output tax for a period, or when more has been paid to the FTA than was due. The FTA first offsets the excess against any tax or administrative penalties you owe.
Can I carry forward my VAT refund instead of claiming it?
Yes. If you do not request a refund, the excess is carried forward and used against later VAT. From 1 January 2026, though, a credit balance has to be reclaimed or used against tax liabilities within five years of the end of the relevant tax period, so it cannot be left on the account forever.
Can I claim a UAE VAT refund on all purchase bills?
No. Input tax is recoverable only on costs used for taxable business supplies, supported by a valid tax invoice or import document, and paid or intended to be paid within six months of the agreed payment date. VAT on entertainment for people who are not employees and on cars available for personal use is blocked, and costs linked to exempt supplies need apportionment.
How do exporters claim a VAT refund in the UAE?
Exporters use the same VAT311 claim. The key is the zero-rating evidence: a customs declaration with commercial evidence, or a shipping certificate with official evidence, showing that the goods left the UAE within 90 days of the date of supply. Without it, the FTA can treat the sale as standard-rated.
Is there a deadline for old VAT credit balances?
Yes. Where the five-year period for a credit balance expired before 1 January 2026, or expires within one year after that date, the refund request can be made until 31 December 2026. After that, the right to reclaim those balances lapses.
Is this the same as the tourist VAT refund?
No. Tourists reclaim VAT on shopping through a separate scheme when they leave the UAE. This page, and our service, cover refunds for VAT-registered businesses only.
Get a fixed-fee quote for your VAT refund claim
Send us your latest VAT return and the balance shown on EmaraTax. We will tell you what the claim involves and quote a fixed fee.
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