UAE Federal Tax Authority conducts workshop for 213 approved tax agents to review procedures for recovering input tax

The Federal Tax Authority has held an online virtual workshop for accredited tax agents, which addressed the timeframe for input tax recovery and redemption procedures.

During the workshop, which was held with the participation of 213 accredited tax agents and a number of Authority officials, participants' inquiries were answered, clarifying the criteria and procedures for recovering input tax incurred for specific expenses. Such expenses included those related to the COVID-19 pandemic, marketing and entertainment expenses, vehicle expenses, and events beyond taxation control.

The Authority clarified that with regard to the expenses associated with COVID-19, such as the sterilizing of workplaces and the testing of employees, are considered general expenses. Input tax is recoverable in the event that the supplies and services made by the business are themselves taxable. In the event that the business is making taxable supplies only, the input tax is fully refundable. However, in the event that the business is making taxable and tax-exempt supplies, the input tax will be partially refundable.  The FTA also indicated that input tax cannot be recovered on the expenses of testing employees’ families unless the employee bears the cost.  

During the workshop, representatives of the Federal Tax Authority gave an explanatory presentation on tax procedures that were enquired about by a number of tax agents. They discussed some of the technical aspects that could be misinterpreted and explained the legal principles, providing examples of their application. 

The Authority representatives explained the procedures for deducting input tax in accordance with the reverse charge mechanism, and the provisions related to the standard method for apportioning input tax. The FTA representatives also presented the most common reasons for the Authority to request further information in respect to applying to use of one of the special methods for apportioning input tax.

His Excellency Khaled Ali Al Bustani, Director-General of the Federal Tax Authority, said: “The virtual workshop came within the framework of awareness meetings that the Authority is keen to organize periodically within its strategy for continuous communication with its relevant partners in the governmental and private sectors. This has the aim of introducing the Authority's latest programs and initiatives, reviewing new activities to keep pace with the changes taking place in the national economy, and the latest updates and developments on the Authority’s electronic systems.”

H.E. added: “There is a steady increase in the number of tax agents accredited by the Authority in line with the continuous growth of taxable persons within the tax system. The number of tax agents at the end of H1 2020 reached 485, compared to 370 at the end of the first half of last year; a 31% increase."

H.E. concluded: “The steady increase in the number of approved tax agents provides more opportunities for taxpayers to deal with the Authority through a well-regulated system. Taxpayers can choose from a list of approved tax agents, which is being constantly updated on the Authority’s website, to provide advisory and representative support to taxpayers, enabling them to perform their duties and obligations towards the Authority.”