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Unlocking VAT Expenses Your Business Can Reclaim

Running a business can be a financial juggling act, and in the UAE, Value Added Tax (VAT) is a part of that equation. But did you know many businesses leave money on the table by not claiming back VAT expenses? In this article, we’ll break down the VAT expenses that your business can recover without breaking a sweat, especially if it’s VAT-registered in the UAE. Let’s dive in!

Medical Insurance Expenses

Picture this: Your business in Dubai provides health insurance for all your employees, and you’re paying a 5% VAT on those insurance costs. The good news? You can recover the VAT paid for medical insurance. The UAE Federal Tax Authority (FTA) allows VAT-registered businesses to reclaim VAT on expenses related to their legal obligations under labour laws. So, that 5% can come back to your pocket.

Any Legal Consultation Expenses

Legal matters can be tricky, but here’s the scoop: If your business engages in taxable goods or services and pays VAT for legal consultation services, you can still recover that VAT. You don’t need to connect every purchase with an outward supply. Some purchases, like legal expenses, are essential for running your business daily. If you’re uncertain about VAT recovery for legal expenses, consider consulting a regulated tax agent for guidance.

Capital Expenditure

If your business falls under the service industry, you’re in luck. VAT on capital expenditures can be recovered. For instance, a law firm buys new office desks for their staff. Since these desks will be used for taxable activities, you can recover the VAT incurred during the purchase. It’s as simple as that.

Food and Beverage for Customers or Clients

We all know the importance of wining and dining clients. Fortunately, in the UAE, you can reclaim VAT on simple, non-extravagant meals provided to customers or clients during meetings. However, taking clients out for lavish dinners won’t be eligible for VAT recovery. The UAE VAT legislation permits VAT-registered businesses to recover input VAT on entertainment expenses, but only if they occur during a normal meeting. Lavish dinners and extravagant outings may raise red flags with authorities, so tread carefully.

Petrol Expenses

If your business involves supplying goods and you’ve incurred significant petrol expenses for deliveries, good news – you can fully recover the VAT paid on those petrol expenses. However, things get a bit trickier if you use petrol for both business and personal purposes. To ensure a smooth VAT recovery process, it’s crucial to keep meticulous records of petrol usage for business purposes.

Conveyance Expenses for Staff Members

Late-night shifts often require transportation for staff members, and if this is stated in their employment contracts, you’re in the clear to recover VAT paid on conveyance expenses. When a contractual obligation or documented policy provides services or goods to employees, it allows the employer to fulfil their role. This practice is considered a typical business practice within the employment terms.

Visa Expenses for Administration and Employees

If your business experiences visa processing costs for employees and you’re charged 5% VAT, you can recover the VAT paid. These costs are considered part of your everyday business operations, enabling you to recover input VAT for such expenditures.

In a nutshell, understanding VAT expenses that your business can recover is like finding hidden treasure. Many companies are unaware of these opportunities, leaving money unclaimed year after year. By checking out these VAT recovery options, you’re giving your business’s financial health a nice little boost and making sure you’re not leaving any money behind. So please don’t hesitate to contact us to learn more about VAT refunds in the UAE. We welcome you with open arms and are prepared to help you through the procedure so you can fully realise the possibilities of your trip to reclaim VAT charges. Our top priority is your business, and we’re eager to assist you in growing it!