Page 66 - Focus Group

Article 50(6-8) of the VAT Executive Regulations unregistered owners and then not claimed under
states that “an agent shall NOT recover as input tax box 10
any tax paid on behalf of another person Instead, it
shall issue a statement to that other person which 2. Imports done for non-business purposes
contains, at the minimum, all of the following Therefore, such input VAT amounts should not be
details and represents a valid tax invoice: deducted through the VAT return. Instead, company
Should issue a tax invoice to the customer/recipient
a) The name, address, and Tax Registration Number
(“TRN”) of the agent. unregistered with FTA and recover VAT amounts
paid upon importation of the goods into the UAE
b) The date upon which the statement is issued. from the Owner of the goods.
c) The date of Import of the relevant goods. This could potentially result in an additional cost
to the customer/recipient unregistered with FTA
d) A description of the imported goods.
who is not registered for VAT in the UAE and cannot
e) The amount of tax paid by the agent to the FTA in recover such input tax through submission of the
respect of the imported goods tax returns.

The above suggests that co. is not entitled to
recover input tax incurred in relation to importation
of the components into the UAE Mainland on behalf
of the Foreign Customer (i.e. the Owner).

The owner of the goods would be entitled to recover
the import VAT as per its normal VAT recovery
position, if applicable. Moreover, the import has to
be for the purpose of business.
CA Dilip Jain
The difference in box 3+box 6+ box 7 – box10 can be
for two reasons Disclaimer:
This article and/or write ups and/or any of its content shall not be treated as opinion and/
or advice in any circumstances of the author(s) and/ or the Chapter. Reader’s to apply their
1. Imports done by agent on behalf of best judgement in the best interest of their requirement and should seek a formal opinion
on any issue.

66 TAX JOURNAL 2020 The Institute of Chartered Accountants of India (Dubai) Chapter NPIO