Input Tax Recovery on construction

A UAE National registered with FTA with effect from 01.01.2018 because he has taxables supplies in form of leasing of commercial properties. From April 2018 he enters contract with the construction company to construct labour camps. Since then labour camp is under construction and for the year 2018,2019 and 2020 input VAT is AED 0.85 million.

My question is that can whole 0.85 million input VAT can be claimed in the current quarter Or to wait till the construction of labour camps gets completed Or to go for the voluntary disclosure for the past periods in order to claim input VAT ?

Rahib Tinwala

19/05/2020 20:06:13

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SAJITH N19/05/2020 21:27:32

Voluntary disclosure is required where time limit as per Art 55 of DL has expired. One need not wait until construction is completed to claim Input incurred on development costs.

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CA Rahib Tinwala19/05/2020 22:01:40

Sale of incomplete or complete labour camp will be taxable at standard rate or zero rate ?

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SAJITH N19/05/2020 22:24:48

it will be zero rated provided sufficient approvals from relevant authorities are available to prove the building is intended for residential purposes. I believe this scenario is addressed in the Real Estate guide

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CA Rahib Tinwala19/05/2020 22:44:30

Thank you. I will refer the real estate guide

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