UAE's Federal Tax Authority (FTA) held an Online Workshop with 213 accredited tax agents and many Authority Officials participants which addressed all queries around the procedures, time frame and criteria for recovery of Input Tax. Explanatory presentation on common inquiries regarding tax procedures was also given with correct interpretation along with a few examples of their legal applications.
As per clarifications form the Authority, the input tax on certain expenses was available as discussed below:
Expenses related to COVID-19 like sanitization of workplace and testing of employees. Full input tax is recoverable only if the entity is engaged in the business of making taxable supplies. Partial recovery is possible if the entity makes partial taxable and partial exempt supplies.
Testing of employee’s family is an eligible expense for recovery of Input Tax only if the expense was borne by the employee.
Other expenses like marketing and entertainment expenses, vehicle expenses and events beyond taxation controls were also addressed along with treatment of input tax under reverse charge mechanism. With respect to application of special methods for apportioning input tax, the authority discussed the most common reasons for requesting further information.
As per the Director- General of FTA, Khaled Ali Al Bustani, the virtual workshop was a step to update the agents with continuous developments in the tax regime along with keeping a steady communication between the authorities and the rising number of FTA approved tax agents of the tax payers who have increased by 31% over the past year.
You can access Law including Guidelines, Cabinet & FTA Decisions, Public Clarifications, Forms, Business Bulletins for all taxes (Vat, Excise, Customs, Corporate Tax, Transfer Pricing) for all GCC Countries in the Law Section of GCC FinTax.