Save on Taxes Correctly | 5 FAQ Non Recoverable Input VAT | UAE | FTA | Entertainment | Vehicle |

One of the most asked questions by our clients in the UAE is whether input VAT on certain expenses is recoverable or non-recoverable. So here we have answered some of the most important and frequently asked questions about Non-Recoverable Input VAT.
You need to be very careful on input VAT recovery when filing for the VAT returns. If a Non-Recoverable Input VAT was claimed, this could lead to penalties. So it is always best to stay aware of this if your business is registered for VAT.
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TimeStamps
0:00 Intro - Nonrecoverable input VAT in UAE
0:57 Can a business claim VAT expenses (like food and refreshments) on client meetings?
2:05 Can VAT normal office expenses be claimed by a business?
2:50 Can VAT on office party-related expenses be claimed by the VAT registrant?
3:43 Can VAT on the purchase of a car be claimed in the VAT return?
4:12 Can VAT related to exempt supplies be claimed?
4:45 Conclusion - Expenses where VAT claim is not allowed
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We are one of the oldest audit firms based out of UAE, with over 30 years of experience. This makes us one of the pioneering audit firms in the UAE. We are experts in Audit, Accounting, Taxation & Consultancy related services. Get in touch with us for more professional advice on your company's VAT compliance requirements in UAE.
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[@mahammadziyad8999]

Good explanation of the topic.

[@MSIAuditors]

Thank you for your positive feedback.

[@zietekatorze6927]

Good explanation. Can I ask is it correct to create a seperate GL acccount for irrecoverable input vat? If yes, where will you categorize it in the P&L statement. thanks

[@MSIAuditors]

Well, it is ok to do so if the management wants to see the amount of VAT not recovered. However, the right way is to directly expense the VAT in the respective expense ledger the transaction is relating to. Hope this helps. -MSI Team

[@muhammadakbar9049]

Hi. We had imports of goods into UAE in 2022. We were not registered with UAE VAT at that time. Now we are registered with UAE vat. Can we claim input of vat paid in 2022 against imports now?

[@mohdrafeeq3567]

hello sir, actually i have some expenses like staff food expenses and staff water expenses and company car passing expenses and taxi charge paid to the employee and etc can i claim vat return on it.

[@MSIAuditors]

As long as they are not material and in the normal course of providing business, they can be claimed. However we recommend our clients not to claim this as normally it is not a material figure, and it is difficult to justify that personal expenses are not claimed. -MSI Team

[@hardtalksvlogs1993]

I 'm a new for dubai. I want to learn uae vat. I watch your video. I want to know all the unrecoverable input vat list in uae. Please mention this

[@MSIAuditors]

Most of them are listed in this video. It's hard to create a general list for all types of businesses. Best to review each business independently. -MSI Team

[@habeebtharon7890]

Hii Our company filed input vat in 2018 which is not claimable ( eg : vat on medical insurance for employee family members) Now i noticed the same, and im in charge to claim the input vat. The mistake was done by the former accountant. What i can do now?

[@MSIAuditors]

Hi Habeeb, If the error is above AED 10,000 you must file a voluntary disclosure. If below then you may adjust this error in the next return. -MSI Team

[@bondjemsbond7143]

Hello sit what is the vat treatment for car rental business

[@MSIAuditors]

If the vehicle is used solely for the rental business, you may claim the input VAT on vehicle-related expenses.

[@bondjemsbond7143]

Thank you sir

[@mudasserla234]

For Etisalat office telephone and internet expenses is the VAT fully recoverable. My previous company consultant had advised to take only 50% of the input VAT. Can you please clarify on this.

[@MSIAuditors]

If the expense is fully for business purposes it is recoverable. However, there may be some cases where Simcard given to the team may be used for personal purposes and the company does not have a proper policy to control the same. In such a case we recommend not to claim.

[@ssyed7954]

​@@MSIAuditors

[@sajispanicker5789]

Purchased a car for company only for business purpose can't be claimed input vat in uae?

[@MSIAuditors]

If you are able to prove that it is purely used for business purposes, and no personal use, then it can be claimed. Normally very difficult to prove this. -MSI Team

[@unitedworldcare9497]

How to to download previous 5 times vat return

[@MSIAuditors]

Thank you for your question. Sure you can download all the VAT returns. There is a view button next to each return. Once you click that a download option will be available. -MSI Team

[@bondjemsbond7143]

How can we calculate the vat only out put vat we have to consider or we need to take input vat on repair and maintenance and spare parts purchase like this kindly explain

[@MSIAuditors]

Out put VAT and input VAT both need to be reported in the return.

[@shaheenmehar7671]

Sir my owner has incur some personal expenses.. He wants input tax recover from FTA Cloths or other grocery, hospital bills he incur for himself and his family He needs Writtle proof for non recoverable tax

[@MSIAuditors]

The law clearly states that personal expenses cannot be claimed. The proof is in the law intself. - MSI Team

[@ibnemahjamal]

Dear Sir, after registration, if the company could not achieve 375 k turnover so what to do? any penalty? and before VAT registration if the paid already VAT on some expenses so how it can be claimed??

[@MSIAuditors]

Assuming you are registering on the basis of the expected 30 days, after registering you realized you dint achieve all the sales? You will need to deregister then. Expenses before registration can be claimed in the first return after registration. -MSI Team

[@ibnemahjamal]

@@MSIAuditors thank you so much sir

[@MSIAuditors]

@@ibnemahjamal You are welcome. Happy to be of assistance.

[@savithavijayan2599]

Can you elaborate 1:55 - If the expenses on food and refreshments are not considered substantial, then they cannot be claimed?

[@MSIAuditors]

That was an error If it is considered substantial they cannot be claimed. Thank you for pointing it out.

[@savithavijayan2599]

@@MSIAuditors Have you done any videos on export documentation and other VAT provisions in regard to Export..

[@MSIAuditors]

@@savithavijayan2599 kzbin.info/www/bejne/a6bQlJRveLOmitk here you go. Hope this helps.

[@muhammadhabubacker8890]

What about the fuel and maintenance costs of such motor vehicles? VAT can be claimed?

[@MSIAuditors]

We recommend not to claim this, as it will be difficult to justify how much is personal and how much is company use.

[@muhammadhabubacker8890]

@MSIAuditors yes instead the law can allow like 50 - 50

[@muhammadhabubacker8890]

@@MSIAuditors thanks for the reply

[@sachinkoran9267]

Building and office Rent vat recoverable...? Or not.....?

[@MSIAuditors]

VAT on Office rent is surely recoverable, as long as the office premises are not used to make exempt supplies.

[@hadipatel5344]

If llc is established in designation zone then comapny can recover VAT ?

[@MSIAuditors]

Hi Hadi, Yes if you are eligible to be registered you may claim the VAT. -MSI Team

[@hadipatel5344]

@@MSIAuditors in which circumstances designated zone company eligible for register?

[@MSIAuditors]

@@hadipatel5344 Well this really depends. For example, if the company in the designated zone is providing services locally or internationally, this service is taxable. Since the income is taxable the relevant expenses are allowable to recover as well.

[@hadipatel5344]

@@MSIAuditors thanks alot..

[@MSIAuditors]

@@hadipatel5344 Glad to be of assistance.

[@muhammadidrees8466]

We paid custom duty to clearance agency.and paid vat to auction for buying machine against invoice.but now showing same in fta portal box 6. Not what we do.this is double vat payment

[@MSIAuditors]

Can you clarify the movement of the machinery in this transaction? Was this purchased locally within a freezone?

[@muhammadidrees8466]

@@MSIAuditors yes purchased in jabel ali auction

[@MSIAuditors]

Have claimed any VAT that was nonrecoverable? #msiauditors #learnonyoutube #learnonline #learningvideos