UAE VAT Refunds for Businesses: When You Are Owed Tax and How to Claim It.

Most VAT-registered businesses pay the Federal Tax Authority (FTA) every quarter or month. Some are regularly in the opposite position: the VAT they paid on purchases is higher than the VAT they charged on sales. That difference is money the FTA owes them.

This guide covers refunds for businesses only. Tourists and UAE nationals building a new home have their own separate refund schemes, which we do not cover here.

When a business is in a refund position

Your VAT return compares output tax (VAT on your sales) with recoverable input tax (VAT on your purchases and imports). When input tax is higher, you have excess recoverable tax. The VAT law also covers a second case: where you paid the FTA more than you actually owed.

Common reasons a business ends up in credit:

• Zero-rated sales. Exports of goods and services outside the GCC implementing states, and international transport, are zero-rated. You charge no VAT, but you still recover VAT on your costs.
• Heavy one-off spending. Fit-outs, equipment or stock bought ahead of a busy season.
• A new business. Costs run ahead of revenue in the first periods after registration.

Claim now or carry forward

You do not have to claim. If you do not submit a request, the excess is carried forward to later tax periods. The FTA also offsets it against any VAT payable or administrative penalties you owe before repaying anything.

A refund can be requested after you submit the return, or at any later time while the credit remains, but there is now a hard limit. From 1 January 2026, Federal Decree-Law No. 17 of 2025 sets a period of no more than five years from the end of the relevant tax period to request a refund of a credit balance or use it to settle tax. The Ministry of Finance says that once this period has passed, the right to reclaim expires. For balances whose five-year period expired before 1 January 2026, or expires within one year of that date, a transitional rule allows a refund request within one year from 1 January 2026.

How to claim on EmaraTax

1. Log in to EmaraTax and open the VAT tab.
2. Open the refund form, VAT311.
3. Enter the amount you want refunded. It cannot exceed the total excess refundable tax shown, which is already reduced by any penalties due.
4. Attach the supporting documents and submit.

The FTA lists these documents for a VAT311 request: an output and input tax report, and tax invoices and supporting documents. Its refund user guide also asks for a bank account validation letter, issued and stamped by your bank, showing the account holder name (which must match your name as registered with the FTA), the bank's name and address, the SWIFT or BIC code, and the IBAN. There is no fee.

What the FTA checks

The FTA is checking that the input tax you are claiming was recoverable in the first place. Under the VAT law, input tax can be deducted once you:

• hold a valid tax invoice (or import documents) that includes the details of the supply;
• have paid the consideration, or part of it, as the Executive Regulation specifies; and
• keep the tax invoice in the electronic format where e-invoicing applies.

From 1 January 2026, the FTA can also deny input tax where it finds that a supply forms part of a tax-evasion arrangement. The Ministry of Finance says taxpayers are expected to verify the legitimacy of their supplies before claiming.

Timelines

The FTA service page gives these timelines:

• Standard review. 25 business days from the date the completed application is received.
• Audit review. 55 working days from the date all requested information was provided, where the request needs further investigation by audit.
• Missing information. If the application is incomplete, the FTA asks for more documents, and it may take a further 25 business days after you provide them.

The FTA can also tell you it needs longer where it has reasonable grounds. Its refund user guide states that approved amounts are paid within 5 business days, and that payment to an international bank without a UAE correspondent bank may take longer.

Why refunds are delayed or rejected

From the FTA's guidance and the law:

• No bank details. The user guide says requests without bank account details on the registration record are rejected.
• Name mismatch. The account holder name on the bank letter must match the registered name.
• Incomplete application. Every request for more documents restarts a 25 business day clock.
• Unpaid penalties. Penalties are offset first. If they exceed the credit, the guide says the application will be automatically rejected.
• Input tax that does not qualify. Missing or invalid tax invoices, or unpaid supplier bills, mean the input tax behind the claim was not recoverable.
• Suspect supplies. Input tax linked to a tax-evasion arrangement can be denied.
• Old balances. A credit older than the five-year limit can no longer be reclaimed.

A worked example

"We export most of what we sell. Last quarter our output tax was AED 20,000 and our recoverable input tax was AED 95,000. We also still owe the FTA AED 1,000 from an earlier penalty."

• Excess recoverable tax. AED 95,000 less AED 20,000 is AED 75,000.
• Offset. The FTA offsets the AED 1,000 penalty, leaving AED 74,000 available to claim.
• Claim. The business submits VAT311 for AED 74,000 with its tax report, invoices for the largest purchases and export evidence ready, and a current bank letter.
• Timing. With a complete file, the FTA's stated review time is 25 business days. If the FTA asks for export evidence it does not yet have, a further 25 business days may follow.

Clean records speed things up

The VAT law already requires records of all supplies and imports, tax invoices and credit notes issued and received, exports, and a tax record of tax due and recoverable. For a refund, keep each purchase invoice with proof of payment, export documents matched to each zero-rated sale, and a reconciliation of the return to the ledger. With monthly bookkeeping, an FTA query takes days to answer, not weeks.

How we help

As part of our VAT return filing service, we reconcile your input and output tax each period, flag invoices that would not support a claim, keep track of credit balances and their age, and prepare the supporting schedules you need when you decide to request a refund.

Frequently asked questions

Do I have to claim a VAT refund straight away?

No. If you do not request a refund, the excess is carried forward to later tax periods and can be offset against VAT or penalties you owe. You can apply later, but a refund request must now be made within five years from the end of the relevant tax period.

How long does the FTA take to decide a VAT refund?

The FTA service page gives 25 business days from receipt of a complete application. If the request needs further investigation by audit, it gives 55 working days from the date all requested information was provided.

Can the FTA keep part of my refund?

Yes. The law allows the FTA to offset excess recoverable tax against tax payable or administrative penalties before anything is repaid, so unpaid penalties reduce the amount you receive.

Is there a fee to claim a VAT refund?

No. The FTA lists the refund service as free.