The UAE Federal Tax Office (" FTA ") has issued a public clarification VATP017 "Time limit for Claiming Input Tax Deductions". VATP017 clarifies the FTA on when input tax can be credited through VAT and the recourse available to taxpayers who fail to declare input tax within the specified time.

The statement clarified the FTA's position on the interpretation of article 55 of the VALUE-ADDED Tax Act and discussed the need to deduct input tax time limit.

》》Taxpayers receive invoices but may have no intention of paying until the internal approval process for invoices is completed. In this case, the conditions of section 55 (1) of the VAT Act cannot be satisfied because the payment has not been made before it is due six months after the agreed payment date.

》》FTA Think only when a taxpayer Complete the internal approval process and intend to pay within the specified period when,In order to satisfy the conditions of section 55 (1) of the VAT Act.

In view of the above, before deducting input tax, the taxpayer needs to prove that, in addition to receiving the tax invoice, he has met the conditions for the payment to be made within a predetermined period.

1、Input tax if a tax invoice is received during one reporting period and the intention to pay is formed during subsequent reporting periods Only after Within the reporting period.

2、If input tax is not deducted in the current period in which both conditions are met, Taxpayers need to be able to The next filing period is immediately deductible.

3、If the Two consecutive reporting periods Are not deductible for input tax, then the taxpayer needs to complete the process with the tax bureau Voluntary disclosure（voluntary disclosure). Provide detailed declaration supporting materials to the tax bureau and explain the reasons for the failure to timely declare. Only through the inspection and approval of the tax bureau can the revision of the previous quarterly declaration be completed.