Input Vat Recovery on Expenses

If the business is registered under VAT, they can claim a refund on expenses (the end consumer cannot claim any input tax refund). Business must have proper documents to claim its input VAT.

As per UAE VAT LAW there are certain conditions for claiming VAT on expenses. You cannot claim VAT for all your expenses. As you know, the UAE VAT LAW clearly sets out the conditions for business to recover input VAT on expenses and lists the expenses that are blocked for recovery of input VAT.

But there are some expenses on which you can claim your input VAT. Here are some expenses on which you can claim input vat:

  • Petrol expenses
  • Conveyance expenses to employees
  • Medical insurance expenses
  • Legal consultation expenses
  • Food and drinks provided to a customer during the course of meeting
  • Capital expenditure incurred by the service industry

Taxable person can claim is input tax on taxable supply if it is directly related to its business. If the supplies are standard rated or zero rated, he can recover the input tax.

And if supplies are exempt, he can not recover input tax. And if some supplies are taxable and some of them are exempt, then he can not claim input VAT on exempt supplies. VAT can claim Only on taxable supplies.

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