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This guide provides detailed guidance on the special VAT refund mechanism for constructing and operating Mosques in the UAE. It clarifies the application of Cabinet Decision No. 82 of 2022 and Ministerial Decision No. 162 of 2022. The document outlines the specific eligibility criteria for both Donors (for construction) and Operators (for operation) to recover input tax. It details the definition of eligible goods and services, mandatory documentation such as the Mosque Operation Commencement Certificate, and the formal process for submitting refund requests through the FTA's e-Services platform, including specific timelines and verification procedures.

Refund of VAT Incurred on the Construction and Operation of Mosques

VAT Guide | VATGRM1

November 2022

1. Overview

1.1. Short brief
1.2. Purpose of this guide
1.3. Who should read this document
1.4. Status of the document
1.5. Legislation

2. Recovery of VAT incurred to construct a Mosque

2.1. How does it work?
2.2. Meaning of 'construction of a Mosque'
2.3. Who is eligible?
2.4. Eligibility Criteria
1. 2.4.1. Donor must have incurred the VAT
2. 2.4.2. Eligible goods and services
3. 2.4.3. Mosque Operation Commencement Certificate
2.5. Process and timelines to request a refund
2.6. Verification and audit process
2.7. Retention payments
2.8. Summary

3. Recovery of VAT incurred to operate a Mosque

3.1. How does it work?
3.2. Who is eligible?
3.3. Eligibility criteria
1. 3.3.1. Operator must have incurred the VAT
2. 3.3.2. Eligible goods and services
3. 3.3.3. Written permit issued by the Competent Authority
3.4. Process and timelines to request a refund
3.5. Verification and audit process
3.6. Summary

Overview

Short brief

VAT was introduced with effect from 1 January 2018 in the UAE. As a general consumption tax on the supply of goods and services, it applies to supplies made within the territorial area of the UAE.

It is common in the UAE for persons to build and operate Mosques. These activities generally do not constitute the carrying on of a business and input tax may not be recovered under the normal VAT recovery rules.

The FTA may return VAT paid on any supply or import incurred by a person, or class of persons, listed in a Cabinet Decision. Cabinet Decision No. 82 of 2022 on the Refund of Input Tax Incurred on the Construction and Operation of Mosques was issued on 16 August 2022, and provides for a special refund mechanism for eligible persons constructing and/or operating a Mosque, provided certain conditions are met. For purposes of this Decision, the term 'Mosque' is defined as the space allocated for prayers and also includes the Mosque's yard, entrances, annexures, and facilities.

Purpose of this guide

This document contains guidance about the requirements of and process to recover input tax incurred on the construction and operation of Mosques.

Who should read this document

This document should be read by persons constructing and/or operating/maintaining a Mosque in the UAE.

It is intended to be read in conjunction with other relevant guidance published by the Federal Tax Authority ("FTA").

Contents

Overview

Short brief

Purpose of this guide

Who should read this document