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UAE: Tax authority starts accepting VAT refunds on expenses incurred in running of mosques

Requests can be made for goods or services related to operation or maintenance

The Federal Tax Authority (FTA) has now started accepting refund requests for Value Added Tax (VAT) incurred on the operation of mosques through its EmaraTax digital tax services platform, in line with the Cabinet and Ministerial Decisions that have taken effect for all UAE mosques.

Refund requests must be submitted within set deadlines, based on the date of operation of the mosque. The FTA will receive tax refund requests for the operation of mosques that began before January 2022 1, covering 2018-2022, from April to September 2023.

Meanwhile, from October to December 2023, the Authority will receive tax refund requests for mosques that began operation on or after January 2022 1, covering 2022. Mosques must submit tax refund requests for their operation between January and April of the following year for any given year after 2022.

“Back in November, the Federal Tax Authority launched a mechanism to recover the Value Added Tax incurred on building and operating all mosques around the UAE with a simple, straightforward procedure on the EmaraTax platform for digital tax services,” said FTA Director-General Khalid Ali Al Bustani. “The procedure is in line with criteria specified in the Cabinet Decision in this regard, which can be viewed on the FTA’s website, and outlines the conditions for submitting applications, the specific expenses that can be recovered when it comes to building and operating mosques, and the documents required. Furthermore, to facilitate and expedite the refund process, a Ministerial Decision was issued specifying timelines for submitting applications based on the completion date of the mosque’s construction.”

“As part of the Authority’s policies to raise awareness about the developments and continuous updates to the tax system, a guide was issued to explain the procedures for recovering VAT on the construction and operation of mosques on the FTA website,” he added. “The guide includes a detailed explanation on all matters related to tax recovery on building and operating mosques, including the conditions to be eligible for refund, the required documents, recoverable expenses and the online procedures to seamlessly issue a refund.”

The FTA Director General called on all stakeholders to read the Cabinet Decision and the Ministerial Decision issued in this regard, as well as the guide, which includes ample information about the procedures and timelines for receiving refund requests.

The Federal Tax Authority has clarified that in order to request a refund on input tax incurred on operating a mosque, certain conditions must be met as per the Cabinet Decision. The operator may request a refund of input tax for goods or services that are directly related to the operation or maintenance of the mosque, provided that it is not related to any commercial facilities related to the mosque. Additionally, the mosque must be registered as a mosque with the competent authority, and the operator must hold a valid written permission to operate the mosque issued by the competent authority for the period of the refund request.

The Authority has also specified the necessary documents for completing the refund application for input tax incurred on operating a mosque. These include a copy of the Emirates ID or passport, a bank account certificate, a chart of expenses incurred for operating the mosque, and a copy of the five highest tax invoices.

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