United Arab Emirates: VAT payments and refund for participants of the Expo 2020

​published on 17 September 2021 | reading time approx. 2 minutes

     
Expos, respectively World Exhibitions have taken place for 170 years. They are a platform where the most recent and most significant innovations of the present time are being presented. For the first time in history, the world exhibition takes place in the Middle East. On 1 October 2021, Dubai opens the doors to the Expo where more than 190 participating nations will be present and add their value to this Expo.
  

There will be so-called ‘theme weeks’ (where each week is dedicated to a certain topic), discussions and entertainment programs. Furthermore, the participating nations will present and bring their own cultures closer to the visitors by (amongst others) opening restaurants, grocery shops and souvenir shops serving and selling traditional foods and souvenirs.
 
Consequently, economic activities are being exercised at the Expo which results in the arising of the tax matter. However, as since January 2018, the UAE have only introduced the Value Added Tax, the matter of other tax related questions is unessential.
 
The local Tax Authorities were aware of the Expo 2020 upcoming tax related matters and thus came up with an Expo-related VAT-Guide for Expo participants. This guide sets out, clarifies, and regulates the tax-related duties and rights of participants during their short stay in the UAE (approx. 7 month).
 
The guide is partially based on the VAT law in the UAE. It mentions that participants are required to register with the tax authorities for VAT related matters as soon as their sales exceed the threshold amount of AED 187,500 (approx. EUR 43,000). As long as this threshold amount will not be exceeded, participants are not obliged to pay sales taxes.
 
Besides the VAT, the input tax is also being considered. This is basically also a kind of VAT, that is however paid for the company’s own costs. Therefore, a part of the paid costs of the Expo participants is paid input tax, that can be reimbursed by making use of the so-called input tax refund system.
 
Participants that due to the value of their sales have registered with the relevant tax authorities, can have the input tax credited within the framework of their sales tax return and have it reimbursed if applicable. For the first time, the Expo VAT Guide offers a so-called “Special Refund Application” for participants that are not registered with the authorities and have not exceeded the threshold amount. This request for a refund of input tax can be submitted by the participant on a monthly or yearly basis, depending on the amount of his input tax claim.
 
It is to be seen how fast the refunds will be reimbursed and how the control of the tax authority will take shape at the Expo 2020. One thing is clear, the Expo 2020 in Dubai is surprising us with tax related as well as with cultural and innovative news.