Key VAT Obligations EXPO 2020 Participants Should be Aware of

Dubai is gearing up to open the EXPO 2020 event on October 21, unperturbed by the COVID-19 pandemic that caused the postponement of the event to 2021. Most of the pavilions are ready, and some are open for the general public to visit. Each participating country has constructed its pavilion to exhibit its innovation and creation to the world. The participants, however, are bound to incur VAT on all expenses that are directly connected with the construction, installation, decoration and operation of the pavilions.

Expenses are also likely to be incurred on goods or services acquired or imported by the participants for personal or business purposes. The UAE government has introduced a VAT special Refund Scheme for the participants to reduce the costs they incur at the Expo. In this article, we discuss the VAT impact on and obligations of the Expo participants. Additionally,  official participants and business visitors can consult with VAT consultants in the UAE for a better tax consultation. Read ahead.

Who is Eligible for the VAT Refund?

The Cabinet Decision No. 1 of 2020 explains in detail the VAT refund eligibility of the Expo 2020 official participants.  According to the Cabinet Decision, official Participants with a valid Expo 2020 trade license number are eligible for the VAT refund. However, the official participants must not use or intend to use more than 20% of the exhibition space or presentation for non-official or commercial purposes.

What can be Reclaimed?

Normally, VAT on goods or services can be recovered in the UAE only when the goods or services are used to make or intended to make taxable supplies. VAT cannot be recovered if the expenses incurred are not related to any taxable supplies made by the person. However, the government has made an exception to this norm in the case of Expo 2020 participants. Official participants can reclaim VAT on the following categories of goods or services even though the goods or services are not used for making taxable supplies.

1. VAT incurred on goods or services directly connected to the construction, installation, alteration, decoration and dismantlement of exhibition space.
2. VAT incurred on goods and services for activities such as organizing exhibitions and events at the Expo 2020 site.
3. VAT incurred on supplies related to the office of the official participant given that the value of each Good or Service for which participant makes a claim is not less than AED 200.
4. VAT incurred by the Official Participant in connection with all operations, services and activities provided for the purpose of participation in Expo 2020 Dubai, whether located within or outside the boundaries of the Expo 2020 Dubai site.
5. VAT incurred on import of goods for the personal use of the Official Participant’s Section Commissioner-General, Section Staff and the Beneficiaries.

The requirement of VAT Registration

The rules of UAE VAT registration applies to the official participants of EXP 2020 as well. The participants must register with the Federal Tax Authority (FTA) if the value of their taxable supplies or imports (for commercial or non-official purposes) in the UAE exceeds, or is likely to exceed AED 375,000. They can also apply for voluntary UAE VAT registration if more than 20% of exhibition space is used for commercial or non-official purposes.

Participants who have registered for VAT should claim a refund from the Federal Tax Authority. However, the unregistered participants must approach the Bureau Expo 2020 Dubai (‘the Bureau’) for claiming the refund. The Bureau Expo 2020 Dubai was established under Decree No. 30 of 2014 issued by the Ruler of Dubai. FTA-approved tax agents in Dubai can assist the participants with VAT registration.

How Can Jitendra Chartered Accountants Help?

Official Expo participants can claim a refund of VAT incurred on import or acquisition of goods or services. The participants need to be aware of UAE VAT legislation and should maintain the necessary documents to account for VAT. The process would be complex for the participants and therefore expert assistance of the best tax consultants in Dubai such as Jitendra Chartered Accountants (JCA) becomes critical.

JCA’s experienced and qualified team can support the participants with all the administrative and accounting tasks to ensure VAT compliance. JCA’s registered tax agents in Dubai can support the participants with the following,

• Assess VAT obligations and compliance requirements.
• VAT registration.
• Support for the filing of periodical refund claims and VAT Returns.
• Regular updates on the approval process.
• Interaction and follow up with Bureau/FTA.