3 Mistakes That Can Get Your UAE VAT Claim Rejected

Since the UAE introduced VAT in 2018, many businesses have been caught off guard when their VAT refund claims are delayed or worse, rejected by the Federal Tax Authority (FTA). Even the most diligent finance teams can miss small details that lead to big compliance headaches.

Here are three common mistakes to avoid:

1. Claiming VAT on Ineligible Expenses Not all expenses qualify for input VAT recovery. Entertainment costs, certain employee benefits, and personal expenses often fall outside the scope. If you are unsure whether a purchase is linked to taxable business activities, check the FTA’s guidance before claiming.
2. Missing or Invalid Tax Invoices The FTA requires a valid tax invoice with specific mandatory details such as the supplier’s TRN, invoice date, and VAT amount. Missing or incorrect information, even a wrong TRN, can invalidate your claim. Always verify invoices upon receipt rather than at filing time.
3. Late Filing or Incorrect Period Reporting VAT claims must be submitted in the correct tax period. Claiming input VAT in the wrong return or delaying submission beyond the legal timeframe can result in rejection. A robust month-end process and timely reconciliations are key to avoiding this pitfall.

Important: Keep a VAT compliance checklist and train your team on common errors. Preventing mistakes is always cheaper and faster than fixing them after an FTA rejection..