VAT recovery in the UAE is another thorn in the process of reclaiming the tax

The introduction of VAT in the UAE and Saudi Arabia will have implications for conference and event businesses, as companies not registered for the tax in both countries will pay the levy when they hold events, according to a VAT recovery firm.

"For businesses that are not VAT registered in the region, both sets of legislation [in the UAE and Saudi Arabia] have indicated a mechanism is going to exist for businesses to make standalone claims to recover VAT they might have incurred on hotels, subsistence things like that when visiting the country on business meetings,” said Richard Barrett, head of consulting for the UAE at VAT IT.

The UAE and Saudi Arabia are the only two GCCcountries to introduce VAT at a rate of five per cent in January as a means to boost government revenue dented by low oil prices.

Companies around the world are losing out on $20 billion globally every year in unclaimed VAT, according to VAT IT. This is mainly due to the complex and time consuming European rebate system, which leaves businesses less inclined to recover the VAT they paid. The figure is high because more than one-fifth of companies who incur VAT in foreigncountries say they are unable to recover it, due to procedures being too complex and burdensome.

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