FTA Approves AED 2.54 Billion In VAT Refunds For UAE Nationals' Home Construction

The Federal Tax Authority (FTA) has approved 30,920 applications for Value Added Tax (VAT) refunds, totalling AED2.54 billion, submitted by Emirati citizens for taxes incurred on building new residences since the service's launch until mid-2024. By mid-2023, 23,340 applications worth AED1.54 billion were approved, marking a 32.45% increase in approved applications and a 65.07% rise in refunded amounts over a year.

Between June 2023 and June 2024, the FTA approved 7,580 new applications, allowing citizens to reclaim over AED1 billion in taxes paid on new homes. In the first half of this year alone, 3,590 new applications were approved, refunding AED336.09 million in taxes.

Khalid Ali Al Bustani, Director-General of the FTA, attributed the significant increase to heightened tax awareness and continuous improvements made by the Authority since its launch six years ago. "These enhancements include introducing more facilities to streamline and expedite the refund process for UAE citizens who meet the legal requirements for tax refunds," Al Bustani said.

This year saw the launch of the Maskan smart application by the FTA. This app provides further facilities for UAE citizens to request VAT refunds on new home construction with fully digital and paperless procedures. "This allows Emirati citizens to benefit from digitisation efforts and expedite the tax refund process," Al Bustani explained.

Al Bustani emphasised that these initiatives align with the Federal Tax Authority’s strategy to prioritise citizens’ happiness as per leadership’s vision to enhance a modern housing system for Emiratis. The initiative is part of the Transformational Projects Series aimed at advancing digital services and reducing paper consumption.

Educational Campaigns and E-Services

The FTA continues to develop its services and educate citizens about streamlined e-services available for VAT refunds on new residences. "These include virtual meetings to offer consultations and clarifications, answer enquiries, and allow direct communication with FTA staff handling VAT refunds on new homes," noted Al Bustani.

The Authority also provides videos and guides on its website and social media platforms outlining steps required for applying for VAT refunds—from submitting applications with supporting documents online to receiving refunded amounts in bank accounts.

Historical Data on Approved Applications

Statistics from the FTA reveal a notable increase in approved applications since the service was first offered to UAE citizens. Approved requests rose from 270 worth AED9.11 million in 2018 to 1,900 valued at AED121.46 million in 2019. This trend continued with 3,750 applications worth AED301.35 million in 2020—a significant rise of 97.16% in numbers and a 148.1% uptick in refunded amounts.

In 2021, there were 5,990 approved applications worth AED467.52 million—an annual growth of 59.62% in numbers and 55.14% in refunded amounts. The upward trend persisted into 2022 with 7,170 requests worth AED583.38 million—showing a growth of 19.61% in numbers and 24.78% in refunded amounts.

Figures for 2023 indicated continued growth with a total of 8,250 applications worth AED720.12 million approved—marking a yearly growth of 15.06% in approved requests and a rise of 23.44% in refunded VAT amounts.

The FTA’s ongoing efforts have significantly benefited UAE citizens building new residences through increased awareness and improved services aimed at expediting tax refunds efficiently.

With inputs from WAM