Introduction

Constructing a mosque involves various expenses, and individuals or construction companies undertaking such projects may be eligible for a refund of the Value Added Tax (VAT) incurred during the construction process. This guide outlines the process, eligibility criteria, and necessary documentation for obtaining a VAT refund.

• Initiating the Refund Process: Individuals or construction companies, referred to as “Donors,” can request a VAT refund by submitting a “Mosque Construction Refund Request” to the Federal Tax Authority (FTA).The request undergoes review by a verification body appointed by the FTA to ensure eligibility and determine the refundable amount.
• Defining “Construction of a Mosque”: For VAT recovery, “construction of a mosque” includes expenses incurred before the mosque becomes operational, such as the construction process, equipping and furnishing, supply of necessary equipment, and maintenance.
• Eligibility Criteria: To qualify for a VAT refund, the Donor must meet specific criteria, including incurring the VAT, acquiring goods and services exclusively for mosque construction, and obtaining a Mosque Operation Commencement Certificate.
• VAT Incurred by the Donor: The Donor is considered to have incurred VAT if the supplier(s) charged VAT, the Donor paid the VAT, and valid tax invoices reflecting the details of the Donor are available.
• Validating Goods and Services: VAT recovery is limited to goods and services directly related to mosque construction, such as architectural design, engineering consultancy, contractor services, and various materials and equipment.
• Mosque Operation Commencement Certificate: The Competent Authority issues a Mosque Operation Commencement Certificate within 60 days of completion, containing essential information about the Donor, the mosque, and the confirmation of construction completion.
• Verification and Audit Procedures: The FTA or its contracted Verification Body conducts procedures to verify the Donor’s eligibility, including validating input tax payments, scrutinizing supporting documents, and confirming that VAT was incurred directly for mosque construction.
• Refund Process: Upon completion of verification and audit procedures, the FTA either accepts or rejects the refund request. If accepted, the FTA refunds the verified amount of VAT to the Donor.
• Retention Payments: Donors can submit additional refund requests for retention payments related to mosque construction within one year of the retention amount payment. This request requires a valid tax invoice and proof of payment.

Conclusion

Understanding the VAT refund process for mosque construction expenses is crucial for eligible Donors. By adhering to the outlined criteria and submitting the necessary documentation, individuals and construction companies can navigate the process and potentially recover VAT incurred during the construction and operation of mosques.

Summary

Simplified Guide to VAT Refunds for Mosque Construction Expenses This simplified guide outlines the process and criteria for obtaining a Value Added Tax (VAT) refund on expenses incurred during the construction of mosques. Donors, whether individuals or construction companies, can initiate the refund process by submitting a Mosque Construction Refund Request to the Federal Tax Authority (FTA).

The eligibility criteria include incurring VAT, acquiring goods and services exclusively for mosque construction, and obtaining a Mosque Operation Commencement Certificate. The verification process involves confirming VAT payments, validating supporting documents, and ensuring that expenses are directly related to mosque construction.

Upon successful verification, the FTA refunds the eligible amount of VAT to the Donor. Additionally, Donors can submit subsequent refund requests for retention payments within one year of payment, supported by valid documentation. Understanding and adhering to these guidelines is essential for maximizing VAT recovery on mosque construction expenses.

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