FTA has issued a very important clarification on the time-frame for the recovery of Input Tax (VATP017). The clarification recalls the conditions for the Input Tax to be recovered and notably the one related to the intention to make the payment for the supply that should not exceed six months after the agreed date of payment. FTA considers that these conditions “will only be met when the taxable person completes the internal approval process and forms an intention to make the payment within the prescribed period”. This is very welcome-clarification which is in line with the business practice and which will hopefully end the debate on the “two-tax periods” for the recovery of the Input VAT.
Source Tax authorities
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