- Input Tax Apportionment refers to the recovery of input tax by a taxable person on the purchase of goods and services, subject to certain conditions.
- Input tax can be recovered for goods and services used for taxable supplies, supplies outside the UAE that would have been taxable if made in the UAE, and financial services provided to a person outside the UAE.
- If input tax is used partly for recoverable supplies and partly for non-recoverable supplies, it is called residual input tax and must be apportioned accordingly.
- There are various methods for input tax apportionment, including the standard method, special methods for certain industries, and sectoral methods for large companies.
- Businesses can apply for special methods if the standard method does not provide a fair and reasonable result.
- The Input Tax Apportionment Request Form must be submitted to the FTA with detailed business activities and calculations.
- The FTA may take up to 40 or 80 business days to respond depending on the method selected. Approved methods are valid for 2 or 4 years.
Source nrdoshi.ae
