VAT was introduced with effect from 1 January 2018 in the UAE. As a general consumption tax on the supply of goods and services, it applies to supplies made within the territorial area of the UAE.
It is common in the UAE for persons to build and operate Mosques. These activities generally do not constitute the carrying on of a business and input tax may not be recovered under the normal VAT recovery rules.
The FTA may return VAT paid on any supply or import incurred by a person, or class of persons, listed in a Cabinet Decision. Cabinet Decision No. 82 of 2022 on the Refund of Input Tax Incurred on the Construction and Operation of Mosques was issued on 16 August 2022, and provides for a special refund mechanism for eligible persons constructing and/or operating a Mosque, provided certain conditions are met. For purposes of this Decision, the term “Mosque” is defined as the space allocated for prayers and also includes the Mosque’s yard, entrances, annexures, and facilities.
This document contains guidance about the requirement...