VAT Recovery & Dispute Resolution

▌ VAT RECOVERY

Recovery work focuses on identifying and reclaiming input VAT correctly and completely:

• Eligibility assessment reviewing which input VAT is recoverable and which is blocked under the Executive Regulations, such as entertainment costs and certain motor vehicle expenses
• Partial exemption and apportionment calculating recoverable input tax correctly for businesses making both taxable and exempt supplies
• Excess input tax refunds preparing and submitting refund applications (Form VAT311) where input tax exceeds output tax
• Bad debt relief recovering VAT already paid to the FTA on invoices that remain unpaid by the customer for over six months
• Zero-rated and export recovery ensuring exporters and zero-rated suppliers recover input VAT without unnecessary delay
• Refund query management responding to FTA requests for supporting documents during refund verification

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▌ FTA REVIEW & VOLUNTARY DISCLOSURE

• Voluntary disclosure (Form VAT211) businesses can proactively correct errors identified in a previously filed return or refund claim, which generally reduces penalty exposure compared to the FTA identifying the error first
• Administrative penalties incorrect returns, late filing, late payment, and other non-compliance can trigger FTA-imposed penalties in addition to the underlying tax due

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▌ THE FTA DISPUTE RESOLUTION PATH

When a business disagrees with an FTA decision an assessment, a rejected refund, or a penalty there is a defined escalation route:

• Reconsideration request the taxpayer may ask the FTA to reconsider its decision within 40 business days of being notified; the FTA must respond within 40 business days
• Tax Dispute Resolution Committee (TDRC) if the reconsideration outcome is unsatisfactory, the case can be escalated to the TDRC within 40 business days; for disputes above the prescribed threshold, the disputed tax and penalty generally must be settled or secured by a bank guarantee before the TDRC will hear the case
• Federal Courts where the disputed amount exceeds the prescribed threshold and the TDRC decision remains unsatisfactory, the matter can be escalated to the competent court within 40 business days of the TDRC's decision

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▌ COMMON GROUNDS FOR DISPUTES

• Rejected or delayed VAT refund claims
• Disallowed input VAT recovery following an FTA review
• Penalties for late registration, late filing, or late payment
• Assessments arising from an FTA review of a VAT return or refund claim
• Disagreements over classification standard-rated, zero-rated, or exempt

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▌ BENEFITS OF PROFESSIONAL SUPPORT

• Maximizes legitimate VAT recovery instead of leaving it unclaimed
• Reduces the risk of rejected claims due to documentation gaps
• Keeps every filing, reconsideration, and appeal within FTA deadlines
• Lowers penalty exposure through timely voluntary disclosure where appropriate
• Structured representation before the FTA and the TDRC

Why It Matters

VAT that is legitimately recoverable but never claimed is a direct, avoidable cost and a dispute left unmanaged can turn a disagreement into a missed deadline and a lost right of appeal. Getting recovery and dispute timelines right protects both cash flow and the business's standing with the FTA.