Claim Input VAT on Reverse Charge Supplies in VAT Form 201

Tally Solutions | Updated on: March 14, 2022

The input tax recovery on reverse charge supplies should be reported in the box no. 10 of VAT form 201 during Tax Return as shown below:

As shown above, the box no. 10 of the VAT form 201 allows you to recover any VAT you have paid as output tax under the reverse charge mechanism declared in boxes 3, 6 and 7 of this form. To know more about box no. 3, 6, and 7, please read ‘Reverse Charge supplies in VAT Return Form 201’ and Goods Imported into UAE in VAT Return Form 201’.

If you are entitled to recover some or all of the VAT declared under the reverse charge supplies (box 3, 6 and 7), you should include the net value of the expenses you are eligible to recover and the VAT applicable on those expenses. Any amount of the VAT incurred on reverse charge expenses which are not recoverable, should not be reported in these boxes.

For example, lets assume that you have previously declared supplies of 100,000 AED and 5,000 AED output VAT under the reverse charge supplies in box no. 3 of the VAT Form 201. If you are entitled to recover all of the VAT incurred under the reverse charge mechanism, you should declare the 100,000 AED in ‘Amount (AED)’ column and 5,000 AED in ‘Recoverable VAT’ column of box no. 10.

In case, you are entitled to recover only a portion (let’s say 50%) of the VAT incurred under the reverse charge mechanism, then in box no. 10, you should declare 100,000 AED in the ‘Amount (AED)’ column and 2,500 AED in the ‘Recoverable VAT’ column. In case, you are not eligible to recover complete (100%) Input VAT on reverse charge supplies, you need to mention the full value of the supply i.e. 100,000 AED in ‘Amount (AED)’ column and not mention any value in ‘Recoverable VAT’.

The following are the types of supplies that need to be reported in box no. 10 of the VAT Form 201:

Services received from foreign suppliers are subject to the standard rate of VAT and for which you are eligible to recover Input VAT. These should have also been reported in box no. 3 of VAT form 201
Goods received are subject to the reverse charge provisions and have not been declared to UAE customs and for which you are eligible to recover input VAT. Remember, these should have also been reported in box no. 3
Local supplies are subject to the reverse charge provisions like specific supplies within the oil and gas industry and for which you are eligible to recover any VAT. These should have already been reported in box no. 3
Imports of goods into the UAE through UAE customs that have already been reported in your customs declarations and for which you are eligible to recover any VAT. These should have also been reported in box no. 6 and/or box no. 7
Imports of goods from agents on behalf of an unregistered person. These should have also been reported in box no. 6 and/or box no. 7

Key points for claiming input VAT on reverse charge supplies in VAT Form 201

Ensure that the reverse charge supplies on which you are claiming input VAT are already reported in box no. 3, 6 and 7 of VAT Form 201
Ensure that you mention the value of the input in ‘Recoverable VAT’ to the extent you are eligible to claim
In case you are not allowed to recover all of the VAT incurred on the supply, ensure that the value of supplies is mentioned in the ‘Amount (AED)’ column