9 September 2026 · Definition
What VAT Bad Debt Relief Means
VAT bad debt relief lets a UAE supplier recover the VAT it already paid to the FTA on a sale the customer never paid for. Without it, you would be out of pocket for VAT on income you never received. Under Article 64, once the debt is written off, six months have passed and the customer is notified, you reclaim the VAT through your VAT return. It is a cash-flow protection built into the VAT system.
Exiloz Management & Tax Consultant · Dubai-based FTA-focused advisory · VAT, corporate tax & accounting
Do not pay VAT on nothing
It corrects an unfair outcome.
- You paid output VAT on the sale.
- The customer never paid you.
- Relief returns that VAT to you.
- Claimed through the VAT return.
Where it comes from
It is a statutory relief.
- Article 64 of the VAT law.
- Clarified by FTA Public Clarification VATP024.
- Conditions must all be met.
- Symmetrical with the customer's input tax.
Related guides
Frequently Asked Questions
For understanding the relief.
Is bad debt relief automatic?
No. You must meet all four conditions and claim it through your VAT return.
What VAT do I get back?
The output VAT you already paid to the FTA on the unpaid invoice.
Where is it in the law?
Article 64 of the VAT law, clarified in VATP024.
Can Exiloz explain it for our case?
Yes. We assess your unpaid invoices for relief.
Understand your relief
Exiloz tells you which unpaid invoices qualify for VAT bad debt relief.