The value-added tax (VAT), which came into effect from January 1, 2018, in UAE, is a consumption based tax which will be applicable at each stage of the ‘supply chain’. That means, any UAE business making a taxable supply of goods and services will have to pay VAT on that supply. The UAE VAT is based on the same concept as followed by the other countries which use this tax system, however, the standard rate of VAT is fixed at 5% for all taxable supplies in UAE.
As per the VAT rules and regulations, some basic services (and goods) like food, public transport, and some healthcare services are exempt from the VAT, while some other services will be taxed at zero percent. You can find out more about VAT-exempt and non-exempt supplies on our blog. The VAT shall be levied at each stage of the supply chain, but there is a concept of input credit through which businesses can claim their taxes back from the government, and the ultimate VAT cost is borne by the end consumers.
VAT has been implemented in UAE with the aim to reduce the country’s dependency on oil resources for revenue. It will create a new and stable source of income for the government, which will be utilized to provide better and more advanced public services. So, the ultimate benefit of VAT is to the general public.
The standard VAT rate in UAE is 5%, that means most of the taxable supplies will be taxed at 5%. However, some services are zero-rated under VAT while some others are kept free of tax. Click to review full VAT rate list
The VAT will be paid by a business (with annual turnover above Dh375,000) in UAE on any of their taxable supplies of goods and services. The tax is applicable at each stage of the supply chain. The VAT cost is ultimately borne by the end consumer when they pay the actual price (base price + VAT) at the time of purchasing a taxable product/service.
VAT was officially launched on January 1, 2018 in UAE and has been implemented on all eligible supplies across the country. The registrations for VAT started in 2017.
A farmer grows cotton which is plucked and sold to a factory
The factory processes the cotton and manufactures clothes which are sold to a retail chain
The clothes are stocked in stores and placed for sale to consumers.
A consumer buys a new dress.
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A complete overview of VAT registration process for the normal user and business, including details like e-services account, step-by-step process of VAT registration, application, and more.Read more
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A complete user guide that explains the process of tax group registration, de-registration and amendments, along with the procedure of checking the status of the application.Read more
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A guide detailing the process of registering a warehouse keeper and/or a designated zone for VAT, completing the application form, and other related information.Read more
A complete guide explaining the procedure of registering and de-registering a warehouse keeper and/or a designated zone for VAT, and making amendments (if possible) in registration.Read more
It contains the summary of the VAT registration, de-registration and amendment procedures for a warehouse keeper and designated zones in UAERead more
A guide for VAT registered and non-registered importers that mentions the various VAT scenarios and required actions, along with the overview of the sign-up process and useful tips.Read more
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The Federal Tax Authority(FTA) has launched over 50 guides and E-learning modules for VAT regulations covering their implementation phase. The director-general of FTA, Khalid Ali Al Bustani said The authorities issued the guides and e-learning as it covers modules like Registration for excise tax, value-added tax(VAT) and TAX group, import and export announcement, TAX return, …
The UAE Ministry of Finance, the UAE Federal, and Emirate governments provide many different public services, citizens, and residents.The commercial real estate is charged at standard rate of 5%. We are expecting that businesses will be able to recover the VAT paid their VAT returns and the Government of UAE already provide online VAT Registrations …
The GCC framework is ready to make three VAT rates that are expected to levy by the member states. In all three VAT rates, two are about taxable supplies made in particular time and the second is a tax-exempt supply. The three VAT rates are: Standard Rate Zero Rate Tax Exempt Standard Rate: The standard …
As per the normal VAT standard, the returns are filed quarterly, i.e., once in 3 months, or annually in some cases. The VAT returns will be filed online on the official portal of the Federal tax authority. Businesses that are looking forward to making a smooth transition to the new tax system must get familiar …
Tax Invoice is a written or electronic archive in which the taxable person collects complete information of taxable supplies made in a financial year. The Federal Law Number (8) of 2017 regarding the Value Added Tax (the VAT Law) establishes the necessary elements required for a Tax Invoice and the Executive Regulation Number 52 of …
The items or supplies to be levied by Value Added Tax (VAT) from 1st January 2018 has been announced by the Federal Tax Authority (FTA). The authority has announced the VAT rates of several items or sectors. Sectors such as healthcare, oil, and gas, transportation, real- estate will be levied with the zero-rated tax under …
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