Email ID :info@thevatuae.com
Call Us:050 7839 436
0097 150 4753 186
Email ID :info@thevatuae.com
Call Us:050 7839 436
0097 150 4753 186
It’s Like Having all UAE VAT Info in Your Pocket.
VAT Plus - Product Features 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 VAT UAE is based on the same concept as followed by the other countries which use this tax system, however, the standard rate is fixed at 5% for all taxable supplies for VAT 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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Read moreAs the VAT (Value Added Tax) system in the UAE completes its first year, many businesses are engaged in analysing their tax liabilities and especially adjusting their end-of-year input tax dues, if any. Input tax recovery is generally made by partial exempt taxpayers who claim input tax for the supplies which are exempted. Such taxpayers …
The UAE’s Federal Tax Authority (FTA) expounded that income earned through Bank interest and Dividends are outside the scope of VAT in the UAE. These are passively earned interest income sourced from bank deposits/dividends and are not subject to value-added tax (VAT) in the country. So, there is no obligation to report them in the …
The FTA (Federal Tax Authority) has recently confirmed that VAT (Value Added Tax) will not be charged for donations, grants and sponsorships only in cases when they are made for no return benefit. It further added that if any benefit is received in the return of a donation, then VAT will be charged. On the …
The foreign businesses had problems in recovering the VAT (Value Added Tax) in UAE(United Arab Emirates). So to solve this problem, the FTA (Federal Tax Authority) has given some conditions. Conditions to be eligible for the VAT refund The FTA gave four conditions that will help the foreign businesses to allow the recovery of VAT …
The tax experts said that the healthcare services like the cosmetic will now subject to a 5 percent VAT rate. Most of the healthcare services are classified as zero-rated under the UAE VAT law which means that such services are subject to zero percent VAT. But it allows the VAT recovery on associated costs. While …
The VAT UAE Laws provide registered taxpayers (including voluntary registrants) and companies with provisions for VAT deregistration too. An entity can apply for deregistration if the annual turnover did not exceed Dh187,500 ($51,000) 13 months after registering with the FTA. The VAT UAE Deregistration Criteria Under the VAT Decree Law and Executive Regulations, VAT Registered …
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