The United Arab Emirates and Saudi Arabia are both on the verge of introducing Value added tax (VAT) very soon and to be accurate, on 1st January 2018. The decided VAT rate is 5 percent which is the lowest tax rate in the world. Although it seems much similar from a particular point of view, still it has some differences between them according to the plan of roll out.
Gulf Cooperation Council had earlier discussed the implementation of the VAT and all the six member countries agreed but only Saudi Arabia and UAE have gone far enough to say that they will be implementing it in coming January 2018. Along with this, they have also rolled out particular VAT laws which might take lead in the future prospects of implementation for other countries, who are debating for VAT implementation a little delayed most probably in late 2018. Read More
According to the ‘The ICAEW Economic Insight’ report by Oxford Economics, the UAE economy is benefiting the most from the growth in global tourism and rebound in global trade flows of all the GCC countries. The report says that the UAE is the most diversified economy among all GCC countries and has better economic outlook. The country’s economic system is much bigger than the fuel, which only contributes 22 percent to the total export revenue of the UAE.
In the past year, UAE’s economy has witnessed a bigger contribution from the non-oil industries, which is likely to result in up to 1.7 percent growth in the country’s GDP in 2017. The GDP rate is expected to grow further as much as 3.3 percent in 2018. Read More
All the GCC countries have collectively signed on the VAT framework agreement to implement a simpler and more unified Value Added Tax (VAT) in the Gulf region. The new tax system is expected to have a positive impact on the economic system to change the fiscal reform process. Even several foreign businesses and investors are also looking at the region with great future opportunities, interest, and promise. VAT rate will be fixed at 5% for most of the goods and services with the exception of those products/services that are tax-free.
Since essential basic items like food, education, health, etc, are likely to be VAT-exempted, it may have a positive impact on consumer spending. The low tax rate is also expected to have positive effects on the inflation. Under VAT, businesses will be responsible for collecting tax on behalf of the government, and the tax will be ultimately paid by the end consumer. Read More
Ever since the news of VAT (value added tax) being implemented in the UAE has surfaced, GCC businesses have been trying to prepare themselves for the new tax regime. The UAE Finance Minister had earlier this year stated that VAT will be applied at the rate of 5% in the UAE from January 1, 2018. The major effect of the change will be faced by the business sector where businesses will have to get aware of the new tax methods if they want to continue to make the profit.
According to a series of surveys conducted by accounting firm Deloitte for the businesses and executives in the Gulf region, more than 60 percent of GCC companies are getting more familiar with the rules and methods of VAT as the scheduled date of implementation is approaching. Deloitte has been conducting regular surveys of the Gulf businesses ever since the first news of the next VAT based system was revealed. As compared to the initial survey results, the latest ones show a drastic improvement in the views of businesses towards VAT. They are becoming more aware and informed of the rules and impacts of the indirect tax system. Read More
VAT (Value Added Tax), a tax regime, which is believed to completely transform the way of business transactions used by trading companies across the GCC, either it is an SME/ SMB or a large enterprise. The upcoming tax regime in UAE depends on IT solutions like e-invoice suite and e-archive suite, which makes sure the smooth transactions under the new tax landscape and also guarantees on-going VAT compliance. Read More
The Federal National Council (FNC) of UAE, on Tuesday, affirmed changes to a draft law that is required for issuing tax-related laws and for the smoother implementation of the upcoming VAT taxation system in the country. The Tax Procedure Bill is aimed at evaluating, collecting and controlling public revenue it applies to, in addition to setting out the rights and commitments of taxpayers, enrollment of taxpayers, and tax offenses and infringement. This draft law will also apply to fines, interest on the basis of due but unpaid tax and the expenses of the enforced collection. Read More