UAE Government Announced VAT Rates 2018

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 VAT Reform.

Supplies such as transportation, real estate, and financial services will be exempted from Value Added Tax (VAT). However, government services will be kept outside of the new taxation system. These comprise services that are exclusively performed by the government authorities or performed by non-profit organizations, and no- competition with the private sector.

It is anticipated that the UAE Cabinet will issue a decision to determine the government bodies and non-profit organizations.

Source – khaleejtimes

The UAE and Saudi Arabia are the two GCC member countries which will implement Value Added Tax (VAT) Reform from 1st January 2018 whereas the remaining member countries will implement over the coming years.

According to the UAE tax officials, it is anticipated that the new tax reform will help to generate nearly Dh12 billion (around 0.8 percent of GDP) revenue in the initial year after the introduction of the VAT. It might increase to Dh20 billion (around 1.2 percent of GDP) in the succeeding year (2019).

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