The UAE has successfully implemented the Value Added Tax (VAT), which is a consumption-based indirect tax system on goods and services, from January 1, 2018. The VAT shall be levied at the standard rate of 5 per cent on selected supplies of businesses whose turnover exceed Dh375,000. The new tax system is expected to affect all the industries and also the common man. Let’s discuss the impacts of VAT on different industries and sectors in UAE.
VAT is applicable at 5% on properties that are used commercially (rent or owned) and on newly constructed (not more than 3 years old) residential properties with rental exceeding Dh3,75,000. Read more
VAT is not charged on the revenue of a company/business, only on the taxable supplies made by the business. However, the annual revenue of a business is used to determine their VAT applicability.Read more
VAT at 5% is applicable on all food items, including bread, coffee, rice, milk, etc.Read more
VAT at 5% is applicable on auto-maintenance and repair services as well. It shall also be levied on the sale and trading of used auto parts.Read more
Most of the basic healthcare and pharmacy services, including medical, dental, vaccinations and other treatments provided by licensed authorities are kept zero-rated under VAT. 5% VAT is applicable on cosmetic healthcare supplies. click here for detailsRead more
Education supplies and services provided by ‘qualifying educational institutions’ in UAE are zero-rated under VAT. Most other education services, including school uniforms, food, field trips, etc., are taxable at the standard rate of 5%. There is no VAT on school tuition fees, however there is a 5% tax on the fees of private universities.Read more
5% VAT is applicable on all imports made by a UAE business from any foreign country. However, the exports made from UAE to other countries, including GCC countries, are zero-rated under VAT.Read more
There is a 5% VAT on money transfer and remittance charges (fees) levied by banks and financial institutions. The tax shall be paid by the person making the transfer.
There is no VAT on ATM transactions.Read more
VAT is a consumption based tax, it is not applicable on salary, incomes and revenues.Read more
The 20 designated zones in the UAE have been exempt from VAT, but there will be a zero-rate tax on the supply of certain medical equipment and medications in these regions.Read more
VAT is applicable at zero percent on the international transport (from GCC to GCC or GCC to other countries) of passengers and goods, however VAT at 5% will be levied on all domestic (within the country) transports. Local passenger transports have been exempt from tax. Public transports, including train, bus, metro, tram and flights, are also VAT-free.
VAT shall be levied on the shopping of travel packages online.Read more
The value-added tax is applicable on all kinds of brokerage services that are performed in the UAE, irrespective of the location of the involved parties.Read more
All sales and purchases of taxable goods and services performed through an online website such as eBay or Namshi are liable to the standard VAT of 5%.Read more
The prices of petrol are increased since VAT is being levied at 5% rate on petrol and gasoline. However, there is no tax (zero-rated) on crude oil and natural gas.Read more
VAT at the standard rate of 5% will be levied on the purchases of gold jewellery and coins, but not on the making cost. There is no tax on gold, silver and platinum jewellery (investments) with more than 99 percent purity.Read more
The 5% tax will be levied on all types of mobile communications, including mobile bills, prepaid recharge cards, online recharges, postpaid bills, etc. VAT is also applicable on most others telecom products and services.Read more
The tax rate on shopping of products will depend on their tax eligibility. VAT at 5% will be levied on the purchase of tech products and services. The purchase of spa, saloon and other beauty services and products is also covered under VAT.Read more
Going to cinema will also cost you more since there is a 5% VAT on entertainment services.
The tax will also be levied on the cost of other entertainment services such as theme parks and related venues.Read more
VAT is applicable at the standard rate of 5% on all business contracts.Read more