The UAE government constantly implements frameworks and mechanisms across several different government departments as part of their key initiatives in boosting economic health. Among them is VAT implementation in UAE, which was declared by the Federal Tax Authority. For the public, Value Added Tax implementation meant higher prices for food, entertainment, and other consumer goods and services. For businesses in the country, it meant levying the current VAT rate of five percent on goods and/or services that are taxable.
The UAE government also introduced a decreased VAT rate and exemptions for specific goods and services. As not all products and services are taxable, it is best to consult with regulated tax agents in Dubai regarding VAT implementation in UAE.
Value Added Tax in UAE is tax that’s applicable to all products and/or services; hence why it is also known as a consumption tax. The taxation is indirect as it’s applicable to final consumers who buy or acquire products/services.
Read also: VAT Treatment for Motor Vehicles
The following products and services are considered zero-rated:
There are also other categories of products and service that are considered exempt from VAT in UAE, and they are as follows:
In order for a business to collect Value Added Tax, it has to register with FTA, UAE’s tax authority.
VAT is a relatively new kind of tax introduced; however, the government already made crucial progress when it comes to clarifying those that are required to registered for VAT. VAT registration does not apply to all businesses in the country; however, it is mandatory for businesses that meet certain conditions. Here are some important points to remember about VAT registration in UAE:
Companies in the UAE that are registered for VAT can impose and collect VAT from final consumers. They will then pay VAT to the government. Businesses are to file VAT returns regularly, which enables them in recovering amount of VAT paid. It’s useful to know foreign companies which are registered for VAT may also claim VAT refunds.
If you are considering of opening a business in the country, then opt to register for VAT from the start. Fortunately for you, our regulated tax agents in Dubai can assist you.
There are several requirements which are to be furnished to the FTA for VAT registration, and they include the following:
Even if registration for VAT UAE may be completed without the help of experts, it is extremely crucial to seek their help as they can help increase the likelihood of the business completing the procedure of VAT registration successfully.
Take note: the process can be lengthy and time-consuming, plus it involves the furnishing of complete and accurate details. Should you wish to talk to our regulated tax agents in Dubai, call us today to book a consultation! We would love to hear from you and understand your specific needs and requirements.