Introduction of VAT in the UAE
The United Arab Emirates will implement Value-added Tax (VAT) on 1st January 2018. VAT will be introduced at a rate of 5% on goods and services with some limited exceptions including basic food items, healthcare, and education. Federal Decree Law No. 8/2017 and the cabinet and executive decisions offer guidelines on the law governing VAT implementation in the UAE.
VAT Registration is compulsory for companies and individuals doing businesses in the UAE, having an annual turnover of more than AED 375,000/-. All companies/individuals coming under the above threshold limit (subject to the provisions of the VAT law) have to register for VAT on or before 31st December 2017.
Value Added Tax (VAT) is an indirect tax added to goods and services provided by companies and individuals within the UAE. Registered companies and individuals will have to submit a return to the FTA (Federal Tax Authority) monthly or quarterly and pay the tax collected. VAT in the UAE is very similar to VAT implemented in European and other countries around the world.
VAT will be paid only by the final consumer as registered companies will be able to claim back any VAT paid.
Some goods and services such as transport, school fees, and finance commissions and interest are zero-rated or exempt. We are able to provide you with a full list upon request.
As well Freezone companies above the stated threshold will have to register for VAT. Companies that make supplies to foreign companies only, may apply for an exemption.
Documents & information required for VAT Registration:
Before applying for VAT Registration, the lists of documents are required to be on file at all times. The soft copies of the documents should also be uploaded along with the application.
• Documents identifying the authorized signatory e.g. passport copy, Emirates ID
• Trade license copy of the company
• Other official documents authorizing the entity/individual to conduct activities within the UAE e.g. certificate of incorporation, articles of association, power of attorney etc.
• Description of business activities
• Turnover for the last 12 months in AED
• Supporting document for 12-month sales
• Expected turnover in next 30 days
• Estimated value of imports for one year from each GCC countries
• Estimated value of exports for one year to each GCC countries
• Whether you expect to deal with GCC suppliers or customers
• Supporting documents for customs registration in each emirate if applicable.
• Bank account details
There is also a voluntary registration option for companies that want to be VAT registered. Companies with a turnover of 187,000AED or more may register for VAT as well.
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Bybloserve Dubai is undertaking any assignments from small to large organizations who wish to receive consultation or use our VAT support packages. We are able to offer full tax agent services, bookkeeping, accountancy and VAT submissions.