VAT & Excise Tax

About VAT

VAT refers to Value Added Tax. It is being introduced in the UAE starting in 2018. Here’s all you need to know about it.

What is VAT?

Value Added Tax (VAT) is a consumption Tax applied on a good as its value is increased each stage of its production or distribution. It is an indirect Tax that is related to a Taxpayer’s consumption and not their income. The VAT is applicable in more than 160 countries.VAT, at the rate of 5%, already  introduced in the UAE and other GCC countries from last past year

What shall be Taxed?

A VAT would be applicable to non-essential consumer goods. Anything apart from basic food and essential commodities would fall in this Taxable bracket. This would include automobiles, electronics, jewelry, restaurant services, and entertainment.

Vat Registration in UAE

What will be exempt from VAT?

The Government of UAE has stated that about items in about 100 categories like food, education, health, bicycle, fuel, transport, and social services would be exempted from VAT.

Who shall be Taxed?

Corporations: Businesses providing goods or services falling in the Taxable category, with annual revenue of over AED 375,000, would be required to register for VAT. It is optional for companies with annual supplies and imports less than AED 375,000 but over AED 187,500. Here, companies providing health or education services may reclaim the VAT from the government.

Consumers: Anyone purchasing a non-essential is liable to pay VAT. Realtors: Any sale or renting of property for commercial purposes would attract VAT.

Free Zones Exempt from VAT

The Federal Tax Authority  FTA on January 10, 2018, announced that 20 free zones would be exempt from VAT. These are being referred to as ‘designated zones’. The areas included are largely fenced free zones with special controls on goods, rather than areas such as Dubai Media City or those dealing in financial services.

Excise Tax in UAE

A Taxable person engaged in activities relating to excise goods such as tobacco products, carbonated drinks, and energy drinks should engage an audit firm registered as a Tax agent to seek professional advice on Excise Tax matters.

Accutax’s role as a Tax agent

Accutax the Tax consultants in Dubai/UAE provide comprehensive planning, advisory & compliance services relating to Excise Tax.

Excise Tax planning and advisory services :

  1. Excise Tax planning.
  2. Excise Tax advisory services.
  3. Excise Tax training and awareness to staff.
  4. Excise Tax registration support services.

Excise Tax compliance services :

  1. Ensure timely submission of Excise Tax returns
  2. Review of Excise Tax records, returns & reconciliation.
  3. Providing clarifications on client’s queries and FTA notifications.
  4. Representing before the FTA for Tax matters.
  5. Review and customization of source documents.

Find Accutax, For your Simplified Exercise and VAT Tax Solutions