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Value Added Tax (VAT) is one of the most common types of indirect tax applied in most of the countries. United Arab Emirates and Saudi Arabia have already implemented VAT effective 1st January 2018 and other GCC countries are expected implement it in near future.

The value added tax rates are 5% (standard rated) and 0% (Zero rated) at the moment. VAT will provide the UAE with a new source of income which will be continued to be utilised to provide high-quality public services. It will also help government move towards its vision of reducing dependence on oil and other hydrocarbons as a source of revenue.

Impact of VAT in general

VAT will apply to the majority of transactions in goods and services with an exemption for limited transactions.

Due to introduction of VAT the cost of living is likely to increase slightly, but this will vary depending on an individual’s lifestyle and spending behavior. If an individual spends mainly on those things which are relieved from VAT, he is unlikely to see any significant increase.

Impact of VAT on businesses

All businesses shall carefully record their business income, costs, assets, liabilities and associated VAT charges irrespective of the size of the operations.

Registered businesses and traders will charge VAT at the prevailing rate on all of their sale of goods and services (output tax) and incur VAT on goods/services that they buy from suppliers (input tax). The difference between these sums is considered as refundable tax or VAT payable to the government.

VAT-registered businesses must report the amount of VAT they have charged and the amount of VAT they have paid to the government on a regular basis through filing of VAT returns monthly, quarterly, annually or for any other period that has been confirmed by the Federal Tax Authority (FTA) in VAT registration certificate of the business.

VAT SERVICES includes:

  1. Registration for TRN with Federal Tax Authority (FTA)
  2. Implementation of VAT in the organization
  3. Review of accounting transactions to be compliant with VAT
  4. Filing of monthly/ quarterly and yearly VAT returns
  5. Applying for VAT refund return forms
  6. Filing of voluntary disclosure forms
  7. Awareness session to a team of people

Explore more about VAT:

  1. Registration for TRN with Federal Tax Authority (FTA)
  2. How to register for VAT?
  3. On which businesses does VAT apply?
  4. Filing a tax return for VAT
  5. How to file VAT return?
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