GCC countries has decided to implement Value Added Tax in the entire region through a treaty signed by all member countries. UAE has already implemented the VAT laws and regulations with effect from January 1, 2018, along with Kingdom of Saudi Arabia.
The introduction of Value Added Tax (VAT) in UAE, a traditionally TAX-free jurisdiction, brings with it a lot of opportunities and an equal amount of challenges. Our team of thriving VAT specialists are well equipped to help your business overcome expected roadblocks such as
Lack of familiarity with VAT rules & regulations
Structure and Compliance issues
Lack of resources (Availability of experts and competent staff)
Lack of a robust book keeping system
If your annual turnover exceeds the mandatory threshold limit of AED 375,000, then you are liable to pay tax.
Optional registration threshold limit is AED 187,500/- per year, where, any business person can voluntarily register for VAT and continue with the normal compliance process.
Rates of VAT:
The types of rates applicable are:
The businesses registered under UAE VAT will be levied 5% tax.
Exports of goods and services outside the UAE
International transportation, and related supplies
Supplies of certain sea, air and land means of transportation (such as aircrafts and ships)
Certain investment grade precious metals (e.g. gold, silver, of 99% purity)
Newly constructed residential properties, that are supplied for the first time within 3 years of their construction
Supply of certain education services
Supply of certain Healthcare services
Areas exempted from VAT
Supply of certain financial services
Residential properties – sale and lease
Bare land – sale and lease
Local passenger transport
Out of scope transactions for VAT:
These are mostly high sea sales kind of transactions wherein a UAE distributor ships goods from one country to another directly, which doesn’t involve any direct involvement with UAE. Such type of transactions are out of scope for VAT and need not follow the registration and compliances.
ZS Charterted Accountants offers services for VAT on:
Building and sharing knowledge on VAT
Helping in bringing the VAT expertise in the industry
Assessing current capability of the business to manage VAT
IT re-configuring in line with the laws and regulations of VAT