The time for implementation of Value Added Tax (VAT) is approaching in UAE and now the ruler of Dubai (who is also PM and vice president of UAE), Sheikh Mohammad bin Rashid Al Maktoum, has signed Executive Regulation on VAT.
According to this regulation, 5% VAT will be imposed from 1st of January 2017 on the import and supply of goods and services. This tax will be applied on all the stages of production and distribution of taxable goods. The decree also describes specific services that are exempted from VAT. All the businesses have to take necessary steps to register before January 01, 2018 in order to avoid penalties for violation of tax laws in UAE.
UAE Ministry of Finance commented on the occasion that this ratification by the ruler of Dubai and UAE’s PM and vice president has started a new era in the history of UAE that has introduced a new and efficient taxation system according to international standards.
According to the decree, several goods and services are zero-rated from VAT including: new & converted residential buildings, education, healthcare, buildings for charity, telecommunications, investment grade precious metals and international transport of goods or passengers.
The executive regulation has also described the products and services exempted from the tax. These include: supply of residential buildings by sale or lease, supply of local passenger transport, supply of bare land and the supply of specific financial services.
There are total 17 titles in this latest VAT executive regulation and all describe various aspects of VAT. Mandatory and voluntary registration for VAT is underway in UAE and the concerned individuals and companies have to complete the procedure before the start of imposition of VAT on 1st January 2018. The recent executive order has made it clear that the tax will be implemented in Dubai and other parts of UAE from 1st of January 2018.
The time for VAT in UAE is approaching and now it is important than ever for every resident in UAE to know about his/her duties regarding VAT (value added tax). If you are willing to know details about VAT in UAE and about its impact on your life and business then you can contact Riz & Mona for this purpose. You can talk to us via WhatsApp # 971-56-9971225.