UAE remained a tax haven for decades. But the situation is going to change now as UAE and other GCC countries will soon introduce value added tax (VAT). This tax will be implemented from 1st January 2018 in UAE while mandatory registration has started from 1st October 2017. All the concerned businesses have to complete the registration process by 31st October 2017. Voluntary registration process is also open for businesses less than the minimal annual revenue. VAT will be applied on all goods and services, except the basic necessities, with flat rate of 5%.
Who will Pay VAT in Dubai
- Companies and corporations with annual revenue of equal to or more than AED 375,000
- 5% VAT will be applicable on all the non-essential commodities and consumers purchasing these commodities will pay VAT. VAT will be applied separately from excise tax that is already in effect on tobacco, energy drinks and soft drinks
- All the commercial tenants will pay tax. This include shops, offices etc
- Sales of commercial properties are subjected to standard VAT rate
- VAT will be applied to goods imported to Dubai. In case of products for re-export, VAT will only be applied once in the final destination of goods
Who will be Exempted from VAT
- Purchase of all the essential products including food products, medicines, educational commodities etc. is exempted from VAT
- VAT will not be applied on businesses that provide essential services like education, health etc
- There will be no VAT on residential tenant contract
- Selling of newly constructed homes is also exempted from tax
How we can Assist You
Riz & Mona Consultancy has an experienced taxation team that can assist you on all the aspects of VAT in Dubai and in other emirates of UAE. The new VAT system has changed the whole scenario of business. VAT is different from GST as it is applied on whole supply chain of business that affects the overall product price, its cost and procurement. It demands the overhauling of the current financial, accounting and IT structure of any business.
In this case, a perfect consultancy firm with solid background can help you get through all these emerging problems. You can fully trust Riz & Mona Consultancy for overcome all the issues related to VAT in Dubai. We can provide services including:
- Profit planning
- Calculating VAT on supplies & purchases
- Providing accounting software for VAT calculations
- Calculating VAT on import & exports
- Registration of your business with the Dubai tax authorities
- Consultation regarding VAT on real estate & financial services