Page 25 - Premier Brains Global -Doing Business in UAE (Low Res)

DOING BUSINESS in UAE

following the end of the reporting period
Value Added Tax (VAT) and the payment must also be made by this
date.

Value Added Tax (or VAT) came into force Rates
in the UAE on 1st January 2018 based on the
VAT is applicable on taxable supplies of
common VAT agreement of the of the GCC
goods and services in the UAE, and imports
member states is an indirect tax, charged
of goods into the UAE from outside of the
on most supplies of goods and services
GCC (and from GCC member states for an
VAT. It is administered in UAE by Federal Tax
interim period), with limited exceptions.
Authority (“FTA”)
Certain supplies may qualify for either zero-
VAT registration and returns rating or exemption. Zero rated supplies have
Businesses that are required to register a VAT rate of 0% and are treated as taxable
for VAT will depend on the Registration supplies in all other respects, including the
Threshold as mentioned below: right to recover VAT incurred on expenditure.
Exempt supplies do not require VAT to be
• Taxable persons making supplies of over accounted for, however, VAT incurred on
AED 375,000 in a previous 12-month period expenditure is restricted.
or within the next 30 days are required to
mandatorily register for VAT and can register In practice exceptions to the standard rate
voluntarily if the supplies are between AED of VAT are reviewed more closely by the FTA.
187,500 and AED 375,000 for the same period Proper care should be taken when a certain
mentioned above. supply is considered as zero rated or exempt,
with the relevant evidence to support the
• Non-resident suppliers making taxable position taken.
supplies in UAE are required to register for
VAT in the cases where no one is accountable Standard rate of Vat is 5%
for the due tax on the supplies made in UAE.
Overall there are 3 types of Supplies in VAT
Once registered for VAT, A taxable person
and all its branches shall be treated as the • Standard rated supplies – VAT at 5%:
same person for the purposes of tax liability All input Vat paid incurred on making
and shall receive only one Tax Registration taxable supplies can be claimed (subject to
Number (TRN). Also, taxpayers will be exceptions given in the law) while filing the
required to calculate the net VAT due and return
declare this on a VAT return. VAT returns are
generally required on a monthly or quarterly • Zero-rated supplies – VAT at 0%
basis depending on turnover, but the FTA All input Vat paid incurred on making
may specify a longer or shorter period if it taxable supplies can be claimed (subject to
considers that to be appropriate. exceptions given in the law) while filing the
return
VAT Returns must be filed online via the
FTA’s e-Services portal by the 28th day (or • Exempt supplies
next working day if the 28th day falls on a NO VAT to be charged nor raising a tax
weekend or national holiday) of the month invoice. No input VAT on supplies can be
claimed.

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