Page 26 - Premier Brains Global -Doing Business in UAE (Low Res)

DOING BUSINESS in UAE

There are specific provisions in case of group activities and eliminates the need for
import of goods and services. Law provides submitting multiple returns
provision for accounting VAT on import
of goods and services on reverse charge Zero-rated Supplies
mechanism basis. This has the effect of
Following supplies are considered zero-
allowing resident taxpayers to account
rated supplies subject to VAT at 0% provided
for VAT payable on supplies received from
certain conditions are satisfied relating to
non residents in certain cases, whereby
that supply:
reducing the instances of non- resident
• Export of goods and services.
VAT registration in the UAE. If conditions
• International transport of goods and
are fulfilled correctly this allows in certain
passengers, and transport-related
instances VAT not to be paid at time of
services.
import and becomes a mere adjustment in
• Certain means of transport, such as
the VAT returns
trains, sea vessels and aircraft, and
goods and services related to such
Recently certain domestic reverse charge
means of transport.
related provisions are also introduced for
• First supply of residential buildings
gold & diamond and electronic goods
(lease or sale) within 3 years of
when such transactions are between VAT
finalizing their construction.
registered businesses who are transacting
• Airplanes and marine vessels are
for further resale purposes or use as parts
designed for the purpose of rescue or
in manufacturing similar products. There
aid through air or sea.
are specific definitions in the law where it
• Certain precious investment metals.
applies and should be studied before taking
• First supply of buildings specifically
a proper decision.
designed for charitable institutions
(lease or sale).
VAT registrants are entitled to recover the
• Crude oil and natural gas.
input tax incurred on the purchase of goods
• Certain educational services and
and services in the course of business
related goods and services.
provided proper records and tax invoices
• Necessary and preventive healthcare
are retained that determine the value of VAT
services and related goods and
charged by the suppliers.
services.
Tax Group Exempt supplies
Law allows Related businesses / parties that
The following supplies are exempt from the
share economic, financial, and regulatory
scope of VAT:
ties (either in law, shareholding or voting
rights) can be registered as a tax group
• Local transportation
provided, they have an establishment in
• Bare land
UAE, and group members are legal persons
• Residential buildings apart from the
under joint control.
residential buildings regarded as
Transactions between tax group members
zero-rated
are outside the scope for VAT purposes,
• Financial services, most especially
and one group member nominated as
life insurance plans, reinsurance of
the “representative member” submits the
life insurance, and all those that aren’t
consolidated VAT returns covering all
conducted for a discount, explicit fee,
rebate, commission, or any other kind of
compensation or consideration .
26