Introduction of Value Added Tax (VAT) in the UAE

The UAE is introducing VAT from 1 January 2018 onwards, and we're here to make sure you understand exactly what that means.

What is VAT?
Value-added tax is a consumption tax imposed on a product at each stage of production, before the final sale.

Prepare soon: are you compliant? 
Any business that is required to be VAT registered and charge VAT from 1 January 2018 must register for VAT purposes, in the manner specified by the Federal Tax Authority, prior to that date

Normal requirements under VAT system the companies have to comply:

  • Registering for VAT: Businesses which provide taxable goods or services with annual revenue of more than Dh375,000 will be required to register for VAT. Businesses with tax­able supplies below Dh375,000 but over Dh187,500 will have the option to register for it.
  • Calculating and reporting VAT: A VAT registered business is required to charge and remit VAT collected to the Tax Authority on a periodic and regular basis.
  • Issuing Invoices: The process of charging VAT on supplies of goods and services requires businesses to issue VAT invoices.
  • VAT Returns: Filing the VAT returns to the Government authorities by providing the relevant information requested by them, within the stipulated period.
  • Payments of Tax to Tax Authority: A VAT registered should ensure that they make the payment of tax computed and due within stipulated date to Government.
  • Bookkeeping: Maintain proper stock, invoices, accounts, VAT returns, and other relevant records to justify the tax paid at the time of purchase.

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