United Arab Emirates VAT

United Arab Emirates VAT

The United Arab Emirates published its Value Added Tax legal statement law on 27th August 2017, paving the way for the introduction of the indirect tax on 1st January 2018. The standard VAT rate will be 5%, with a nil rate or certain goods

The described Executive Regulation, providing guidance on VAT following the law processes, will be given at a later date.


The important things of the new law cover

  • 5% on taxable supplies and imports
  • VAT registration needed thing (Dh 375,000) and calculations, including voluntary registration option (if revenue above Dh 187,500)
  • Setting up VAT groups
  • Figuring out the date of supply for VAT purposes
  • Place of supply of products and services rules
  • VAT nil-rating on the supply of products and services within other GCC states which have put into use VAT
  • Exemptions on supply of service rules i.e. taxable where supplied
  • Role and hit of tax agents
  • Deciding the value of taxable supplies, discounts and imports
  • Mixed supply rules
  • Supplies subject to zero rating:
    • Exports
    • International passenger transport
    • Import of precious metals
    • First supply (within 3 yrs of construction) residential properties
    • Crude oil and natural gas
    • Publicaly provided education
  • Exempt supplies
    • Financial services, including insurance
    • Supply of residential building (subject to zero rating clauses)
    • Land
    • Passenger transport
  • Reverse charge rules, including imports and movements from other GCC VAT implementing rules – more details to be provided in Executive Regulation
  • The right to recover input VAT, including import VAT incurred on goods subsequently moved to UAE (onward supply relief)
  • Credit notes and bad debts
  • VAT invoice requirements, FX treatment and requirements for date of issuance
  • Tax credits, carry forwards and when refunds may be made
  • VAT recovery for non-resident businesses and consumers
  • Penalties
  • Record keeping requirements, including:
    • Invoices, credit notes etc
    • Import and export records
    • Minimum period for retaining records will be contained with the Executive Regulation
  • Transitional rules for the launch of VAT
5%StandardOn taxable supplies and imports
0%ZeroExports; International passenger transport; Import of precious metals;First supply  (within 3 yrs of construction) residential properties; Crude oil and natural gas; Publicly provided education

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