After the declaration of VAT in UAE, everybody is in a big question that what kind of products will be affected by the value-added tax, here is the answer to every question about VAT
The UAE will implement five percent value-added tax (VAT) from 7am on January 1, 2018, with a few goods and services zero-rated and exempted as part of the GCC-wide agreement.
Being an indirect tax on consumers, VAT will be applicable on most daily usage goods and services that residents consume, helping the government to boost its coffers to further improve infrastructure and offer better facilities.
Categorised in three segments – five per cent standard rate, exempt and zero-rated – VAT is one of the most common types of consumption taxes in the world as it’s levied in more than 150 countries.
In the UAE, the Federal Tax Authority has asked all entities and individuals crossing the threshold of Dh375,000 to register and get approval before January 1, 2018, to ensure that they don’t face any penalties.
As per the regulations, the sectors that will be subject to five per cent VAT include food and beverages, utility bills, private transport services, hotel services, entertainment, electronics, school uniforms, commercial rents, cars and jewellery, among others.
The categories that have been exempted include healthcare services, medicines, tuition fee, local transport, residential rents, surgery and certain government services.
VAT is normally charged at each step of the supply chain and it ultimately ends at the consumer who pays the tax. However, producers charge it from suppliers and suppliers shift the cost to the consumer. In the case of zero-rated services, the companies can claim refunds from the
Post Your Comments