Posted on Nov 20, 2017
Dubai is going to introduce VAT as it is much awaited law which was issued by the president His Highness ShaikhKhalifa Bin Zayed Al Nahyan from 1st January 2018.
According to The Federal Decree-Law No 8 of 2017 for value-added tax, as UAE government kept it as 5% and this is one of the lowest rates of VAT all over the world. This tax rate is fixed as there is only one tax rate on the import, export and supply of goods and services which is going to taxed at every stage of supply chain (production and distribution, including deemed supply).
It is anticipated that new tax laws will give positive impact on the revenue of the government for the national economy howeverVAT, which is all set to be implemented across all GCC countries over the next two years is taken as a strong and smart step of the government as the revenue generated from the VAT will be used for the welfare of the society as it will be redistributed to development projects that benefit society at large and accelerate progress.
The UAE Federal and emirate governments give citizens and occupants/residents a wide range of publicserviceswhich includes streets, hospitals,government schools, parks and police administrations. These services are paid for from the government budgets so to fulfill these requirements government have to raise their income; VAT will provide the country with a new source of income which will contribute to the continued provision of high quality public services into the future, it will also reduce the dependency on oil.
ShaikhHamdan Bin Rashid Al Maktoum, Deputy Ruler of Dubai, UAE Minister of Finance and Chairman of the Federal Tax Authority said that “The Federal Decree-Law issued by HH ShaikhKhalifa Bin Zayed is the bedrock of the UAE’s planned tax system, which was intended to meet the most stringent of benchmarks and best practices,” Where ShaikhHamdan added that “The new tax system will provide will give additional help to the government to implement the vision of the UAE leadership and build a diversified and productive knowledge economy.”
The decree-law gives that all supplies of goods and services are liable to VAT at a standard rate of 5 percent— except for particular supplies which are subjected to the zero rate and all those which are exempted as determined in the decree-law. Tax imposed might be the obligation of an assessable individual/person who makes taxable supplies or deemed supplies or on imports.
For registering VAT in UAE quickly, please visit https://www.unitedvat.com/vat/vat-registration