Frequently Asked Questions
If you have any concerns please read this collection of frequently asked questions before contacting us. If you are still unclear about something feel free to contact.
Value Added Tax (or VAT) is an indirect tax applied on the consumption of most goods and services. It is also referred to as a type of general consumption tax. It is imposed on a product at each stage of production before the final sale. At each stage in the supply chain, businesses collect VAT on behalf of the government. Because it is added to the customer’s purchase price, ultimately it is the end consumer who pays VAT.
One of the main reasons for implementing VAT in UAE is to generate more revenue for the government. Using this revenue, the Government plans to offer various types of public services, including medical facilities, good roads, transportation facilities, public schools, parks, waste control, and more. VAT will also provide a new source of non-oil revenue for the Emirates.
Each person’s cost of living is affected by their lifestyle, so the impact of VAT will vary between individuals. There will probably be a slight increase in overall cost of living, but a person who spends mostly on exempt and zero-rated things will not see much increase.
The Federal Tax Authority has decided to introduce VAT in the UAE by 01 January 2018.
The short answer is yes. The travel and tourism industry is an important part of the UAE’s national economy.
Not all parts of the industry will be subject to the same VAT rates, though. The travel and tourism sector can be broken down into several components, such as luxury, medical, education, meetings, exhibitions, healthcare, education, events and other special interest groups. It is expected that healthcare and education will be zero-rated supplies in the UAE. Meetings, conferences, events, and trade expos, which account for a significant portion the revenue-generating drive of the tourism sector, will be taxable.
Currently, the UAE is doing a feasibility study of a Tourist Refund Scheme where visitors and tourists will be able to claim a refund on VAT paid on certain goods and services purchased in the UAE.
Output VAT is the value added tax that you calculate and charge on your own sales of goods and services if you are registered for VAT. Output VAT must be charged on sales both to other businesses and to ordinary consumers. Input VAT is the value added tax added to the price you pay for eligible goods or services. If you are registered for VAT, you can deduct the amount of VAT paid from your settlement with the tax authorities.
A business should register for VAT if their taxable supplies and imports exceed the mandatory registration threshold of 375,000 AED.
A business can also choose to register for VAT voluntarily under two conditions:
The proposed standard rate of VAT in the UAE will be up to 5%. Certain supplies of goods and services may be either exempt (meaning VAT will not be applicable at all), or zero-rated (meaning 0% VAT will be applied to goods and services). The standard rate will be applied to all goods and services that do not fall under an exempt or zero-rated goods and services category.
Frequently Asked Questions
If you have any concerns please read this collection of frequently asked questions before contacting us. If you are still unclear about something feel free to contact.
No, the head office and branches are considered to be a single taxable entity under VAT, provided that they are part of the same legal entity. This also applies for two branches with different commercial registrations.
Due to incorrect documents for VAT registration, many taxpayers haven’t yet received their TRN. In order to compensate for this, the FTA has provided provisional TRNs which will act as a temporary TRN until the taxpayer gets their permanent TRN. Businesses that have registered before Dec 4th, 2017 should have already gotten their provisional TRN.
Yes, you can. Businesses registering for VAT will not face any registration penalty until April 30th 2018, but they are required to settle all the taxes due from January 1st 2018. Earlier, the deadline for VAT registration was December 4th 2017, which has been extended by the FTA to April 30th 2018. If your VAT registration fails due to incorrect documentation, you will be provided with a provisional TRN which will act as your TRN until you get a permanent one.
No, businesses registering for VAT will not face any registration penalty until April 30th 2018, but they are required to settle all the taxes due from January 1st 2018. Earlier, the deadline for VAT registration was December 4th 2017, which has been extended by the FTA to April 30th 2018.
Yes, you can use your provisional TRN until you get your permanent TRN from the FTA.
The FTA will issue a temporary TRN number called the Provisional TRN to taxpayers who don’t get their TRN due to failure of their VAT registration (usually occurs due to submission of incorrect documents). Taxpayers can use this Provisional TRN for transactions until their registration is completed successfully and they get their TRN.
Frequently Asked Questions
If you have any concerns please read this collection of frequently asked questions before contacting us. If you are still unclear about something feel free to contact.
Yes, goods imported into the UAE will be subject to 5% VAT starting on January 1st, 2018.
Note: Import of precious metals is taxed at 0%.
At each stage in the supply chain, businesses collect VAT on behalf of the government. Because it is added to the customer’s purchase price, ultimately it is the end consumer who pays VAT.
All the goods and services imported from abroad are taxed under the VAT regime.
The importer is due to pay VAT as soon as they submit the tax return. The returns must be filed within 28 days after the end of the tax period in which the import happened.
VAT is calculated on the value of imported goods as follows: For low-value shipments (less than or equal to custom declared value of AED 1000):
No, VAT is not applicable in this case.
No, VAT is not applicable in this case.
No, VAT is not applicable in this case.
No, VAT is not applicable in this case.
Yes, you can recover the input tax paid on imports if you’re registered with the FTA and have a Tax Registration Number (TRN).
If your firm is located in a free zone that is not listed as a designated zone, then the imports will be taxed based on their value.
Frequently Asked Questions
If you have any concerns please read this collection of frequently asked questions before contacting us. If you are still unclear about something feel free to contact.
Export of goods and services outside the GCC and international transportation are zero rated. They must be reported in tax returns, but no VAT will apply.
If an export falls under any of the following conditions, it will be taxed:
Yes, the VAT treatment differs based on the recipient’s VAT registration status.
Yes, you can recover input tax on supplies used to make exports since they are taxable supplies. If you are involved in local supply within the UAE, you can recover input tax to reduce your tax liability. Also, if you’re involved only in export of goods, then you can get a refund for the VAT paid on the inputs.
In order to prove that you export is genuine, you need all of the following documents:
Frequently Asked Questions
If you have any concerns please read this collection of frequently asked questions before contacting us. If you are still unclear about something feel free to contact.
Supply refers to goods or services that are exchanged for consideration (payment). Supply occurs when there’s a transaction between two people and at least one of them is a registered taxpayer. Supply includes buying, selling and stock transfers, even if there is no exchange of money.
Yes, the Federal Tax Authority (FTA) has issued guidelines to charge 5% VAT on sale or purchase of pre-owned goods such as vehicles and furnitures. However, the amount on which VAT to be levied depends on when the item was purchased.
These activities and payments are out of the scope of VAT.
These supplies are out of the scope of VAT.
Secondhand goods (including cars sold by retailers), antiques, and collections are taxed at 5% of the profit margin.
Yes, online shopping is taxed at 5%.
VAT is calculated on the discounted price of the product. For example, if the price of an item is 110 AED and the seller gives a discount of 10 AED, then the VAT on the product is 5% of 100 AED. The total cost of the product would be 120 AED (100 AED purchase price + 20 AED of VAT).
Loans are not subject to VAT under UAE, but the processing charges are subject to 5% VAT.
The place of supply is a component of supply that determines where a transaction has occurred for VAT purposes.
Frequently Asked Questions
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Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap.
Good strategy is the antidote to competition. Strategic thinking is the process of developing a strategy that defines your value proposition and your unique value chain. This process includes market and competitive research as well as an assessment of the company’s capabilities and the industry forces impacting it.
Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap.Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry standard dummy text ever since the 1500s.
Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap.
Frequently Asked Questions
Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic .
Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap.Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry standard dummy text ever since the 1500s.
Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap.
Good strategy is the antidote to competition. Strategic thinking is the process of developing a strategy that defines your value proposition and your unique value chain. This process includes market and competitive research as well as an assessment of the company’s capabilities and the industry forces impacting it.
Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap.
Good strategy is the antidote to competition. Strategic thinking is the process of developing a strategy that defines your value proposition and your unique value chain. This process includes market and competitive research as well as an assessment of the company’s capabilities and the industry forces impacting it.
Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap.Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry standard dummy text ever since the 1500s.
Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap.
Frequently Asked Questions
Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic .
Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap.Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry standard dummy text ever since the 1500s.
Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap.
Good strategy is the antidote to competition. Strategic thinking is the process of developing a strategy that defines your value proposition and your unique value chain. This process includes market and competitive research as well as an assessment of the company’s capabilities and the industry forces impacting it.
Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap.
Good strategy is the antidote to competition. Strategic thinking is the process of developing a strategy that defines your value proposition and your unique value chain. This process includes market and competitive research as well as an assessment of the company’s capabilities and the industry forces impacting it.
Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap.Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry standard dummy text ever since the 1500s.
Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap.
Frequently Asked Questions
Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic .
Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap.Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry standard dummy text ever since the 1500s.
Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap.
Good strategy is the antidote to competition. Strategic thinking is the process of developing a strategy that defines your value proposition and your unique value chain. This process includes market and competitive research as well as an assessment of the company’s capabilities and the industry forces impacting it.
Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap.
Good strategy is the antidote to competition. Strategic thinking is the process of developing a strategy that defines your value proposition and your unique value chain. This process includes market and competitive research as well as an assessment of the company’s capabilities and the industry forces impacting it.
Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap.Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry standard dummy text ever since the 1500s.
Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap.