UAE VAT ( 1st January 2018 )

UAE will implement VAT at the rate of 5% effective from 1st January 2018. Businesses with a minimum turnover of AED375,000 are required to take necessary steps to fully comply with VAT for taxable supplies and imports with some limited exceptions on basic food items, healthcare and education.

UAE VAT - QUICK FACTS!

Effective from
1st
January,
2018
VAT Rate
5%
Registration deadline
4th
December,
2017
Minimum Annual Turnover
AED
375,000

VAT is one of the most common types of consumption tax found around the world. Over 150 countries have implemented VAT (or its equivalent, Goods and Services Tax)

VAT is charged at each step of the ‘supply chain’. Ultimate consumers generally bear the VAT cost while Businesses collect and account for the tax, in a way acting as a tax collector on behalf of the government.

A business pays the government the tax that it collects from the customers while it may also receive a refund from the government on tax that it has paid to its suppliers.

VAT will be introduced across the UAE on 1 January 2018

VAT will be charged at a standard rate of 5%.

VAT, as a general consumption tax, will apply to the majority of transactions of goods and services unless specifically exempted or excepted by law.

Businesses will be responsible for carefully documenting their business income and costs and associated VAT charges. Registered businesses and traders will charge VAT to all of their customers at the prevailing rate and incur VAT on goods / services that they buy from suppliers. The difference between these sums is reclaimed or paid to the government.

As announced by Ministry of Finance, the deadline for VAT Registration is as below

  • Entities with turnover over AED 150 million (by 31-Oct-2017)
  • Entities with turnover over AED 10 million (by 30-Nov-2017)
  • Rest who meet eligibility criteria must register by 4-Dec-2017

Some of the documents required for registration:

  • Commercial / Trade license
  • Owner/Manager's Passport copy
  • Owner/Manager's Emirates ID
  • Authorized signatory documents.
  • Bank account details.
  • Certificate of Incorporation (If Applicable)
  • Articles of Association/Partnership Agreement (If Applicable)

Other Information required:

  • Description of Business activities
  • Last 12 months turnover figures
  • Projected future turnover figures (next 30 days)

Click here to register VAT Registration

Click here to View Download

For a simplified set of Frequently Asked Questions (FAQ's), please click Ministry of Finance (MOF) website