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Faqs Vat FAQs


What are the VAT-related responsibilities of businesses in UAE?

All businesses in the UAE will need to record their financial transactions and ensure that their financial records are accurate and up to date. Businesses that meet the minimum annual turnover requirement (as evidenced by their financial records) will be required to register for VAT. Businesses that

Posted 21 October, 2018

Will all businesses in UAE need to register with the UAE government for VAT?

No, not all businesses will need to register for VAT. In simple terms, only businesses that meet a certain minimum annual turnover requirement will have to register for VAT. That is, many small businesses will not need to register for VAT. We have made this decision to safeguard small businesses fro

Posted 21 October, 2018

What measures will the government take to ensure that businesses don’t use the VAT implementation in UAE as an excuse to increase prices?

VAT is intended to help improve the economic base of the country. Therefore, we will include rules that require businesses to be clear about how much VAT you are paying for each transaction. You will have the required information to decide whether to buy something or not.

Posted 21 October, 2018

Will the cost of living increase in UAE?

The cost of living is likely to increase slightly, but this will vary depending on the individual’s lifestyle and spending behavior. If your spending is mainly on those things which are relieved from VAT, you are unlikely to see any significant increase.

Posted 21 October, 2018

Will VAT in UAE cover all products and services?

VAT, as a general consumption tax, will apply to the majority of transactions in goods and services. A limited number of reliefs may be granted.

Posted 21 October, 2018

How will the government of UAE collect VAT?

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 betwe

Posted 21 October, 2018

When will the VAT go into effect UAE and what will be the rates?

VAT is likely to be introduced across the UAE on January 1 2018. The rate will be low and is likely to be 5%.

Posted 21 October, 2018

Why does the UAE need to coordinate VAT implementation with other GCC countries?

The UAE is part of a group of countries which are closely connected through “The Economic Agreement between the GCC States” and “The GCC Customs Union”. The GCC group of nations have historically worked together in designing and implementing new public policies as we recognize that such a co

Posted 21 October, 2018

Why is the UAE implementing VAT?

The UAE Federal and Emirate governments provide citizens and residents with many different public services – including hospitals, roads, public schools, parks, waste control, and police services. These services are paid for from the government budgets. VAT will provide our country with a new sourc

Posted 21 October, 2018

What is the difference between VAT and Sales Tax?

A sales tax is also a consumption tax, just like VAT. For the general public there may be no observable difference between how the two types of taxes work, but there are some key differences. In many countries, sales taxes are only imposed on transactions involving goods. In addition, sales tax is o

Posted 21 October, 2018