Value Added Tax (VAT)

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Value Added Tax (VAT) was introduced in the UAE on 1 January 2018 with a rate of VAT 5%. The VAT, as a general consumption tax, will apply to the majority of transactions in goods and services. UAE imposes VAT on tax registered businesses on a taxable supply of goods or services at each step of the supply chain. VAT registered businesses collect the amount on behalf of the government; consumers bear the VAT in the form of a 5% increase in the cost of taxable goods and services they purchase in the UAE.

A limited number of exemptions may be granted. Please find here the link to the VAT Decree-Law N (8) of 2017 on Value Added Tax.

A business must register for VAT if its taxable supplies and imports exceed AED 375,000 per annum. It is optional for businesses whose supplies and imports exceeds AED 187,500 per annum. Foreign businesses may also recover the VAT they incur when visiting the UAE. VAT applies equally on tax registered businesses managed on the UAE mainland and in the Free zones. However, the UAE cabinet has defined certain free zones as designated zones. These will be treated as outside the UAE for tax purposes. The transfer of goods between designated zones are tax free. Please find here the list of the designated zones.

Please find here more information on VAT and on how to register for VAT with the Federal Tax Authority (FTA) of the UAE.

At the end of each tax period, VAT registered businesses or the 'taxable persons' must submit a VAT return to the FTA. The following guideline shows your four steps to register a VAT return, please click here for the link.

For more information, please do not hesitate to contact the AHK Dubai.

VAT Refund for Exhibitions and Conferences:

VAT Refund for Exhibitions and Conferences: Conferences, trade fairs and exhibitions play an outstanding role for the United Arab Emirates (UAE). In order to support this important sector and to boost the international reputation of the country as a platform for trade fairs and conferences, the Federal Tax Authority (FTA) of the United Arab Emirates has published a user guide with the title “VAT Refund for Exhibitions and Conferences”. We have summarized the conditions under which participants are not liable to VAT under the current UAE tax law here.

The full User Guide from FTA can be found here

VAT Refund for Exhibitions and Conferences:

VAT Refund Scheme for Tourists will come into effect from November 18, 2018

The UAE Federal Tax Authority (FTA) has announced that the tax refund scheme for tourists will come into effect from November 18, allowing eligible tourists to request refunds of value added tax (VAT) incurred on their purchases.

The first phase will see the digital system of the Tax Refund for Tourists Scheme implemented at Abu Dhabi, Dubai and Sharjah international airports. As of mid-December, the system will be fully operational to include all airports and land and sea ports in the UAE.

The authority explained that tax invoices issued starting from November 18, 2018 will qualify tourists who are eligible for a tax refund to reclaim taxes incurred on their purchases.

 Conditions for retailers to take part in the scheme:

  1. The retailer must be registered with the FTA for VAT and have a tax registration number (TRN)
  2. The supplier' sales of goods must not be excluded from the refund scheme, as determined by the   authority.
  3. The retailer must submit a request to participate in the Scheme as determined by the FTA
  4. The retailer must meet the financial credit requirements specified by the system operator and be committed to submitting Tax Returns and paying due taxes regularly.

 For further information please contact the AHK Dubai.  

Please note that for a final judgement you should seek an expert’s advice.

 Online Portal:

The UAE’s Federal Tax Authority has announced it has developed its eservices to allow taxpayers to be linked directly to recognized tax agencies via eservices.tax.gov.ae. The link enables agencies to register tax returns and make tax related transactions on behalf of a taxpayer. The Authority said the service can be used by taxpayers to appoint an agency to represent them in tax affairs”

VAT Experts

Please find a selection of companies with VAT related expertise from our membership here or the members of the AHK Legal Network.