Value Added Tax or VAT is a form of indirect tax imposed on the import and supply of Goods and Services at each stage of production and distribution or sale. The end consumers bear the ultimate cost.
It is mandatory for businesses in UAE to register for VAT if their taxable supplies and imports exceed AED 375,000 per annum. Entities can also voluntarily register for VAT if their taxable supplies and imports exceed AED 187,500 per annum.
A taxable supply refers to a delivery of goods or services made by a company in the UAE that may be taxed at a rate of either 5% or 0%.
A taxable supply refers to supply of goods or services for a consideration by a person conducting business in the state that may be taxed at a rate of either 5% or 0%, and does not include exempt supplies.
Zero rated Supply Verses Exempt Supplies
Good and Services on which zero-rate (0%) tax is levied are Zero-Rated supplies. For a zero-rated supplies input tax can be recovered.
Goods and Services on which no tax is due and no input tax may be recovered as per the provisions of law are Exempted supplies. Also, if all your supplies are in the category of exempted supplies, you are not required to register for VAT.
Staying updated with the new tax laws and clarification can be challenging. To ensure compliance with Federal Tax Authority (FTA) regulations, we are here for you! We assure you that you can run your business without worrying about the procedural FTA requirements.
We have a VAT expert team to assist you with the following VAT related services:
Let's get down to business!
Professional services are right here around the corner.