United Arab Emirates VAT Guide for Businesses
Value-added tax (VAT) is a relatively new phenomenon in the United Arab Emirates, implemented by the UAE government on January 1, 2018, to help raise funds for public projects and services. The VAT scheme also serves a dual purpose, allowing the country to move away from a reliance on oil and gas revenue.
Although the UAE’s VAT program is in its infancy, the country’s Federal Tax Authority has made the process as simple as possible, with easy-to-use online services and an E-Learning portal.
While most UAE nationals will need to pay VAT at each step of the supply chain, foreign businesses and tourists can apply for refunds on a case-by-case basis.
Are all businesses liable to register under VAT? No, only those businesses crossing the defined annual aggregate turnover threshold are liable to register under VAT. Based on the registration threshold, a business will either be mandated to register or as an option, a business can apply for registration or can seek exemption from VAT registration
On this basis, VAT registration in UAE can be classified into the following:
- Mandatory VAT Registration
- Voluntary VAT Registration
- Exemption from VAT Registration
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