Federal Tax Authority working in the UAE has introduced Official Website for Tax. It also offers Excise Tax registration option. This will enable the residents to know about their VAT in the UAE and they will also be eligible to register for VAT through this portal in the UAE. This service was expected to come in effect from January 1st, 2018 at a 5% standard rate. All the businesses should register for VAT if their assets value of annual supplies becomes more than the threshold of mandatory registration, which is AED 375,000/-. Voluntarily registration is also available for businesses if the annual supplies are more than the threshold of voluntary registration, which is AED 187,500/-.
While value added duty (VAT) in the UAE is rolling out and became mandatory, some businesses and residents are growing progressively concerned about how precisely the levy will influence their earnings. The release of VAT could make Dh12 billion in its first time and Dh20bn in its second season.
First there is certainly 5 % VAT on taxable items, then you have a couple of goods and services that are exempt, so for example there is absolutely no VAT on education, medical services, open public transport and properties or real estate. Then you have several items which are zero-rated, such as metals, airline, and gold. So when people say the UAE’s new VAT tax is complicated, it is determined by what you compare it to. Yes, moving from a routine where there is absolutely no tax to the one with several duties is complicated, but if you compare it to European countries it isn’t whatsoever complicated.
There’s a threshold limit of Dh375,000, so if your twelve-monthly turnover is significantly less than that you will not fall under the VAT net in any way. For smaller businesses that are in-line for VAT, they have to take a look at using programs and Apps – that happen to be being produced by private consultants – that can catch the info from the business enterprise and do the processing on their behalf so that the price tag on conformity is not burdensome.
Businesses have to have an accounting system and a billing system therefore the IT infrastructure must maintain place because each and every invoice created from January 1 really needs that VAT element. Among the issues is the fact non-compliance could invoke huge fines so people have to be absolutely sure they are completely compliant – they cannot afford to take risks with compliance.