Value-added tax or VAT is the current tax regime for every type of business and entity in the UAE. The introduction of the regime was on January 1st, 2018, to bring order to the tax system of UAE’s businesses and organizations which register. The standard rate of VAT in the UAE is about 5%. However, some companies like those in the zero-rated sectors and VAT exemption UAE sectors like local passenger transport are not obliged to pay VAT. Other than those, companies whose annual turnover exceeds AED 375,000 must pay a 5% VAT, according to the UAE VAT law. Also, businesses whose taxable supplies and imports value exceed AED 187,500 per annum can pay VAT, but it is optional.
The penalties for non-compliance with VAT are extremely severe in the UAE. Also, note that authorities can charge the VAT penalties from the due date of filing the tax return and not from the date of voluntary disclosure. According to the UAE VAT law, companies conducting businesses must file their VAT returns every quarter, within 28 days from the end of the tax period.
For enquiries, call +971 45 570 204 / E-mail: [email protected]
On the UAE VAT updates in 2021, since the outbreak of COVID-19, the VAT on masks, sanitizers, and primary healthcare has become zero. Oman has currently joined the list of countries implementing VAT, and its tax authority has issued a notice to release further guidelines on the same. The FTA UAE has also made provisions for companies to contact them at any time for clearing their queries.
KGRN is one of the leading legal firms in the UAE. We have a team of well-experienced and knowledgeable professionals who have expertise in various sectors. We assist companies and entities in the UAE in VAT-related issues, including registration and VAT return filing. Contact our professionals for further details and assistance on their VAT related queries.
For enquiries, call +971 45 570 204 / email: [email protected]
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