The UAE government implemented the Value Added Tax (VAT) Act on January 1, 2018 to a variety of commodities throughout the nation at an average ratio of 5%. Local businesses may avail of VAT registration in the UAE to recuperate some of the cost as a result of this new tax. We have received a lot of queries with regards to VAT. Provided below are answers to some of the most common questions we have received.
What is VAT?
Value Added Tax refers to the Indirect tax imposed on commodities which can be equated to the type of universal consumption tax enforced on the consumption of goods & services. That is a comprehensive multistage consumption tax taxed the supply chain transversely as well as collected by companies on behalf of the government. In the long run, VAT is experienced besides the customer who is the end user incurs it rather than the firms.
Why VAT in UAE?
The primary purpose of the VAT policy is that it will aid towards the provision of additional revenue for the UAE government. This collected revenue will be used to deliver better amenities and services to the people living in the UAE.
The implemented Act is one of the strategies used by the government. It is hoped that this strategy will help reduce the UAE’s over-reliance on oil & hydrocarbons as the key source of revenue. Get in touch with our representatives if you have any questions about VAT or would like assistance on how to conduct VAT registration in Dubai or other parts of the UAE.