Things you should know about VAT in the UAE..
Value Added Tax (VAT) is due to be implemented in the UAE in January 2018.VAT is an indirect tax, applies to the supply of goods and services. VAT is levied at each stage in the supply chain and is collected by registered business on behalf of the government.Businesses and individuals engaged in any business activity whose turnover exceeds the mandatory VAT registration threshold must register for VAT.
Furthermore, a business may choose to register for VAT voluntarily if their supplies and imports are less than the mandatory registration threshold, but exceed the voluntary registration threshold.Similarly, a business may register voluntarily if their expenses exceed the voluntary registration threshold. This latter opportunity to register voluntarily is designed to enable start-up businesses with no turnover to register for VAT.The standard rate of the VAT is expected to be 5%. In addition, certain goods and services could be subject to VAT at a rate of 0%, and other goods and services could be exempted from the VAT.
VAT Related Responsibilities of Businesses.
All businesses in the UAE will need to record their financial transactions and ensure that their financial records are accurate and up to date. Businesses that do not think that they should be VAT registered should maintain their financial records in any event, in the case to establish whether they should be registered.
VAT-registered businesses generally:must charge VAT on taxable goods or services they supply;may reclaim any VAT they’ve paid on business-related goods or services;keep a range of business records which will allow the government to check that they have got things right