Ingenious Corporate Services – Company Set-up in Dubai, United Arab Emirates
VAT Advisory Services in Dubai, UAE
In the past few years, the United Arab Emirates, which was once called a tax haven, has introduced and implemented several taxes. And VAT is one of them. Yes, the same Value Added Tax that most countries impose on the use or consumption of goods and services at each point of sale. It is a form of indirect tax that is ultimately borne by the end consumer of the products. Late in the game, UAE enforced Value Added Tax or VAT on 1 January 2018 across all its seven emirates. And since then, all the eligible businesses are required to levy VAT from their immediate customers at the rate of 5% on behalf of the UAE Government. Taxable Businesses in UAE must adhere to the law and regulations of the Federal Tax Authority (FTA) to steer clear of VAT-related fines and penalties in the UAE. That’s the last thing any company would want. One of the best ways to stay compliant with the UAE VAT Law is to work with one of the best VAT consultants in Dubai, UAE. Not just that, by outsourcing VAT functions to tax experts in Dubai, you bet you will be able to focus on your core business operations adequately.
In the past few years, the United Arab Emirates, which was once called a tax haven, has introduced and implemented several taxes. And VAT is one of them. Yes, the same Value Added Tax that most countries impose on the use or consumption of goods and services at each point of sale. It is a form of indirect tax that is ultimately borne by the end consumer of the products. Late in the game, UAE enforced Value Added Tax or VAT on 1 January 2018 across all its seven emirates. And since then, all the eligible businesses are required to levy VAT from their immediate customers at the rate of 5% on behalf of the UAE Government. Taxable Businesses in UAE must adhere to the law and regulations of the Federal Tax Authority (FTA) to steer clear of VAT-related fines and penalties in the UAE. That’s the last thing any company would want. One of the best ways to stay compliant with the UAE VAT Law is to work with one of the best VAT consultants in Dubai, UAE. Not just that, by outsourcing VAT functions to tax experts in Dubai, you bet you will be able to focus on your core business operations adequately.
VAT Law in UAE
UAE levies VAT on tax-registered businesses at a rate of 5% on a taxable supply of goods or services at each supply chain step. However, not all businesses in UAE have to undergo VAT registration. Only those that are eligible as per the set VAT registration criteria have to go for it.
Mandatory VAT Registration:
It is mandatory for a UAE-based business entity to register for VAT if its taxable supplies and imports surpass the compulsory registration threshold of AED 375,000. The business is subject to pay tax.
Voluntary VAT Registration:
A UAE-based business is free to choose to register for VAT if the total value of its taxable supplies and imports (or taxable expenses) exceeds the voluntary registration threshold of AED 187,500.
Mandatory VAT Registration:
It is mandatory for a UAE-based business entity to register for VAT if its taxable supplies and imports surpass the compulsory registration threshold of AED 375,000. The business is subject to pay tax.
Voluntary VAT Registration:
A UAE-based business is free to choose to register for VAT if the total value of its taxable supplies and imports (or taxable expenses) exceeds the voluntary registration threshold of AED 187,500.
VAT Rates in UAE
The applicable VAT rates in the UAE are as follows:
Standard rated (5% VAT)
Zero-rated (0% VAT)
Exempted (No VAT)
VAT Rates in UAE
The applicable VAT rates in the UAE are as follows:
Standard rated (5% VAT)
Zero-rated (0% VAT)
Exempted (No VAT)
Zero-rated VAT Vs. Exempted (No VAT)
Zero-rated VAT should not be confused with No-VAT. Both categories are different. Goods and services categorized as 0% or zero-rated VAT are still taxable supplies. However, the rate of VAT charged is 0%. VAT-exempt items are not taxable, and no VAT will be applicable to them. Simply put, for a “zero-rated good,” the government doesn’t tax its sale but permits credits for the VAT paid on inputs. On the other hand, when a good or business is “exempt,” the government doesn’t tax the sale of the good, but producers cannot claim a credit for the VAT they pay on inputs to produce it. Refer to the table below to understand what kinds of goods/services fall into each classification.
Zero-rated VAT should not be confused with No-VAT. Both categories are different. Goods and services categorized as 0% or zero-rated VAT are still taxable supplies. However, the rate of VAT charged is 0%. VAT-exempt items are not taxable, and no VAT will be applicable to them. Simply put, for a “zero-rated good,” the government doesn’t tax its sale but permits credits for the VAT paid on inputs. On the other hand, when a good or business is “exempt,” the government doesn’t tax the sale of the good, but producers cannot claim a credit for the VAT they pay on inputs to produce it. Refer to the table below to understand what kinds of goods/services fall into each classification.
Zero-rated VAT
International transportation, and related supplies
Exports of goods and services outside the UAE
Certain investment grade precious metals (e.g. gold, silver, of 99% purity)
Supplies of the certain sea, air, and land means of transportation (such as aircraft and ships)
Newly constructed residential properties
Utilities or prescription drugs
Children’s clothes, Footwear, Water, Basic food items, Books ,and Newspapers
No VAT
Local passenger transport
Bare land – sale and lease
Insurance services
Land
VAT Advisory Services in UAE That Can be Outsourced
- VAT Registration
- VAT Invoicing
- VAT Return Filing
- VAT Refund
- VAT Voluntary Disclosure
- VAT De-Registration
- VAT Courses/VAT Training
- VAT Audit
- VAT Consultancy
- VAT Reconsideration
VAT Advisory Services in UAE That Can be Outsourced
- VAT Registration
- VAT Invoicing
- VAT Return Filing
- VAT Refund
- VAT Voluntary Disclosure
- VAT De-Registration
- VAT Courses/VAT Training
- VAT Audit
- VAT Consultancy
- VAT Reconsideration
FTA Compliant VAT Services in Dubai, UAE
VAT brings opportunities as well as challenges with it. Many scenarios of VAT are extremely complex, and companies in UAE find them hard to cope with. Being registered under the UAE VAT law stipulates that the government recognizes your business. But most businesses don’t even know the right time and benefits to registering for VAT voluntarily. That’s why we say it sometimes gets tricky to deal with VAT-relation functions in UAE. However, availing of the VAT services in UAE from a pro VAT advisor like us will make your life a whole easier, and you will be able to manage the VAT aspects of your business easily. Ingenious Corporate Services in Dubai covers all the facets of VAT services in Dubai, UAE. For FTA-compliant VAT services in Dubai, UAE, Contact us. We have professional and experienced tax specialists who are hands-on with dealing with all kinds of complex issues concerning UAE VAT. We handle VAT with the utmost care, keeping in line with the rules and regulations of the Federal Tax Authority (FTA). Know more about our VAT assistance in Dubai by simply doing a free consultation with one of our VAT specialists in UAE via Zoom.
FTA Compliant VAT Services in Dubai, UAE
VAT brings opportunities as well as challenges with it. Many scenarios of VAT are extremely complex, and companies in UAE find them hard to cope with. Being registered under the UAE VAT law stipulates that the government recognizes your business. But most businesses don’t even know the right time and benefits to registering for VAT voluntarily. That’s why we say it sometimes gets tricky to deal with VAT-relation functions in UAE. However, availing of the VAT services in UAE from a pro VAT advisor like us will make your life a whole easier, and you will be able to manage the VAT aspects of your business easily. Ingenious Corporate Services in Dubai covers all the facets of VAT services in Dubai, UAE. For FTA-compliant VAT services in Dubai, UAE, Contact us. We have professional and experienced tax specialists who are hands-on with dealing with all kinds of complex issues concerning UAE VAT. We handle VAT with the utmost care, keeping in line with the rules and regulations of the Federal Tax Authority (FTA). Know more about our VAT assistance in Dubai by simply doing a free consultation with one of our VAT specialists in UAE via Zoom.
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