What is VAT?
Value Added Tax or VAT is a tax on the consumption or use of goods and services. A VAT of 5 per cent is levied at the point of sale. Businesses collect and account for the tax on behalf of the government.
When to Register?
Furthermore, a business may choose to register for VAT voluntarily if its supplies and imports are less than the mandatory registration threshold, but exceed the voluntary registration threshold of AED 187,500
A business must register for VAT if its taxable supplies and imports exceed the mandatory registration threshold of AED 375,000
Similarly, a business may register voluntarily if its 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.
A business must register for VAT if its taxable supplies and imports exceed the mandatory registration threshold of AED 375,000
Similarly, a business may register voluntarily if its 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.
Exempt supplies are listed in Article 46 of the Federal Decree-Law no. (8) of 2017 on Value Added Tax, such as
- Financial services including life insurance and reinsurance of life insurance as well as financial services that are not conducted for an explicit fee, discount, commission, rebate or similar type of consideration.
- Residential buildings, other than the residential buildings which are specifically zero-rated.
- Bare land.
- Local passenger transport.
What Sectors are zero rated
- Exports of goods and services to outside the GCC.
- International and intra-GCC transport
- Supplies for certain sea, air, and land means of transportation (such as aircraft and ships).
- Supply of precious metals for investment (gold, silver, and platinum)
- Newly constructed residential properties that are supplied for the first time within three years of their construction.
- Supply of certain educational services and relevant goods and services.
- Supply of certain healthcare services and associated goods and services.
- Certain eatables (a standard list will be ratified across the GCC by the Financial and Economic Cooperation Committee)
- The educational sector
- The medical sector
- The real estate sector on residential building
- The local transport sector
- The oil sector and the oil and gas derivatives sector (at the discretion of each member state)
- Additionally, each member state can zero rate or VAT-exempt
Exempt supplies are listed in Article 46 of the Federal Decree-Law no. (8) of 2017 on Value Added Tax, such as
- Financial services including life insurance and reinsurance of life insurance as well as financial services that are not conducted for an explicit fee, discount, commission, rebate or similar type of consideration.
- Residential buildings, other than the residential buildings which are specifically zero-rated.
- Bare land.
- Local passenger transport.
When to file Vat?
Vat is file on the 28 of every month
Period to file Vat
- Vat can be file monthly or Quarterly
- Quarterly Vat filing is for company whose turnover is AED 150 Million and below Monthly Vat Filing is for company who turnover is AED 150 Million and Above
Documents And Information Required For Vat Registration
- Trade License
- Certificate of Association
- Memorandum of Association (MOA)
- Passport copy, visa copy, and Emirates ID copy of the owner/s
- UAE contact number and office number
- Email address
- 4-6 Sales and expense invoices with company stamp and signature on it
- Complete Bank account details
- On the basis of invoices provided, a turnover declaration form will be prepared which should be signed and stamped on each page.
