It’s time to start gearing up for the new UAE VAT. The UAE’s Ministry of Finance (MoF) has confirmed that a Value-Added Tax (VAT) will be at the 5% rate in January 2018 to be paid by consumers and collected and accounted by businesses on behalf of the government. The exceptions will be healthcare and education services as well as 94 food items on which there will be no VAT.
With the deadline for implementation just around the corner, it is important that businesses begin educating their employee’s, clients and suppliers on the implications of this new taxation system. The Value-Added Tax (VAT) is likely going to have an impact on their businesses, says Obaid Humaid Al Tayer, UAE Minister of State for Financial Affairs. He noted that there’s still a lack of preparation and awareness among businesses in the region before the GCC-wide implementation. This is a concern considering also the possible impact on customers.
Businesses should start registering for VAT as soon as October 2017 but not after December 31st; otherwise companies could risk fines. The MoF is in the process of defining the exact fees and penalties for non-compliance. For assistance, or seek out guidance to start the process, contact any number of the VAT Experts in UAE. They can help to understand UAE’s evolving tax regime and assist with the business’ obligations and entitlements.
Businesses ought to have a VAT implementation strategy in place ahead of its implementation, as “no organization is completely exempt from the effects of this new era of change.” It is true that small companies with a lower annual turnover will not have to register, but they will still be required to record all their transactions. Businesses should be sure to save a copy of the VAT Invoice as documentary evidence on record in case of a VAT audit upon request by the tax authorities.
Does your company have a strategy for implementing VAT or do you need the services of experienced specialists to ensure compliance with the UAE VAT legislative requirements? GCC Businesses are still not prepared for VAT Implementation. “Businesses in the GCC should urgently seek out the guidance of tax advisors and create a roadmap to make themselves VAT ready for 2018.”
VAT in Dubai and UAE. It’s coming, so get ready for it? Be sure to check the DubaiBlog feeds to know how to be VAT compliant.