General 

Information

VALUE ADDED TAX (VAT) IN UNITED ARAB EMIRATES

  • VAT is a form of tax levied on the consumption of goods and services levied at the point of supply. Many countries have VAT or an equivalent tax system (i.e. GST) but some countries have other consumption taxes.

  • VAT is collected by registered suppliers down the supply chain. Not all businesses will be VAT registered suppliers. VAT is payable by both businesses and individuals.

 

Highlights

  • Current Registration deadline -  December 2017

  • Turnover thresh-hold for mandatory registration is AED 375,000/- and above

    • (Revenue/Sales - Previous 12 Months or Forecasted Next 30 Days)

  • Turnover thresh-hold for Voluntary registration is AED 187,500/- and above

    • (Revenue/Sales - Previous 12 Months or Forecasted Next 30 Days)

  • 5% is maximum rate announced by the government on all items

 

Further Details

  • Calculation: Threshold will be calculated as follows:

    • Total value of supplies made by a taxable person for the previous 12 months; or

    • Total value of supplies of the subsequent 12 Months

    • Value of exempted supplies will not be considered for computing the annual supplies

Book keeping & Accounting

 

Books of account and any information necessary to verify entries, including, but not limited to:

  • Annual accounts, general ledger, purchase day book, invoices issued or received, credit notes and debit notes for a minimum of 5 years.

  • Invoices must be issued within 14 calendar days of the date of the supply.

  • Invoices, credit and debit notes:

  • All tax invoices and alternative documents related to receiving the goods or services

  • All received tax credit notes and alternative documents received

  • All tax invoices and alternative documents issued

  • All tax credit notes and alternative documents issued

VAT Account:

  • VAT due on taxable supplies (incl. those pursuant the reverse charge mechanism)

  • VAT due after error correction or adjustment

  • VAT deductible after error correction or adjustment

  • VAT deductible for supplies or imports

Records of:

  • All supplies and imports of goods and services

  • Exported goods and services

  • Goods and services that have been disposed of or used for matters not related to business

  • Goods and services purchased for which the input tax was not deducted

Conditions for valid tax invoices:

  • A sequential number which uniquely identifies the document.

  • The date of issue of the invoice & The time of supply (only if different from the invoice date)

  • The name, address and TRN of the supplier

  • For each description, the quantity of goods or extent of services supplied, the rate of VAT and amount payable, expressed in UAE Dirham.

  • The total amount of VAT expressed in UAE Dirham together with the rate of exchange applied and the source of that rate, as below

Tax Return filing & Payment:

Submission online and only in very limited circumstances (and at the sole discretion of the FTA) on paper.

Deadlines for submission and payment:

  • The due date will be within the month following the end of the return period (every quarter) and announced by the Executive Regulations and where the due date falls on a weekend or national holiday, the deadline shall be extended to the first following working day.

 

Required documents for Registration with Federal Tax Authority for TAX:

  • Trade License Copy

  • Chamber of Commerce Certificate Copy

  • Local Sponsor’s Passport & Emirates ID Copy

  • Partners / Authorized Signatory Passport & Emirates ID Copy

  • Power of Attorney

  • IBAN Number of Companies Bank Account

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