Firms whose annual taxable goods and supplies’ value is over AED 375,000 must compulsorily register for VAT. Companies whose annual taxable goods and supplies’ value is less than this limit, but over AED 187,500, may register for VAT on a voluntary basis.
Businesses should document their earnings and expenditures related to VAT. Registered businesses should:
The difference between these two amounts shall be paid to or reclaimed from the government, as may be the case.
Business taxpayers should file VAT returns with the Federal Tax Authority (FTA) within 28 days from the end of the tax period, as per the procedures mentioned in the VAT legislation.
VAT will not be levied on the following categories of supplies:
A non-resident making taxable supplies within the UAE needs to register for VAT and pay tax unless any other registered UAE resident is already paying VAT for such supplies.
Businesses must maintain tax invoices, received and issued, for at least 5 years.
VAT is payable over and above the customs duty paid by an importer. VAT shall be computed on the price of the good/service including custom duty.
In case of non-compliance, penalties would be imposed. Non-compliance could refer to:
VAT would be introduced in the UAE from the 1st of January 2018. Businesses with an annual revenue of more than AED 150 million are urged by the authorities to register for VAT before 31 October, 2017. Businesses with an annual revenue of more than AED 10 million are advised to register before 30 November, 2017.
We at Business Setup Worldwide are there to assist you with corporate tax consultancy services. Feel free to contact us for any help or clarification on VAT, or tax consultation in general, in the UAE.