VAT
VAT is the abbreviation of Value-added Tax, a tax levied at the point of sale on the consumption of goods and services. VAT is used in over 180 countries worldwide, it is basically a form of indirect tax. Except for the United States, all OECD countries have VAT (or a variation). VAT is a more sophisticated tax and overcomes many obstacles that affect the general sales tax but it seems exactly equivalent as a general sales tax to end users.
At each stage of the “supply chain” VAT is charged. Usually, VAT cost is bear by the end user whereas businesses retrieve and account for the tax, in a sense supposed to act as a tax collector on behalf of the Federal Tax Authority. Only businesses that are VAT registered should need to charge and account for VAT.
“Finnection” team of professionals can evaluate your VAT status and compliance obligations. Please keep in mind that failing to register your business once you meet the minimum criteria will result in government penalty.
As part of the ‘The Economic Agreement between the GCC States’ and ‘The GCC Customs Union’, UAE needs to align VAT execution with other GCC countries.For the planning and implementing new rules or policies GCC has always worked together with an integrated effort which is ideal for the collective development of the region.
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Optionally, you can visit our vast FAQs library to find the answers toward any supplementary VAT-related queries you may have.
The UAE Federal and Emirate governments provide citizens and residents with many different public services – including hospitals, roads, public schools, parks, waste control, and police services. These services are paid for from the government budgets. VAT will provide our country with a new source of income which will contribute to the continued provision of high-quality public services into the future. It will also help government move towards its vision of reducing dependence on oil and other hydrocarbons as a source of revenue.