The UAE VAT is coming: UAE is getting ready to implement Value Added Tax (VAT) on businesses.
In the first phase, registration for UAE VAT is mandatory for companies whose annual revenues exceed Dh3.75m while it is optional for those whose revenues range between Dh1.87m and Dh3.75m
Companies in the UAE that record annual revenues over Dh3.75 million will be obliged to register under a Value Added Tax (VAT) system, and will accordingly be taxed, according to Younis Al Khoury, undersecretary at the country’s Ministry of Finance.
Companies whose revenues range between Dh1.87 million and Dh3.75 million will have an option to either register under the system or not during the first phase of rolling out the system.
It will eventually become obligatory for all companies to register under the VAT system when it is rolled out in Phase 2.
It is reported that the UAE VAT will not be applied on certain industries like education and health care. Staple food items would also be exempted from VAT.
When VAT is introduced in 2018, the UAE is expected to generate around Dh10 billion to Dh12 billion in revenues from the tax in the first year of implementation.