The United Arab Emirates (UAE) is all set to welcome the new Value Added Tax regime from January 2018.
As part of achieving the deadline, the President, His Highness Sheikh Khalifa bin Zayed Al Nahyan, has issued the Federal Decree-Law No. 8 of 2017 for Value-Added Tax, with one of the lowest rates in the world.
As per the new law, 5 per cent tax is set to be imposed on the import and supply of goods and services at each stage of production and distribution, including what is deemed to be a supply.
The United Arab Emirates (UAE) comprising of seven emirates has now confirmed the implementation of the Value Added Tax (VAT) on January 1, 2018.
“The VAT levy will take effect without any delay as stipulated in the decree which was issued on the 23rd of August 2017,” said Finance Ministry Undersecretary Yunis Khoury.
Abdulaziz Al Ghurair, chairman of the UAE Banks Federation reported the unwillingness of UAE-based financial institution for the implementation of VAT, calling for its postponement to enable all sectors to implement it correctly, especially banking and insurance.
The companies which fall under the VAT rules and regulation need to register with the Federal Tax Authorities before the January 1 deadline.
Around six GCC agreed to implement 5% VAT on goods and services in 2016, but only UAE and Saudi Arabia have announced that they would implement the tax on January 1, 2018.