VAT (Value Added Tax)

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Overview

Value Added Tax (VAT) is a consumption tax levied on the value added to goods and services at each stage of the production and distribution chain.

Vat (Value Added Tax)

Introduction

VAT was introduced in the UAE on 1 January 2018. “A business must register for VAT if its taxable supplies and imports in the last 12 months exceed AED 375,000. It is optional for businesses whose supplies and imports in the last 12 months exceed AED 187,500. Your company must also register for VAT in the UAE, if supplies and imports are expected to exceed the necessary threshold in the next 30 days.” APEX Business Consultants LLC help business with the registration process for VAT Value Added Tax.

UAE charges VAT on taxable supplies of goods or services at each stage of the supply chain. This general rate amounts to 5%, whilst some goods and services incur a 0% VAT rate, and some goods and services are exempt from VAT.

VAT registrant in the UAE must pay any outstanding taxes by the due date of tax return. Excess input VAT can, in principle, be claimed back from the FTA, subject to a specific procedure. Alternatively, VAT credits may be carried forward and deducted from future output VAT.

Businesses are required to maintain and keep tax records for at least 5 years as per UAE VAT Law. Depending on the types of businesses, the period of record keeping for VAT may differ.

Businesses that do not comply with their VAT obligations can be subject to fines and penalties. There are both fixed and tax-geared penalties.

APEX Business Consultants LLC

navigate the complexities of VAT compliance, helping businesses manage filings, claim refunds, and optimize their VAT strategy.