Important Facts That the Vat Services in UAE Suggest You to Know

On 1^st January, 2018, VAT or Value Added Tax was commenced by the UAE government. With this, the number of VAT services in UAE also increased. This was introduced to get an extra income source for UAE which will be used for offering high-standard of public services, and also to decrease its reliance on hydrocarbons and oil to get revenue. Businesses who are registered for VAT can charge this tax to its customers at the existing rate of 5%. So, it is necessary for every organisation to have a clear idea about this newly introduced tax Filing UAE. This blog presents some facts that can help you to learn more about the VAT in UAE.

So, here are the interesting facts that you must know:

·         A business needs to obtain a TRN or tax registration number after getting registered under the Federal Tax Authority in order to charge VAT.

·          It is estimated that this implemented VAT will help to enhance the economy of UAE by 12 billion dirhams in the beginning year only.

·         Equal VAT is applicable for all registered businesses both which are operated on the mainlands of UAE, as well as, on the free zones. Still, if a free zone is defined ‘designated zone’ by the UAE Cabinet, there won’t be any taxes charged for goods transfer amidst the designated zones.

·         An exemption from tax is enjoyed by medical fees, tickets of airlines, nurseries’ fees, public transport, and different government services.

·         The tax invoice which the customers will receive must display all the details of the VAT. Here, the charged tax, as well as, the TRN must be included.

·         If Salik cards are brought online, the buyer will not have to pay any VAT.

·         Clothes, hotel rents, food, the price of fuel, cosmetic products etc. are all charged at a rate of 5% VAT.

·         If a business fails to file the tax return by the given time, fines will be levied on the violator for breaking the UAE Tax Laws.

Introducing VAT can be perceived as a great move by UAE which may affect the citizens’ everyday life, but it will be rewarding in the long run for the country.