Value added tax (Vat) In UAE

Vat stands for value added tax was introduce in the UAE on 1^st January 2018.vat is based on the value of goods and services. Vat is also known as goods or services tax. Vat is indirect tax while (GST) general sales tax is direct tax collected only once paid by the consumers. Vat is the consumption tax placed on the products whenever value is added at each stage of the supply chain from the production to the point of sale.

GTS or vat is the major revenue of the state.it is vary from country to country. Vat rate of the UAE is 5%.Tax is the major source of revenue by which a government raise revenue to pay for public services such as amenities education sector, health, defense and infrastructure etc.

Excise Tax

The UAE system is very strong and stern. There is another tax levied by UAE government i.e. Excise tax it is also main source of revenue. This tax has been imposed in 2017.it is indirect tax imposed on such goods that dream to be harmful to the human health and environment.

The excise tax imposed on:

1. Carbonated drinks or beverages at the rate of 100%.

2. Energy Drinks which contain caffeine, taurine, ginseng, guarana.

3. 100% tax is levied on tobacco which is not only harmful to health even to the environment too.

VAT REGISTRATION IN UAE

Vat is mandatory for businesses who exceed the turnover of 375000.companies get vat registration number. They collect vat and file there. Vat return monthly bases or quarterly. A vat registration services are offered by vat consultancy Dubai  www.vat-dubai.com.To ensure that companies who meet the eligibility to have the tax registration number on time.

Vat implementation

Vat is applicable when the turnover exceed the mandatory threshold limit AED 375000.UAE strictly follow the tax system. There are three zone of rate.

Standard Rate zone 5%

The standard rate is 5%.all the business have to pay 5% vat when the turnover exceed the mandatory threshold limit which is about AED 375000.

Zero Rate zone 0%:

UAE levied zero percent rate on the following industries:

1.       Export of goods and services outside the UAE.

2.       International transportation. Sea, air and ground means of transportation such as ships and aircrafts.

3.       Certain investment such as gold sliver of 99% purity.

4.       Newly constructed residential properties that are supplied the first time with three years.

Exempted Zero

1.       supply of financial services

2.       residential properties sale and lease

3.       uncultivated land sale and lease

4.       local transportation