Value Added Tax(VAT) is launched in UAE in the recent days for various sectors of UAE. So far UAE government provide numerous services not only for the citizens but also for different nationality residents in each sector like Public transportation, Hospitals etc. Since UAE start the rule of VAT for business people and the commercial things in the country will help to generate an additional income that could help to support government budget for these services.
UAE government collect tax from business and trading people in the country based on their income annually and the VAT charges. For commercial things for the buyers is allocated as 5 percentage on standard basis from January 1st, 2018. Process that a business enterprise should do is maintain each financial transaction. Businesses who thinks to not register VAT then need to carefully take care of every financial transaction which may be monitored by the government to ask for tax in future. An online portal will be maintained by the government for regular submission of VAT information like how much they have charged and what they are paying in a formal manner.Government applies 0% tax for the sectors:
• International business for transportation
• Exporting of goods and services are not charged
• Sectors that supply educational services (also…, goods and services)
• Sectors that supply health care services (also…goods and services)
All the businesses in UAE must follow VAT registration guidelines by December of 2017. There will be huge risk and rush happens in the beginning of 2018 for registration is planned to initiate a month before. Business owners with their annual turnover more than Dh 3,75000 is mandatory to do registration.
Federal Tax Authority (FTA) of UAE has urged the registration of VAT for the companies who crosses annual turnover above 150 million dirhams by October 2017.Same as that businesses crossing 10 million Dirhams are also supposed to registered by November 2017.
Above information helps you in the understanding of how and for what VAT is implemented in the country. Basic things that we should take care on and after the timing of VAT registration is discussed in the above information.