Introduction of VAT in UAE

  • VAT will be implemented in UAE from 1st January 2018
  • Vat will be governed by Federal tax Authority
  • Executive regulation yet to be published

Key Definitions

  • Vat is an Indirect Tax
  • VAT is not tax on profits
  • Applied on the consumption of Taxable Goods and Services
  • Levied at the each stage of supply chain
  • Ultimately Incurred and paid by End consumer
  • VAT – A tax imposed on the import and supply of Goods and Services at each stage of production and distribution, including the Deemed Supply.
  • Goods: Physical property that can be supplied including real estate, water, and all forms of energy as specified in the Executive Regulation of this Decree-Law.
  • Services: Anything that can be supplied other than Goods.
  • Import: The arrival of Goods from abroad into the State or receipt of Services from outside the State.
  • Export: Goods departing the State or the provision of Services to a Person whose Place of Establishment or Fixed Establishment is outside the State.
  • Taxable Person: Any Person registered or obligated to register for Tax purposes under this Decree-Law
  • Person: A natural or legal person.
  • Tax Registration Number (TRN): A unique number issued by the Authority for each Person registered for Tax purposes.

  • Consideration: All that is received or expected to be received for the supply of Goods or Services, whether in money or other acceptable forms of payment.
  • Place of Establishment: The place where a Business is legally established in a country pursuant to the decision of its establishment, or in which significant management decisions are taken and central management functions are conducted.
  • Fixed Establishment: Any fixed place of business, other than the Place of Establishment, in which the Person conducts his business regularly or permanently and where sufficient human and technology resources exist to enable the Person to supply or acquire Goods or Services, including the Person’s branches.
  • Place of Residence: The place where a Person has a Place of Establishment or Fixed Establishment, in accordance with the provisions of this Decree-Law.
  • Related Parties: Two or more Persons who not separated on the economic, financial or regulatory level, where one can control the others either by Law, or through the acquisition of shares or voting rights.

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