The countdown for implementing Value Added Tax in the UAE has begun, with the Federal Tax Authority (FTA) saying companies have 35 business days to register.
VAT is set to go into effect across the UAE on January 1, 2018, with a standard rate of 5 percent on the import and supply of goods and services at each stage of production and distribution, as well as on deemed supply.
The new tax provides additional sources of income for the government to continue investing in the necessary infrastructure for a future-ready economy, a statement said.
It added that VAT will also allow the government to carry on with developing and providing services, while reducing its dependence on oil.
FTA director-general, Khalid Ali Al Bustani, said: “Businesses now have only 35 business days to complete their registration, ensure their financial and technical compliance with the tax system and avoid late registration fines.
“The Federal Tax Authority is tasked with providing an outstanding tax system that adheres to international best practices. With that in mind, we have allowed businesses considerable time to fulfil their registration requirements.”
Al Bustani added: “The cooperation from the business sector has been commendable, as businesses and institutions took advantage to meet their tax obligations and ensure full and perfect compliance with the VAT system.
"With the countdown to the introduction of the tax system, we call on businesses to expedite their registration and compliance procedures.”
A business will be required to register if the total value of its taxable supplies made within the UAE exceeds the mandatory registration threshold of AED375,000 over the previous 12-month period.
A business may choose to register for VAT voluntarily if their supplies and imports are below the mandatory registration threshold, but exceed the voluntary registration threshold of AED187,500.
Tax registration can be done through the Federal Tax Authority’s website, available 24 hours a day, 7 days a week at www.tax.gov.ae
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