The below question and answer section gives a brief overview that provides a practical guidance on VAT and explains how it applies:
1. General Questions & Answers
1.1 When will VAT be implemented and what will be the rates?
VAT will come into effect across the UAE on 1 January 2018. A standard rate of 5% will be applied.
1.3 Will VAT be applicable to all products and services?
VAT is a consumption-based tax; therefore, it will be applied to most of the transactions of goods and services except those that are exempt by law.
1.2 How will the government collect VAT?
It is an accountability of the companies to document thoroughly their business revenue and expenses along with associated VAT charges. A prevailing VAT rate will be applied by registered businesses and traders to all of their customers to bear the VAT costs of goods and services bought from suppliers. The difference between these figures can be reclaimed or paid to the government.