Value-Added Tax (VAT) is a consumption tax assessed on the value added to goods and services. In the UAE, the standard rate of VAT is 5%.
What?
Who?
- Businesses must register for VAT if their annual VAT taxable turnover exceeds the mandatory registration threshold of AED 375,000.
- A voluntary registration for VAT will be possible if the turnover is below the mandatory registration threshold but exceeds the amount of AED 187,500.
When?
In effect since Jan 1, 2018
- Businesses with an annual turnover exceeding AED 150 million should apply for registration by 31 October 2017
- Businesses with an annual turnover exceeding AED 10 million should apply for registration by 30 November 2017
- All other business entities with an annual turnover exceeding the mandatory registration threshold (AED 375,000) should apply for registration by 4 December 2017
How?
VAT is not simply a finance problem – it affects the entire business across the board and proactive steps at various stages including ensuring that the POS, the accounting software are VAT compliant & the team at all touchpoints is trained to ensure smooth running & avoiding hefty fines.