President issues VAT Decree-Law
A preliminary step to implementing VAT in the UAE as of January 2018, the 5 per cent tax is set to be imposed on the import and supply of goods and services at each stage of production and distribution, including what is deemed to be a supply. “The Federal Decree-Law issued by H.H. Shaikh Khalifa bin Zayed is the bedrock of the UAE’s planned tax system, which was designed to meet the most stringent of standards and best practices,” said Shaikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, UAE Minister of Finance and Chairman of the Federal Tax Authority.
“The Value-Added Tax, which is set to be implemented across all GCC countries over the next two years, will bring a new revenue stream for the national economy and GDP. This, in turn, will ensure consistency in the high quality of government services, to mirror the UAE’s advanced position on several global competitiveness indexes.”
“The new tax system will provide extra support for the Government to implement the vision of the UAE leadership and build a diversified and productive knowledge economy,” Shaikh Hamdan added.
“The newly introduced Value Added Tax that shall be implemented in the GCC depending on the readiness of each member State between 1 January 2018 and 1 January 2019 pertaining to the Common VAT Agreement of the States of the GCC, will have positive results on the economy, far exceeding its 5 per cent rate, given that revenues will be redistributed to development projects that benefit society at large and accelerate progress until the UAE reaches the top of global rankings across all sectors.”
The Decree-Law provides that all supplies of goods and services are subject to VAT at a standard rate of 5 per cent with the exception of specific supplies subject to the zero rate and what is exempted as specified in the Decree-law. Tax imposed shall be the responsibility of a Taxable Person who makes taxable supplies or what is deemed to be a supply or on import.
(Source: Gulfnews Dt 27th August 2017)