VAT

Business setup process
Standard for business
Auditing - People process technology
Auditing - People process technology

Is Dubai Tax Free ?

No, Dubai or even the entire UAE is not a tax free country anymore. The UAE Federal Government does not impose tax on the wealth of the companies and individuals. However, some new taxes in UAE have brought into existence; they are – Value Added Tax and Excise Tax.

What is Value Added Tax?

Value Added Tax (or VAT) is a type of indirect tax applied on all kinds of commodities and services in the UAE. VAT also known as consumption tax and is charged throughout the supply chain.

Why UAE implemented VAT?

UAE implemented VAT to generate more revenue for the government. Using this revenue, the Government plans to offer various types of public services, including medical facilities, good roads, transportation facilities, public schools, parks, waste control, and more. VAT will also provide a new source of non-oil revenue for the Emirates.

RATES OF VAT:

  1. Standard rate – It refers to a taxable supply whereby VAT is charged at the country’s standard rate, in the case of the KSA and the UAE the standard rate is 5%.
  2. Zero rate – The list of supplies where the VAT rate is zero and hence no VAT is charged.
  3. Exempt Supplies – The list of supplies on which VAT is not charged by the authorities.

Out-of-Scope – The overseas supplier or a non-registered entity supplies goods or services to an overseas person, these supplies will be considered out-of-scope for VAT in the UAE.