UAE VAT Law; Structure
VAT Consultancy in UAE, Saudi Arabia, GCC
It doesn’t take so long to read and understand the newly promulgated UAE VAT Law AKA Federal Decree-Law No. 8 of 2017 on Value Added Tax. It also seems to be incomplete as a very vital component auxiliary regulations are still to make to the surface, the “Executive Regulation”. The VAT Law speaks about the Executive Regulation as under: -
It doesn’t take so long to read and understand the newly promulgated UAE VAT Law AKA Federal Decree-Law No. 8 of 2017 on Value Added Tax. It also seems to be incomplete as a very vital component auxiliary regulations are still to make to the surface, the “Executive Regulation”. The VAT Law speaks about the Executive Regulation as under: -
Article 82 Executive Regulation
The Cabinet shall issue the Executive Regulation of this Decree-Law at the suggestion of the Minister.
The VAT law
is divided in to 8 titles in total each discusses and defines relevant previsions on Value
Added Tax.
Title One: Definitions
Contains key
definitions and basic understanding of the law.
Title Two: Tax Scope and Rate
Defines the
scope of VAT and rate at 5%, whereas Title Six (6) deals with Zero Rated and
Exemptions
Title Three: Supply, Supply of Goods and
Services
Definition
of supply of goods and services is explained. The most important is the Supply
by Agency, it has a huge impact on whether the supply is made in the name of
the principal or is made in Agent’s name.
Title Four: Tax Registration and
Deregistration
Here
explained the procedure, Fundamental pillar of all the VAT Exercise is the
Registration as De-registrations will not be very often. Like Mandatory,
voluntary registration and most importantly the registration of “Tax Group”.
Title Five: Rules Pertaining to Supplies
VAT is where
the supplies are so the Date, place and value of Supply. A crucial part of VAT
law.
Title Six: Zero Rates and Exemptions
This title
draws a thick line between the Zero rated and Exempt supplies in detail.
Title Seven: Calculation of Due Tax
Deals with
very delicate matters of Due Tax for a Tax Period “tax calculation”,
adjustments and Recovery therein.
Title Eight: Tax Period, Tax Returns,
Payment and Reclaiming of Tax
This title
is all about tax period, tax compliance & resultant payments, tax refund
(claim), recovery of tax, violations and penalties.
Article 82
Explained
As per
article 82 of the VAT Law the UAE cabinet shall issue Executive Regulation
giving answers to questions raised in Law like Scope of Imported goods, supply
of goods & services, time limit for tax registration, rules for Tax Group,
clarifications on Zero Rated and exempted supplies, recovery, calculation, input
tax adjustment, tax refund, tax claim, capital assets scheme, conditions for
issuing invoices, rounding of tax invoices, tax credit note, tax period
duration, tax returns and payment, record keeping timeline and a lot of
petty-nature regulations.
Article 82 Executive Regulation
The Cabinet shall issue the Executive Regulation of this Decree-Law at the suggestion of the Minister.
Article (68) Rounding on Tax Invoices
For the
purpose of stating the Tax due on a Tax Invoice, the Executive Regulation of
this Decree-Law shall specify the method of calculation and stating the total
amount to be paid if the Tax is less than one fils of a UAE Dirham.
HOW WE CAN HELP
Our Indirect Tax Team of experts is available in GCC Region to discuss and bring clarity to the specific challenges that your businesses might face in getting yourself ready for VAT. Please contact our indirect tax executives to learn more.
LinkedIn: Waheed Ensari
VAT Consultancy Services
VAT Advisory and Consultancy services are available for GCC (Gulf Cooperation Council) Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates
VAT Registration Countdown begins | Hurry Up and Get Registered
ReplyDeleteGetting registered for VAT in Dubai is priority number 1 for every organization, with a minimum turnover of AED 375,000 and above, for VAT registration VAT in Dubai with the Federal Tax Authority on the website www.tax.gov.ae. After registration for VAT, the tax Registration Number will be issued by Federal Tax Authority.
http://www.thebscon.com/how-to-register-for-vat-in-dubai/