Wednesday, November 22, 2017
Federal Tax Authority: 35 Business Days Left To Register For VAT
11-08-2017
Value Added Tax is set to go into effect on January 1, 2018.

A 5% tax will be imposed on the import and supply of goods and services at each stage of production and distribution, and on deemed Supply.

Businesses can register for VAT through the FTA website 24 hours a day, seven days a week. The registration process is seamless and simple, taking no more than 20 minutes

VAT will provide additional financial resources for the Government to continue investing in the necessary infrastructure for a future-ready economy.

The countdown for implementing Value Added Tax in the UAE has already begun, reaffirmed the Federal Tax Authority (FTA) in a press conference held in Dubai today (Wednesday, November 8, 2017).

Value Added Tax (VAT) is set to go into effect across the UAE on January 1, 2018, with a standard rate of 5% on the import and supply of goods and services at each stage of production and distribution, as well as on deemed supply. This leaves less than 53 days – or 35 business days – before it affects all purchases of goods and services, except in some cases where zero-rate or exemptions are applicable, as stipulated in Federal Decree-Law No. (8) of 2017 on Value Added Tax, issued by His Highness Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE, as well as in the Executive Regulation of said Federal Decree-Law recently adopted by the Cabinet.

The new tax provides additional sources of income for the Government to continue investing in the necessary infrastructure for a future-ready economy. VAT will also allow the Government to carry on with developing and providing high-quality services, all the while reducing its dependence on oil and building an innovation-based knowledge economy and a happy society.

FTA Director-General His Excellency Khalid Ali Al Bustani said: "We are meeting here today to reaffirm that the countdown to full VAT implementation in the UAE, which is only 53 days away, has already begun. This means that businesses now have only 35 business days to complete their registration, ensure their financial and technical compliance with the tax system and avoid late registration fines."

" The Federal Tax Authority is tasked with providing an outstanding tax system that adheres to international best practices," he continued. "With that in mind, we have allowed businesses considerable time to fulfil their registration requirements, with free registration through our website 24 hours a day, seven days a week, as well as extensive awareness campaigns. The registration process is seamless and simple, taking no more than 20 minutes."

H.E. Al Bustani added: "The cooperation from the business sector has been commendable, as businesses and institutions took advantage to meet their tax obligations and ensure full and perfect compliance with the VAT system. With the countdown to the introduction of the tax system, we call on businesses to expedite their registration and compliance procedures. They must make changes to their core operations, their financial management procedures, their accounting methods, and the technical means they use, in addition to changes in their human resources, including accountants and tax advisers."

A business will be required to register if the total value of its taxable supplies made within the UAE exceeds the mandatory registration threshold of AED375,000 over the previous 12-month period. A business may choose to register for VAT voluntarily if their supplies and imports are below the mandatory registration threshold, but exceed the voluntary registration threshold of AED187,500.

How to register a business for VAT

Tax registration can be done through the Federal Tax Authority's website, available 24 hours a day, 7 days a week. The website also provides guidance on how to complete various transactions seamlessly.

The Federal Tax Authority urged all businesses to seek to understand the implications of implementing the VAT regime, familiarise themselves with the relevant legislation that has been issued, and make every effort to align their work with the reporting and compliance requirements imposed by the Government.

For more details and registration requirements for VAT, please visit the Federal Tax Authority website: www.tax.gov.ae

 


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