Understanding VAT (Value Added Tax) In The UAE - PowerPoint PPT Presentation

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Understanding VAT (Value Added Tax) In The UAE

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Value Added Tax, or VAT, is a tax that’s levied on consumption or use of goods and services. In other words, it’s a consumption based tax. VAT is charged at every stage in the supply chain — right from the production to the final purchase. – PowerPoint PPT presentation

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Title: Understanding VAT (Value Added Tax) In The UAE


1
Understanding VAT (Value Added Tax) In The UAE
2
What is VAT?
  • Value Added Tax, or VAT, is a tax thats levied
    on consumption or use of goods and services. In
    other words, its a consumption based tax.
  • VAT is charged at every stage in the supply chain
    right from the production to the final
    purchase.
  • VAT is a form of indirect tax and is used in more
    than 180 countries around the world. All OECD
    countries except for the US have VAT (or a
    variation).

3
how VAT works throughout a supply chain
  • VAT is levied at each stage in the chain of
    production and distribution and is collected by
    businesses on behalf of the VAT authorities. VAT
    is ultimately paid by the end consumer.

4
VAT rates and exceptions
  • The Federal Tax Authority (FTA) has placed a
    fixed VAT rate of 5 on goods and services in the
    UAE.

5
VAT rates and exceptions Zero-rated supplies
  • The following supplies fall under the 0 VAT
    category
  • Exports
  • International passenger transport
  • Transport of international goods, for instance
    containers and vessels
  • Rescue aircrafts or sea vessels
  • Certain medicines and healthcare devices
  • Certain education services
  • Visa charges
  • First sale/rent of residential buildings
  • Certain precious metals considered as investment

6
VAT rates and exceptions Exempt supplies
  • Exempt supplies are those goods and services that
    are totally exempted from VAT. The following
    supplies fall under this category
  • Goods in designated free zones and financial free
    zones
  • Local passenger transport
  • Financial services including life insurance and
    reinsurance of life insurance
  • Salaries and bonus of employees
  • Bare land
  • Residential buildings (except for those that are
    zero-rated)

7
VAT registration in The UAE
  • A business should register for VAT is broadly
    based on the value of their taxable supplies. The
    classification is as follows
  • Mandatory registration
  • Voluntary registration
  • Non-resident registration

8
Mandatory registration
  • A supplier must register for VAT if the total
    value of its taxable supplies (which includes
    zero-rated supplies) and imports within The UAE
    surpasses AED 375,000 in a 12-month period, or is
    expected tosurpass AED 375,000 in the next 30
    days.

9
Voluntary registration
  • A supplier can also voluntarily register for VAT
    if its total taxable turnover (including
    zero-rated supplies and imports within the UAE)
    exceeds AED 187,500, either during the last 12
    months or is expected to exceed AED 187,500 in
    the next 30 days.

10
Non-resident registration
  • If a non-resident supplier or business entity
    makes taxable supplies within the UAE, it needs
    to register for VAT and file tax returns with the
    FTA.

11
Vat Consultancy Services
  • Its vital for businesses to understand
    VAT-related rules and regulations to stay
    compliant and steer clear of any legal problems.
  • To make this easy and affordable, Manage My VAT
    provides comprehensive VAT Services in The
    UAE taking care of everything, from UAE VAT
    consultation and registration to filing and
    refunds in few simple steps. 

12
Sign up Today to keep your business VAT-ready
with ManageMyVat.com.
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