What is VAT and how to register?

Posted by David Lu on December 10th, 2019

What is VAT?

It is a Value Added Tax or VAT is a tax that is imposed on the utilization of services and products on the sale.  It is an indirect tax and used in more than 180 countries around the world. Due to VAT, inflation is increased and the public bears the expense.

VAT Services in UAE

The VAT implementation in UAE was done on January 1, 2019, at the rate of 5% on all products and services other than food, education, and health care. The VAT provides the good source of income to the UAE government that is utilized to provide high-level public services in the country. The UAE government wants to reduce the dependency on oil and other energy products as a source of income.

VAT Implementation in UAE

The criteria for VAT implementation in UAE are very clear. The VAT is not necessary for the businesses that imports and supplies over AED 187,500 in a year. But the businesses that imports and supplies over AED 375000 must register for the VAT.

VAT Registration in UAE

Businesses who want to register for VAT can visit the FTA website and can get registered. For general inquiries about VAT registration in Dubai, you can contact to CBD Accounting and Tax Consultant and can send an email to info@cbdgcc.com or call on +971-4-2277708.

How is VAT collected?

When the government imposes the VAT on businesses, they collect the amount from the customers and customers bear this tax on the purchasing of taxable items and services in the country. The government takes tax at the rate of 5% on a taxable supply of goods and services at each supply over AED 375000. The visitors in the UAE must also pay the VAT at the sale.

On which businesses does VAT apply?

The VAT applies to the companies or businesses that are operating and managed on UAE mainland and free zones.

To know more about VAT Implementation in Dubai, please visit our website: cbdgcc.com