THE BASIC FACTS OF VAT IN UAE

• The introduction of Vat in UAE regime will mark a new history in the economy of the UAE, with the burden of budgetary expenditure also be shared by general public.

• The UAE along with Saudi Arabia took the important step of introducing VAT, which will gradually implement in all over GCC.

• VAT is one of the most common types of taxation which has been implemented over 150 countries all over the world. I t is charged at each step of the supply chain.

• Taxation is practice which is accepted globally, for diversifying government revenues.

• The 5% Vat, which has been introduced in UAE, will boost the economy.

• VAT has been categorised into 3 sections: 5% standard rate, zero rated and exempt.

• The difference between zero rated and exempt is that the zero rated services can reclaim the input VAT whereas the exempt services cannot reclaim the input VAT.

• The 5% tax is applicable on necessities such as food and beverages, clothes, shoes, hotel rents etc.

• The tax is exempted on medical fee, airline tickets and other government services.