Executive Regulation on VAT Announced

The UAE Ministry of Finance has recently announced the Executive Regulation for the Federal Decree-Law No. (8) of 2017 on Value Added Tax.

According to the Regulation, VAT on the import and supply of goods and services at each stage of production and distribution will be introduced at a rate of 5% effective January 1, 2018. The document outlines key details on how the VAT law will be applied, including requirements for registration, exempt goods and services (including those subject to the zero rate), and the VAT treatment of UAE businesses operating in Free Zones.

Online registration for Value-Added Tax is now open through the UAE’s Federal Tax Authority’s website ahead of the implementation date.

Do I need to register for VAT?

If your company’s annual turnover exceeds AED 375,000, you are required to register under UAE VAT before the end of the year 2017. Businesses with taxable supplies worth between AED 187,500 and 375,000 can register voluntarily, while businesses with a turnover of up to AED 187,500 do not need to be registered under this law.

If you are liable to register for VAT but have not yet done so, it is now time to take positive action as late registration will attract a penalty of AED 20,000. Moreover, you are strongly advised to make sure your business is ready for and fully compliant with Value Added Tax legislation including people, processes, controls, and technology.

Become VAT-compliant hassle-free

In the past 20 years, First BIT’s solutions and experts have helped 150,000+ businesses worldwide comply with local VAT requirements. FirstBIT can help you tackle the looming changes in the most efficient way by allowing you to automate your accounting workflow and ensure the implementation of VAT runs smoothly and stress-free in your company.

• Effortlessly calculate VAT based on incoming and outgoing invoices, import and export transactions, prepayments, returns, and adjustments
• File your quarterly VAT returns on time.
• Sign, collect and process your invoices in a convenient way avoiding expensive tax penalties.
• Maintain other accounting operations. Submit your financial statements, including your balance sheet, profit and loss accounts, salaries and wages paid to employees, and fixed asset records, to the FTA.

Learn how a VAT-ready accounting software can help you confidently face the UAE’s VAT regulations.

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