VAT Consultations
Engage directly with our skilled tax specialists for tailored planning, enabling your business to attain effective tax results while maintaining adherence to all VAT responsibilities.
Our team will support you in the process of registering your business for VAT and obtaining either an individual or tax residency certificate from the Federal Tax Authority (FTA).
You know all about the VAT in Dubai, which is a requirement that started in 2018. Remember you don’t want to miss out on your reporting, collecting and remitting obligations under VAT when you’re starting your new business.
Now that you know everything there is to know about VAT in Dubai, you need to consider all the costs of starting a business. Let us help you calculate the cost of starting a business so you can be prepared for anything. Use our business cost calculator today.
If your company has generated revenues below AED 187,500.00, then you are not yet eligible for VAT registration. If your company crosses the mandatory threshold limit, you have 20 working days to submit the application.
Engage directly with our skilled tax specialists for tailored planning, enabling your business to attain effective tax results while maintaining adherence to all VAT responsibilities.
Our team prepares quarterly VAT reports to help you determine if you have VAT payable/refund.
Starting from setting up an online account via the FTA portal to aiding in the preparation and submission of necessary documents in the formats specified by the FTA, our seasoned accountants will walk you through every stage.
Our tax advisors are available to help you obtain an individual or corporate tax residency certificate from the Federal Tax Authority.
Our in-house accountants will help you register your business for VAT with the FTA, offering guidance on eligibility for VAT exemption. Once the registration process is finalized, you’ll receive a Tax Registration Number (TRN) certificate
However, it’s essential to remember that starting from January 1, 2018, Dubai introduced value-added tax (VAT) on most goods and services. This means as a business owner, you’ll need to apply VAT to nearly all goods and services, from restaurant meals to hardware tools. If you’re curious about VAT and want to learn more, you’re in the right place. Keep reading for a detailed guide to VAT in Dubai.
There are numerous incentives for launching a business in Dubai, such as government funding initiatives to spur business expansion and its dynamic economy. However, when you speak with individuals, tax advantages are likely to be their primary consideration.
In the Middle East, there are still no taxes on personal income.
Opting to establish your business in a free zone translates to a 0% corporate tax rate, exemption from customs duties, and the freedom to repatriate 100% of the business profits.
Value-added tax, known as VAT, is a consumption-based tax. Unlike taxes imposed on income, VAT is applicable to the purchase of goods and services. It is added at each stage of the manufacturing and distribution process where value is added to the product.
Typically, customers pay VAT on their purchases. Businesses are responsible for collecting the VAT and submitting it to the government. Failure to comply can result in penalties or legal repercussions.
VAT is the predominant form of consumption tax and is implemented in over 150 countries worldwide, including European Union nations, Canada, and New Zealand.
VAT was introduced to Dubai in 2018 and is applicable to all purchases made online or in traditional stores within the city.
Starting from January 1, 2018, the UAE mandated businesses to register for VAT and to collect and submit the respective amounts to the government. This marked the first implementation of VAT in the Middle East.
The Federal Tax Authority (FTA) was established to oversee and collect federal taxes. VAT was implemented to diversify government revenue streams, supporting the provision of various services such as healthcare, recreational facilities, and waste management. The objective behind introducing VAT was to decrease reliance on income generated from oil.
Typically, customers pay VAT on their purchases. Businesses are responsible for collecting the VAT and submitting it to the government. Failure to comply can result in penalties or legal repercussions.
VAT is the predominant form of consumption tax and is implemented in over 150 countries worldwide, including European Union nations, Canada, and New Zealand.
Starting a business in Dubai entails multiple crucial steps. Ensuring proper business formation from the outset is vital to avoid future complications. Understanding VAT obligations, registering as required, and timely VAT payments are critical.
Ignorance of obligations may lead to hefty penalties, with interest potentially escalating to 300% of unpaid VAT liability. It's imperative to comprehend and fulfill these obligations to safeguard your business's financial health and compliance in Dubai's business landscape.
VAT in Dubai is a flat 5% rate applied to all taxable supplies, including imports. Some services are exempt, so determining if you have a taxable supply is crucial. This includes retail, restaurant food, hotel services, and entertainment activities, making most businesses in Dubai subject to VAT.
Exempt services in VAT differ from zero-rated services, where businesses charge 0% VAT. Four items are completely exempt: financial services, supply of residential property, vacant land, and local public transportation.
Financial services, dealing with money like currency exchange or loans, are generally VAT-exempt when provided with a fee, discount, or commission. Insurance contracts are also exempt.
Supply of residential buildings, not movable structures, is VAT-exempt. Local transportation by land, water, or air is also exempt, including helicopters or airplanes.
If none of your taxable supplies are zero-rated or exempt, a 5% VAT applies. Not all businesses need VAT registration; it’s mandatory only if annual taxable supplies or imports exceed AED 375,000. Optionally, businesses with taxable supplies or imports over AED 187,500 may choose to register for VAT.
Businesses charge VAT to customers and pay VAT on purchases. They can reclaim some paid VAT, termed Input Tax. Subtracting Input Tax from total VAT collected gives net VAT liability.
Recovery is possible for VAT paid on inputs, preventing double taxation. Exempt services are ineligible for VAT recovery.
It’s imperative to register for VAT, overseen by the FTA in Dubai. Firstly, create an e-service account using a valid email. Proceed to register via the FTA portal, providing necessary details and attaching documents. Upon approval, receive a unique Tax Registration Number for portal access.
Monitor taxable supplies diligently to avoid surpassing the registration threshold unknowingly. VAT returns must be filed online with the FTA within 28 days after each tax period, varying based on annual turnover. Businesses with turnovers below AED 150 million file monthly, while those exceeding this threshold file monthly to ensure timely and manageable VAT payments.
Email us at [email protected]
Dubai office: 2303, Al Moosa Tower 2, Sheikh Zayed Road, Dubai
London office: Suit 401-402 Cumberland House, 80 Scrubs Lane, London NW10 6RF
Email us at [email protected]
Dubai office: 2303, Al Moosa Tower 2, Sheikh Zayed Road, Dubai
London office: Suit 401-402 Cumberland House, 80 Scrubs Lane, London NW10 6RF
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