UAE Vat Implementation from 1st January 2018. All businesses in the UAE, whose taxable supplies and imports of goods and services exceed Dh375,000 over the past 12 months, have to expedite the registration process for value added tax (VAT) to meet the January 1, 2018 deadline and avoid the risk of incurring penalties, the Federal Tax Authority (FTA) said on Wednesday.
The FTA’s circular, reminding businesses of the administrative penalty of Dh20,000, as well as additional penalties related to late payment of tax, comes in the wake of the issuance of the VAT Executive Regulation on Tuesday. His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, signed the eagerly-awaited regulation, marking a new milestone in the application of an efficient taxation system in line with best international standards.
The FTA circular, which clarifies the registration procedure for VAT, also seeks to remove doubts about the on-time implementation of the landmark tax reform, which is expected to propel the UAE into the next trajectory of growth.
The five per cent VAT is a consumer-based tax on the supply of both goods and services, and is designed so that only the ultimate consumer bears the burden. With the exception of exempt and zero-rated supplies of goods and services, VAT will be payable on consumer goods and services by everyone and, as such.