Learn everything about VAT in UAE

Value-added Tax, commonly known as VAT, is a tax imposed on any item. It is a consumption-based tax that is charged on every purchase as compared to the income tax that levies more taxes on the wealthy. All over the globe, the VAT system is being followed in more than 160 countries including the UAE. The UAE government introduced the VAT in January 201t with a 5% VAT rate implied on the supplied goods and services. There are many Top VAT Service providers in Dubai, like Akai Group, that serve their clients with VAT registration and other matters about it. In this post, we have gathered some basic and important information about the value-added tax in UAE to educate our customers.

VAT Registration

The UAE government introduced the value-added tax in January 2018 and ever since then, the tax system is implemented and followed in its true letter and spirit. There are two categories of the VAT in UAE; Voluntary VAT registration – If the taxable turnover of any business exceeds AED 187,500, it can opt for voluntary registration. Those below the range of AED 187,500 need not register for VAT. Mandatory VAT registration – If the taxable turnover of any business exceeds AED 375,000, it is mandatory to go for VAT registration.

VAT levied goods/Products

As per UAE laws, the following product and services are eligible for VAT levy;

  • Food and beverages
  • Jewelry
  • Non-essential consumer items
  • Stationery
  • School Uniforms
  • Cars
  • Oil and Gas
  • Smartphones
  • Used goods
  • Electronics
  • Plastic
  • Cosmetic
  • Vehicles
  • Hotel and restaurants
  • Catering Services
  • Higher Educational Services
  • Fee-based financial services
  • Imported products
  • Health products
  • Property insurance
  • Reinsurance
  • Water
  • Etc.
The procedure of Tax return filing

As per law, the VAT-registered business is to file a VAT return every quarter. The concerned authority may ask the business to return the file every month to reduce the risk of tax evasion in certain cases. The businesses are to file their VAT return along with complete information online using the FTA portal according to the VAT Return Format issued by the UAE VAT Executive Regulations. The return process is quite easy and can be handled within minutes however the key lies in submitting the correct and verified information. It is recommended to business owners in UAE to pay extra attention to submitting correct information and numbers in their VAT return to avoid confusion, delays, and consequent penalties.

At Akai group we are among the Top VAT Services in Dubai that offer their expertise in registering businesses for VAT, compiling the VAT information, and finishing the VAT return process in a timely fashion. We perfectly understand the diligence and importance of the accuracy of data while submitting the VAT returns. If you are interested to know more about VAT registration, exemptions, and returns in UAE, feel free to reach out to us.

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