What is VAT?

Value-Added Tax (VAT) is a tax on the consumption or use of goods and services levied at the point of sale. VAT is a form of indirect tax and is used in more than 180 countries around the world. All OECD countries except for the US have VAT (or a variation). While it feels exactly the same as a general sales tax to end-consumers, VAT is a more sophisticated tax and overcomes many challenges that affect the general sales tax.

VAT is charged at each step of the ‘supply chain’. End consumers generally bear the VAT cost while registered businesses collect and account for the tax, in a way acting as a tax collector on behalf of the Federal Tax Authority. Only VAT registered businesses will need to charge and account for VAT.

Our professional team can review your status and compliance obligations for VAT. Please note, failure to register your business when you meet minimum requirements will result in government fines.

Why has the UAE implemented VAT?

The UAE needs to coordinate VAT implementation with other GCC countries as part of the ‘The Economic Agreement between the GCC States’ and ‘The GCC Customs Union’. The GCC has always worked together in designing and implementing new public policies with a collaborative approach which is best for the collective development of the region.

Unsure if you need to register your business for VAT?

Please complete our short survey to determine if you do. We will respond in 24 hours. Please note a review of your financial will require close scrutiny and therefore longer.
Alternatively, visit our extensive FAQ’s library to answer any additional questions you might have regarding VAT.