The recent implication of VAT in the UAE, along with other Gulf countries, have raised enormous questions in the minds of individuals living here. Not only this, but it has also given chills to businesses who are struggling to strengthen their roots in the corporate hub like Dubai.
Owing to the stated fact, lots of business owners are rushing towards the best VAT consultancy in Dubai to get immediate assistance for sailing through the process of VAT. These agencies are helping organizations and individuals to ace through the process of VAT effectively.
But firstly, you need to be clear on so many confusions relating to VAT that this article intends to address.
The VAT was implemented by the GCC council at the beginning of 2018 and had a rate of 5%. This article aims to answer all the frequently asked queries regarding VAT, comprehensively. So, let’s start answering.
VAT stands for Value added tax and is another source of generating revenues for governments that come under the Gulf cooperation council (GCC). The VAT is quite new for the business owners of the UAE and other Gulf states.
According to a rough estimation, it was depicted the UAE will generate around Dh12 billion additional revenue in the first year of its implication.
This is quite a significant question that may ease-off the situation for many residents of the UAE. The country remains tax-free in various ways, even after the implication of VAT. It is still a treat to say that there is no income tax on the personal salaries of individuals.
There are free zones in the country that exempts foreign ownership from not paying tax at all; providing them with a high entry rate. Not only this, but the government also aims to exempt many other supplies to ensure that the impact of the VAT isn’t drastic.
Essentially, the government introduced it to generate revenue by taxing discretionary spend by consumers while ensuring that the people at the lower end of the spectrum are protected.
Yes! Preparation before time is always a wise approach as you don’t have much time to understand the implications of VAT to make all the changes. How much and what needs to change certainly, depends on the size and scale of your business.
Thus,it is best to consider its impact earlier by opting for VAT consultants and come up with ways to deal with it successfully.
The UAE government imposes VAT laws that companies have to follow with all its terms and conditions in mind. There have been cases when companies weren’t aware of its implication and had to go through courts and penalties for not paying VAT on time.
Hence, to avoid getting into such a situation, you should consult the best VAT consultancies in Dubai and gain in-depth knowledge about VAT implications under which your company falls. Moreover, be informed about VAT registrations and ease the registration process with VAT consultants.
Jessica Loren
Content Writer