President His Highness Sheikh Khalifa bin Zayed Al Nahyan issued the Federal Decree-Law No. 8 of 2017 for Value-Added Tax (VAT) as part of a GCC-wide agreement to be implemented over the next two years, Emirates News Agency, (WAM) reported on Sunday August 27.
A five percent tax will be imposed on the import and supply of goods and services at each stage of production and distribution and will be implement in the UAE starting January of next year.
“The Value-Added Tax, which is set to be implemented across all GCC countries over the next two years, will bring a new revenue stream for the national economy and GDP. This, in turn, will ensure consistency in the high quality of government services, to mirror the UAE’s advanced position on several global competitiveness indexes,” said H.H. Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, UAE Minister of Finance and Chairman of the Federal Tax Authority.
The decree also outlined the good and services that will be subject to 0% rate under the new VAT law:
1. Local passenger transport and international transportation of passengers or goods including a transfer starting,ending, passing through the UAE
2. Goods and services are being exported to outside a VAT-implementing GCC state
3. Residential buildings within (3) years of its completion, either through sale or lease in whole or in part
4. Supply or import of investment-precious metals
5. Educational services for nurseries, preschool, elementary education, as well as higher educational institutions owned or funded by the Federal or local government
6. Preventive and basic healthcare services
7. Certain financial services
The Federal Tax Authority (FTA) has launched a website to inform consumers and businesses about the new excise tax and VAT law in the UAE.
Federal Decree-Law No. (8) of 2017 for Value-Added Tax (VAT) is available in full on: www.mof.gov.ae and www.tax.gov.ae.
Credit: Emirates News Agency (WAM)
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