Why is the computation of VAT important for businesses?
Value Added Tax (VAT) is a consumption tax levied on goods and services (5% at the point of sale). Federal Decree-Law No. 8 of 2017 introduced VAT in UAE. VAT Registration in UAE came into effect on January 1, 2018, and it has changed the taxation procedure for businesses. The law and supporting regulations mention the various products and services and the applicable VAT rates. The VAT rates in UAE may differ; details are as below:
- Between 0% to 5%
- Some products/services are VAT exempt
- Few products do not fall within VAT’s scope