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01 August 2017
(Updated to state the decree has now been issued on the Ministry of finance's website)
The president of the United Arab Emirates (UAE) has approved a new tax procedures law, a source with knowledge of the matter told Zawya on Monday, paving the way for the implementation of a new value-added tax (VAT) on an array of goods and services from January 2018.
The six members of the Gulf Cooperation Council (GCC), which includes the UAE, Saudi Arabia, Bahrain, Qatar, Kuwait and Oman, agreed in 2016 to introduce VAT as a means to diversify government revenue sources and reduce reliance on crude oil exports after oil prices took a sharp drop in mid-2014.
Each country was required to introduce a tax procedures law to regulate the process of collecting taxes and a regulatory framework for any new tax, including VAT.
The new decree was officially published on the finance ministry's website on Tuesday afternoon.
"The Law, issued by H.H. Sheikh Khalifa bin Zayed Al Nahyan, is an all-encompassing legislative framework that lays the groundwork for the UAE’s plan to implement taxes as a means to ensure sustainability and diversify the government’s revenue streams," Sheikh Hamdan bin Rashid Al Maktoum, deputy ruler of Dubai, Minister of Finance and chairman of the Federal Tax Authority, was quoted as saying in a press statement on the ministry's website.
"The increased resources will enable the Government to maintain the momentum of its development and infrastructure for a better future," he added.
Younis Al Khouri, under-secretary at the finance ministry told Zawya in an interview earlier this year that a 5 percent VAT is expected to be implemented simultaneously across the GCC starting January 1, 2018. He said VAT would apply to companies with annual revenues exceeding $100,000 and anticipated a compliance rate of around 95 percent for companies in the UAE in the initial stage.
The source said a regulatory framework for the new VAT will follow and is expected to be released in the coming months.
The UAE finance ministry in March launched a series of workshops to educate the business community on the management of the VAT system.
According to the ministry website, businesses that meet the requirement criteria will be able to start registering for VAT three months before the new tax is launched.
Click here for Zawya’s special coverage on the introduction of VAT in the GCC
© Zawya 2017
(Updated to state the decree has now been issued on the Ministry of finance's website)
The president of the United Arab Emirates (UAE) has approved a new tax procedures law, a source with knowledge of the matter told Zawya on Monday, paving the way for the implementation of a new value-added tax (VAT) on an array of goods and services from January 2018.
The six members of the Gulf Cooperation Council (GCC), which includes the UAE, Saudi Arabia, Bahrain, Qatar, Kuwait and Oman, agreed in 2016 to introduce VAT as a means to diversify government revenue sources and reduce reliance on crude oil exports after oil prices took a sharp drop in mid-2014.
Each country was required to introduce a tax procedures law to regulate the process of collecting taxes and a regulatory framework for any new tax, including VAT.
The new decree was officially published on the finance ministry's website on Tuesday afternoon.
"The Law, issued by H.H. Sheikh Khalifa bin Zayed Al Nahyan, is an all-encompassing legislative framework that lays the groundwork for the UAE’s plan to implement taxes as a means to ensure sustainability and diversify the government’s revenue streams," Sheikh Hamdan bin Rashid Al Maktoum, deputy ruler of Dubai, Minister of Finance and chairman of the Federal Tax Authority, was quoted as saying in a press statement on the ministry's website.
"The increased resources will enable the Government to maintain the momentum of its development and infrastructure for a better future," he added.
Younis Al Khouri, under-secretary at the finance ministry told Zawya in an interview earlier this year that a 5 percent VAT is expected to be implemented simultaneously across the GCC starting January 1, 2018. He said VAT would apply to companies with annual revenues exceeding $100,000 and anticipated a compliance rate of around 95 percent for companies in the UAE in the initial stage.
The source said a regulatory framework for the new VAT will follow and is expected to be released in the coming months.
The UAE finance ministry in March launched a series of workshops to educate the business community on the management of the VAT system.
According to the ministry website, businesses that meet the requirement criteria will be able to start registering for VAT three months before the new tax is launched.
Click here for Zawya’s special coverage on the introduction of VAT in the GCC
© Zawya 2017
