Those with annual turnover of more than Dh375,000 are mandated to register
By Cleofe Maceda, Senior Web Reporter
Dubai: Businesses in the UAE that barely make money every year - be they a streetside eatery, a shawarma vendor or a barber shop - may not need to go through the tedious process of registering for the value-added tax.Those that offer services or sell goods that are non-taxable will also not need to get bothered by the extensive paperwork and reporting that the new tax system will require.
The Ministry of Finance issued an announcement on Tuesday that effectively sets Dh375,000 as the minimum annual turnover requirement for companies that are required to register for value-added tax (VAT) which will be implemented in the UAE on January 1st 2018.
“Businesses with taxable suppliers over Dh375,000 will be required to register for VAT,” the announcement on Twitter reads. Those with net sales “below Dh375,000 but over Dh187,500,” will have the option to register starting October this year.
The ministry had earlier said that not all businesses, especially small companies, will need to register for the new tax policy. “In simple terms, only businesses that meet a certain minimum annual turnover requirement will have to register for VAT,” it said.
“We have made this decision to safeguard small businesses from the extensive documentation and reporting that a system like VAT requires.”
Starting next year, a 5 per cent levy will be charged on all supplies of goods and services, unless specifically exempted or zero-rated, in the UAE. The levy will be implemented across the Gulf Cooperation Council (GCC) region, with some states given an option to join in on January 1st 2019.
The ministry had earlier announced the start of its country-wide awareness campaign to educate various stakeholders on the collection of VAT. A VAT law has yet to be enacted, but the Federal National Council on Wednesday passed a draft legislation, the Tax Procedure Bill, that will pave the way for the collection of taxes.
Several briefings for entrepreneurs – from small and medium-sized enterprises (SMEs) to huge multinational organisations – will be held on different dates between April and May this year.The sessions will explain to companies the rules of the new VAT system and cover the general application of the new VAT rules.
© Gulf News 2017
