16 March 2017

By Yasmine Saleh

The President of the United Arab Emirates (UAE), Sheikh Khalifa bin Zayed Al Nahyan, is expected to issue a law to introduce value-added tax (VAT) on goods and services in the country within the next four months, paving the way for the implementation of the new tax from January 1, 2018, a source familiar with the procedures told Zawya on Thursday.

The six members of the Gulf Cooperation Council (GCC), which includes the UAE, 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 starting mid-2014.

The UAE’s Federal National Council (FNC) approved a draft law regarding the introduction of taxation procedures at a meeting on Wednesday.

The new legislation will need final approval from Sheikh Khalifa and a source familiar with the VAT talks told Zawya on Thursday the president “will issue the (VAT) law from two to four months.”

Younis Al Khouri, under-secretary at the finance ministry told Zawya in an interview last month 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. (Read more here)


The UAE finance ministry announced on Wednesday it will start running a series of workshops starting this month to educate the business community on the management of the VAT system.

The ministry said on its website and Twitter account that the first phase of the awareness sessions would cover VAT and excise tax implementation. (Read more here)

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.

The source had earlier told Zawya that the companies will be allowed to register as of “the beginning of the fourth quarter or maybe the end of the third one”.

A recent survey by consultancy EY of 500 participants representing businesses operating in the GCC showed that half of those surveyed have not yet started preparations for VAT, while 29 percent have studied some of the new VAT provisions. (Read more here)

Click here for Zawya’s Special Coverage on the introduction of VAT in the GCC.

(Additional reporting by Reem Wafai and Megha Merani)

© Zawya 2017