- November 9, 2016
- Posted by: admin
- Category: VAT in UAE
Value Added Tax- A future reality in UAE
Value Added Tax (VAT) was introduced for the first time in France in 1954 and today more than 160 countries have accepted and implemented the same or similar type of general consumption tax. With the declaration of implementation of Value Added Tax regime by Gulf Cooperation Council (GCC) from January 1, 2018, or by January 1, 2019, UAE and other GCC members becomes a recent cluster of countries to join this league.
With acceptance of VAT system, whole new ambit of Indirect Taxation is going to be emerged in UAE, In this scenario let’s discuss VAT system in detail
What is Value Added Tax?
Value Added Tax (VAT) is an indirect tax on consumption and it applies to most of the goods and services. VAT is levied on business transactions, i.e. on goods and services supplied in the normal course of business.
Generally, VAT applies to most of the goods and services but there are some exceptions too. While VAT is levied and paid by producers to the authorities, the actual tax is collected from customers or end users who purchase these.