UAE VAT Executive Regulation

The UAE released the Executive Regulation for the Federal Decree-Law No. (8) of 2017 on Value Added Tax (VAT) today. The Regulation defines VAT as the 5% tax imposed on the import and supply of goods and services at each stage of production and distribution, including what is a deemed supply, with the exception of specific supplies subject to the zero rate and what is exempted as specified in the Decree-Law.

The copy of the Executive Regulations can be viewed here.

It is of significance that the VAT Executive Regulations confirm that companies and businesses within the VAT threshold continue to be required to register in keeping with the timelines previously announced by the Federal Tax Authority. VAT registration for all size of business is required if taxable supplies and imports exceed the mandatory registration threshold of AED 375,000.  

Consequently, if you are liable to register for VAT but have not yet done so in accordance with the deadlines set for your size of business, you may be heading toward a penalty for late registration of AED 20,000. Now is the time to take positive action to ensure you fully understand the impact of VAT, have systems and processes which ensure compliance and make sure you have correctly registered.

If you have any questions on the above or require any assistance with VAT implementation, please do not hesitate to contact our VAT team.