The Value Added Tax, or VAT, is a general, broadly based consumption tax assessed on the value added to goods and services. VAT is consumption tax because it is borne ultimately by the final consumer. It is not a charge on businesses. Unified Agreement for VAT– provides a framework for all of the GCC members to follow. In order to do so successfully and create a tax system which works, the need for businesses to invest time and effort in preparing their processes, structures, systems and people will only increase. UAE decided to implement VAT likely w.e.f. 1st January 2018. The Federal Tax Authority will open online registration for tax purposes for businesses in mid-September 2017.
The Excise Tax and VAT laws are expected to be issued during the third quarter of this year and the regulations concerning both laws in addition to federal tax procedures are expected to be issued during the fourth quarter of 2017.