UAE defined VAT as the 5 percent tax imposed on the import and supply of goods and services at each stage of production and distribution.
Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and UAE Minister of Finance, said: “The release of the Executive Regulation on Value Added Tax is a new stage in the implementation of an effective tax system in the UAE – one that measures up to the highest international standards. We extend our hand in partnership to all concerned parties, inviting them to work together for the advancement, progress and prosperity of the UAE.”
The first title of the Regulation includes the definitions of terms used, while the second title deals with supply, which includes articles regulating the supply of goods and services.
The third title of the document tackles the subject of registration, such as mandatory and voluntary registration, related parties, conditions to be met to register tax groups and appointing a representative member, deregistration, exception from registration, registration on law coming into effect and obligations to be met before deregistration.
The fourth title looks into rules relating to supply, including articles on the date of supply, place of supply for goods, place of supply of services for real estate, transport services, telecommunications and electronic services, the market value, prices to be inclusive of tax, discounts, subsidies and vouchers.
Furthermore, title five discusses profit margins and explains how to calculate VAT based on profit margins, while title six addresses zero-rated goods and services, including telecommunications, international transportation of passengers or goods, investment grade precious metals, new and converted residential buildings, as well as healthcare, education and buildings earmarked for charity.
Title seven clarifies provisions relating to products and services exempt from Value Added Tax. The eighth title of the Regulation addresses accounting for tax on specific supplies and includes articles relating to supplies with more than one component, general provisions in relation to import of goods and applying the reverse charge on goods and services, as well as moving goods to implementing states and imports by non-registered persons.
In title nine, the Executive Regulation addresses Designated Zones, while title 10 provides further detail on calculating due tax, recovery of input tax relating to exempt supplies, input tax not recoverable, and special cases for input tax. The following title 11 includes apportioning input tax whereas title 12 addresses the capital asset scheme.
Title 13 of the Regulation includes tax invoices, tax credit notes. Then in title 14, the Executive Regulation discusses Tax Periods and Tax Returns, before title 15 goes into recovery of excess tax. Adding to that, title 16 tackles recovery in other cases.