UAE Releases Executive Regulation On VAT

The United Arab Emirates released Regulations setting out key elements of the rules surrounding value-added tax, which will be implemented from January 1, 2018.

The Executive Regulation for the Federal Decree-Law No. (8) of 2017 on Value Added Tax was unveiled at a Cabinet meeting on November 7, the Government said in a November 11 statement, which explained its provisions.

According to the Ministry of Finance, among other things, the Regulation defines terms used; discusses how to categorize supplies and a taxable event; and discusses mixed supplies and deemed supplies.

The Regulations set out administrative rules, such as the requirement to register and voluntary registration; related parties; conditions to be met to register a tax group and appointing a representative member; deregistration; exceptions from the requirement to register; transitional registration rules; and the rules surrounding reregistration.

The Regulation also looks at how to determine when a supply takes place, the place where a supply is deemed to have occurred; the place of supply of services connected with immovable property; and the treatment of transport services, telecommunications services, and electronic services, and intra-GCC supplies; rules concerning valuation of supplies; and pricing rules, including rules concerning discounts, subsidies, and vouchers. It also discusses reverse charges; reporting and documentation rules; and the treatment of cross-border supplies.

The Regulations are available on the Ministry of Finance’s website and the tax agency’s website.

Commenting Minister of Finance Hamdan bin Rashid Al Maktoum said: “The release of the Executive Regulation of Federal Law No. (8) of 2017 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.”

Businesses are required to register to collect and remit value-added tax if at any time during the past twelve months the value of their taxable supplies exceeded the mandatory registration threshold of AED375,000 (USD102,000), or if the entity anticipates that they will exceed the threshold within the next 30 days.

Taxpayers can register voluntarily if the total value of their taxable supplies exceeded AED187,500, or if the business expects to exceed that threshold within the next 30 days.

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