The Value Added Tax (VAT) is one of the primary consumption taxes in the UAE. It is an indirect tax that is levied on most goods and services at all stages of the supply chain, from the production stage all the way to the end consumer.
One of the basic components of the UAE VAT system is the process by which businesses are able to recover the tax they paid on their business inputs. They can do this because the system is set up in such a way that only the net value added at each level is taxed, effectively avoiding the “cascading” or “tax-on-tax” phenomenon associated with general sales taxes.
This approach makes VAT a global standard and effective consumption tax employed everywhere. The UAE formally rolled out VAT in 2018 in accordance with the GCC Common VAT Agreement. Companies are liable for charging the amount of VAT to the buyer and then remitting that tax withheld to the concerned government agency.
Ace Consultants provides specialized training and assistance to help your organization be fully ready to take on every facet of UAE VAT rules, being in complete compliance and keeping proper bookkeeping records.