2 products to be taxed 100% in UAE, VAT value set

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Consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Sed ut perspiciatis unde omnis iste natus error sit voluptatem accusantium doloremque laudantium, totam rem aperiam, eaque ipsa quae ab illo inventore veritatis.” byline=”staff reporter” caption=”Picture for illustration purposes only.” credits=”ARCHIVE”]2 products to be taxed 100% in UAE in 2017, VAT value set

 

DUBAI – Ahead of a planned implementation of Value Added Tax (VAT) in the UAE next year, authorities on Tuesday (May 23) announced that two products are going to be hit with 100 percent tax beginning in the fourth quarter of this year.

The Federal Tax Authority (FTA) said that tobacco products and energy drinks are going to be taxed 100 percent, while carbonated drinks will be levied with a 50 percent tax.

The FTA also said that a 5 percent VAT will be introduced in the country starting on January 1, 2018.




The authority said that certain services and products are exempted from taxes, and these include “international transportation, commodities and exports, health and education services, gold imported for investment purposes”.

Residential buildings for sale or lease during the first three years after construction has been completed are also tax-exempt, along with “some financial services and empty plots of land”.

The FTA made the announcement during its first meeting chaired by Sheikh Hamdan Bin Rashid Al Maktoum, Deputy Ruler of Dubai and Minister of Finance.

“The tax procedures law is in the final phase, and will soon be issued and published. The VAT law is being debated by the technical legislative committee in preparation for submitting it to the Cabinet for approval, while the selective tax draft law will be soon discussed by the committee,” said Sheikh Hamdan.

Meanwhile, companies and corporations making a minimum annual income of
Dh375,000 are required to register under the VAT system. Registration is optional for companies with an annual income of Dh187,500 or lower. Companies have until the third quarter of 2017 to register, which becomes compulsory beginning in the fourth quarter of the year.

VAT-exempt businesses can decide whether or not to pass on the VAT cost to the consumer, according to the FTA. DAJ/Expat Media

 

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