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UAE VAT Registrations Now Open
The Federal Tax Authority (FTA) has launched the registration process for VAT Registration today, on October 1, 2017. Businesses that are eligible for mandatory registration are required to register via the FTA’s portal website.
In a prior statement, FTA said it will be assisting businesses in the UAE with regards to financial and technical systems to ensure readiness to comply with tax regulations. This covers both the excise tax in October 2017, and the Value-Added Tax (VAT), which will be implemented starting January 2018.
VAT is one of the most common types of consumption tax found around the world. Over 150 countries have implemented VAT (or its equivalent, Goods, and Services Tax), including all 29 European Union (EU) members, Canada, New Zealand, Australia, Singapore, and Malaysia.
VAT is charged at each step of the ‘supply chain’. Ultimate consumers generally bear the VAT cost while Businesses collect and account for the tax, in a way acting as a tax collector on behalf of the government. A business pays the government the tax that it collects from the customers while it may also receive a refund from the government on the tax that it has paid to its suppliers. The net result is that tax receipts to government reflect the ‘value add’ throughout the supply chain.
Taxable persons are required to settle their taxes within 15 days of the end of each month.