VAT rules not yet finalized: UAE Ministry of Finance

Abu Dhabi - Ministry of Finance urges the public to only follow official government websites and media outlets for updates on VAT.

The UAE Ministry of Finance is still in the process of preparing the executive regulation of value-added tax (VAT) and tax rates on supply of goods and/or services and exports are yet to be determined, a top official said.

Younis Haji Al Khoori, undersecretary of the ministry, said that the ministry is committed to working with the highest levels of transparency and disclosure, and will publish all information related to VAT and taxable supplies once the executive regulation is issued in Official Gazette and published on the ministry's website.

“UAE Ministry of Finance will publish the executive regulation on VAT as soon as it is issued. All concerned parties will be informed through official channels including the Ministry’s website, Official Gazette and media publications,” a statement issued on Monday said.

Al Khoori also highlighted that the ministry's website is the only official source for any information related to VAT and excise tax, and information which is incorrectly attributed to the ministry and circulated on social media channels and messengers should be disregarded, specifically if not published on the ministry's website or Official Gazette. "Be advised there are several previous announcements being circulated online which are covering details with regard to KSA's tax policy."

MoF previously announced the executive regulation of federal law No. (7) of 2017 on tax procedures, which aims to clarify several topics, including keeping accounting records and commercial books related to tax purposes, period of record-keeping mechanism and saving. The MoF also announced the executive regulation of federal Law No. (7) of 2017 on excise tax, which identifies liability to tax, tax registration and exception methods, rules of tax payment, with a detailed explanation about exemption for exemption for selective goods.

In addition, the UAE Cabinet issued the Decision No. (38) of 2017 on Excise Goods, Excise tax rates and the methods of calculating the Excise price.

The Federal Tax Authority (FTA) recently announced that businesses can now go for online registration of VAT, which is scheduled to start from January 1, 2018, at a standard rate of 5 per cent. It said all businesses with an annual turnover of Dh375,000 must go for online registration. However taxpayers can register voluntarily if the total value of their taxable supplies exceeded Dh187,500, or if the business expects to exceed that threshold within the next 30 days.

The businesses, with an annual turnover of over Dh150 million, were also urged by the authority to register before October 31, 2017, while businesses with an annual turnover exceeding Dh10 million are allowed to register before November 30, 2017.

All businesses that must be registered by January 1, 2018 and should submit their registration applications before December 4, 2017 to minimise the risk of not being registered in time for the beginning of 2018.

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