Important things you need to know about VAT in UAE


Tax authority defers date to file returns

The FTA has provided the first VAT return period from January 1 to May 31 and subsequently on a quarterly basis. This means the first return will need to be filed on or before June 28 and later returns from June 1 to August 31, September 1 to November 30, December 1 to February 28-29.

How to know when to File Returns?
Log onto the FTA's website and check the tax period under your profile. Some businesses have been given one month and others have been given five months. Now, firms can file their first tax returns after four or five months in June as per the new timelines appearing on the FTA's dashboard after log-in by a member company.


Here's a rundown of what you need to know about VAT - from what products and services are subject to it to knowing whether companies are trying to pull a fast one on you

If and only if

Businesses are not allowed to charge VAT unless they are registered with the Federal Tax Authority and have a tax registration number (TRN)

Full details

Details of VAT should be displayed on the tax invoice issued to customers, which should include the total amount and tax being charged, plus the TRN

Loose change

In cases exact change cannot be given, rounding off can be applied; for example, 13 fils can be rounded off to 25 fils, 39 fils to 50 fils and 69 fils to 75 fils

Enjoy for a little more

Leisure and entertainment services - including theme parks, cinema tickets, concerts and restaurants - are subject to VAT

Save on Salik by.

.buying cards online - it won't cost you anything extra. Salik cards are subject to VAT when bought in stores

Health benefits

Consultancy and medicines are zero-rated for preventive- and treatment-related services

Learn it

VAT will directly hit universities, unless it is 50% funded by a government grant. The only exception is the rent in student accommodation

Thanks, jewellers

VAT is implemented on investment gold, silver and platinum jewellery with 99% purity. For consumers, the tax is applicable on the entire piece rather than on making charges. However, some companies are happy to absorb the VAT cost, mostly on diamonds

Your call

There are no extra charges on recharge cards. For data packages, any plan taken in 2017 and spilling over into 2018 will be subject to VAT

Got beef?

The public is encouraged to report any complaint via the Ministry of Economy's call centre on 600522225, which works from 7am to 10:30pm.

Education

In the education sector, there are five items that have zero VAT.

These include (1) nursery education and pre-school education, (2) school education, (3) higher education provided by institutions owned by the government or getting more than 50 per of their funding from government, (4) printed and digital reading material provided by the education institution and (5) school trips related to curriculum.

School transport is VAT exempt, according to the authority.

A 5-per cent VAT applies to school uniforms, electronic equipment, food and beverages on campus, school trips for recreation and extra-curricular activities.
The UAE has adopted a 5 per cent VAT which kicked in on January 1, 2018.

Healthcare

In the healthcare sector, services that have zero VAT include preventive healthcare and treatment (provided by a healthcare institution, physician, nurse, dentist or pharmacy licensed by the Ministry of Health and Prevention, MOHAP), or the competent authority).

Also VAT-exempt are medications registered or approved by the MOHAP.

Medical equipment registered or approved by the ministry.

A 5 per cent VAT applies to medications that are not registered or approved by the MOHAP and other healthcare services that are not for treatment and are not preventive.

Important Information for Consumers Regarding VAT

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20 Free Zone areas in UAE are exempt from VAT

Abu Dhabi: Free Trade Zone of Khalifa Port; Abu Dhabi Airport Free Zone; and Khalifa Industrial Zone

Dubai: Jebel Ali Free Zone (North-South); Dubai Cars and Automotive Zone (Ducamz); Dubai Textile City; Free Zone Area in Al Quoz; Free Zone Area in Al Qusais; Dubai Aviation City; and Dubai Airport Free Zone

Sharjah: Hamriyah Free Zone; Sharjah Airport International Free Zone

Ajman: Ajman Free Zone

Umm Al Quwain: Umm Al Quwain Free Trade Zone in Ahmed Bin Rashid Port; Umm Al Quwain Free Trade Zone on Sheikh Monhammed Bin Zayed Road

Ras Al Khaimah: RAK Free Trade Zone; RAK Maritime City Free Zone; RAK Airport Free Zone

Fujairah: Fujairah Free Zone; Fujairah Oil Industry Zone (FOIZ)
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