From January 01st 2018, all businesses in the UAE bringing in an income of AED 375,000 and over must register for VAT, and continue to meet the necessary tax regulations accordingly. The Sarah Ferguson Tax Consultancy has been a preferred tax consultant Dubai for a number of reasons, our extensive experience being a key one of them. In line with this, we’re also able to assist start-ups and small businesses accordingly, so they may also register for VAT, so when they start generating the required income, they won’t be subject to any penalties.
Taking a look at Abu Dhabi, ‘Over 260,000 companies and over 10,000 groups (consisting of approximately one or two companies in a group), have registered for VAT since it came into effect at the start of this year’, Director General of the Federal Tax Authority, Khalid Al Bustani said in Abu Dhabi on Tuesday.
‘We are satisfied with the implementation of VAT registrations so far. Applications of some companies are under processing and some applications have been returned due to incorrect or incomplete information. We are expecting to conclude the remaining registration process soon.’ stated Al Bustani, while urging firms with an annual turnover of more than Dh375,000 to register at their earliest possible, stressing that companies who avoid registration will be considered to be breaking the law.
He also said that revenue from VAT will support the UAE’s GDP growth, helping in the diversification process.
‘The impact on individual cost of living is minimal, as VAT is just 5% and cost of living comes in at about 1.05%. However, VAT will significantly support economic growth, and will help the economy in terms of diversifying revenue.’
In Dubai, the implementation of the 5% VAT introduced by the UAE Government on January 1st 2018, is progressing smoothly at private universities according to officials. On a separate note, before VAT was in effect, some parents had initially been confused if they would have to pay the tax on their children’s higher education, because school tuition had been exempted or ‘zero-rated’.
Clarifying the situation, the Federal Tax Authority stated that institutions of higher education such as universities are not exempt from tax, unless they are owned by the federal or local governments, or receive more than 50% of their annual funding directly from the federal or local governments. Hence, this means that private universities have to charge and collect VAT on behalf of the government from their students.
Consult our VAT registration company Dubai for specific VAT information pertaining to your business, and avoid facing hefty fines.