UAE Tax : Confirms no income tax yet, but 5% VAT is coming
UAE Tax : 5% VAT in the UAE will be implemented as of January 1, 2018
UAE Tax : The UAE has announced the official date of implementing a 5 per cent VAT rate.
“The percentage will be 5 per cent,” Obaid Humaid Al Tayer, UAE Minister of State for Financial Affairs, told reporters on Wednesday after a joint press conference with Christine Lagarde, Managing Director of the International Monetary Fund (IMF), in Dubai.
“As per the GCC Supreme Council resolution, VAT [in the UAE] will be implemented as of January 1, 2018,” he said.
UAE Tax : January 1, 2018, final for all GCC countries?
UAE Tax : Al Tayer noted that the framework agreement on the implementation of VAT across the GCC is expected to be signed off in June, 2016.
“Other countries can implement [at the same time] or take a later date of implementation, of January 1, 2019,” Al Tayer said.
Which means that while the UAE is keen on 2018 implementation, it is possible that some other GCC peers implement it at a later date (no longer than a year later, though).
The UAE had, earlier this year, confirmed a VAT rate of between 3 and 5 per cent across the GCC, with Younis Haji Al Khoori, Undersecretary at the MoF, revealing that the GCC countries have agreed to unify their tax policies before the introduction of the VAT.
At that time, Al Khoori reckoned that the UAE stands to earn estimated VAT revenues of between Dh10 billion and Dh12 billion in the first year of its application.
He had reiterated that this amount is after exempting sectors such as healthcare and education in addition to several food items of the new tax.
Al Tayer, meanwhile, noted that the Ministry is currently in early stages of studying the potential economic and social impacts of implementing corporate tax.