4 things to know about UAE’s new tax
Whether you’re a citizen or a resident in the UAE, here are five things you need to know about the new taxation measures:
The UAE announced this week that it is establishing a new Federal Tax Authority (FTA) which will oversee tax measures throughout the country.
Whether you’re a citizen or a resident in the UAE, here are four things you need to know about the new taxation measures:
What is the role of FTA?
A decree issued by President Sheikh Khalifa Bin Zayed Al Nahyan on Monday said the authority will be in charge of collecting data, information and statistics on taxes. It will also coordinate with the federal government, local governments and taxpayers on all matters related to taxes and related fines.
The UAE Ministry of Finance is advertising 30 positions for the new tax authority on its website, according to Bloomberg. The Cabinet will later issue a resolution to appoint a minister and board members to oversee the authority and represent the country in regional and international meetings on taxes.
UAE’s VAT plan in 2018
Since late 2015, the UAE has drawn up plans to introduce a value-added tax (VAT) from the beginning of January 2018. The government has been advised by the International Monetary Fund (IMF) to set VAT at 5 percent. Once introduced, it would make the UAE the first Gulf state to tax at the point of sale.
The 5% VAT won’t apply to everything
100 food items, health, education, bicycles and social services would be exempt from VAT, Minister of State for Financial Affairs Obaid Humaid Al Tayer said in a report by khaleej Times.
Analysts say that the impact of such a low rate of five per cent could be of minimal effect on the cost of living and doing business in the country.
Corporate, income taxes not under consideration for now
Al Tayer was quoted earlier saying that corporate and income taxes are not under consideration for the time being.