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Value Added Tax (VAT)

Value Added Tax (VAT)

All member countries from the GCC aim to implement VAT, effective from January 1, 2018 after having the GCC VAT framework signed earlier this year. The framework articulates regulations to be followed by the member countries under the VAT guidelines.

VAT Implementation requires involvement from the entire organization because of the impact it has across the entire organization.

Expected road blocks
Lack of familiarity with VAT rules & regulations
Structure and Compliance issues
Lack of resources (Availability of experts and competent staff)
Lack of a robust book keeping system

We at HLB Hamt are ready to help your business in the UAE get ready with your VAT Plan.

Equipping your business for VAT

  • Plan Your Strategy:

Decide on a VAT implementation strategy. Explore the options of outsourcing the implementation process or managing it in-house.

  • Build a Team:

Appoint a team that is well aware of the VAT scenario in the region and fully equipped with the knowledge to successfully implement the required processes

  • Learn VAT Applications:

Understand VAT treatment on every commercial activity of the business
Absorb Information: Understand how VAT impacts business functions and processes in case of revenue, cost and working capital.

  • Assess current capabilities:

Assess your current ERP system. Generate awareness amongst existing staff and provide trainings if necessary.

Impact of VAT on your business

Impact of VAT on your business

How can we help you devise a VAT Plan?

How can we help you devise a VAT-Plan

VAT: What we know so far

      • The VAT Framework Agreement aims to implement a registration threshold of
      1. Mandatory: AED 375,000/-
      2. Voluntary: AED 187,500/- (minimum)
      • The VAT will be charged at a standard rate of 5 % unless the goods or services are exempt/Zero rated by individual member states.
      • The following categories of supplies will be exempt from VAT
        • The supply of some financial services (clarified in VAT legislation);
        • Residential properties;
        • Bare land; and
        • Local passenger transport
      • The following categories of supplies will be Zero rated:
        • Exports of goods and services to outside the GCC
        • International transportation, and related supplies
        • Supplies of certain sea, air and land means of transportation (such as aircrafts and ships)
        • Certain investment grade precious metals (e.g. gold, silver, of 99% purity)
        • Newly constructed residential properties, that are supplied for the first time within 3 years of their construction
        • Supply of certain education services, and supply of relevant goods and services;
        • Supply of certain Healthcare services, and supply of relevant goods and services.
      • VAT registered businesses will be able to reduce their output tax liability by the amount of VAT that relates to bad debt which has been written off by the VAT registered business. The legislation will include the conditions and limitations concerning the use of this relief.
      • VAT input tax refund can be claimed only on the amount paid or intended to be paid before the expiration of 6 months after the agreed date for the payment of the supply.
      • The VAT Framework Agreement will require records to be kept by a business to ensure accurate tax compliance. This would imply maintenance of books of accounts and associated documents required to verify entries, such as:
      1. Annual accounts
      2. General ledger
      3. Sales register
      4. Purchase register
      5. Invoices issued or received
      6. Credit notes and debit notes
      • Any other information as direct by the FTA that may be required to confirm an individual’s liability to tax, including any liability to register.
      • Any taxable person must retain VAT invoices issued and received for a minimum of 5 years. A VAT invoice should have the following minimum details:
      1. A unique numeric id for the document
      2. The date of issue of invoice
      3. The time of supply (only if different from the invoice date)
      4. The name address and TRN number of the supplier
      5. Description of the quantity of goods or extent of services supplied, the date of VAT and amount payable, expressed in UAE Dirham
      6. The total amount of VAT expressed in UAE Dirham together with the rate of exchange applied and source of that rate.

Meet our Experts

Mr. Jay Krishnan
Mr. Jay Krishnan is rich experience in the field of business consultancy and International Tax. Jay is a fellow member of Institute of Chartered Accountants of India and a Certified Management Accountant (CMA) His international career spans across the field of auditing, finance, Tax and consultancy services having worked for firms in India and the Middle East

Mr. Jozef Wallace Galea
Mr. Jozef Wallace Galea is a committee member of Malta Institute of Taxation, A thorough VAT Expert, he has overseen and executed VAT implementation in many parts of the globe, through interactive training seminars, Jozef has also educated many corporate heads for effective implementation of VAT and other indirect taxes.

Patrizio Prospero Patrizio
Mr. Patrizio Prospero Patrizio also holds an MBA from Henley Business College and is a fully qualified member of STEP (the Society of Trust and Estate Practitioners). Starting off with a leading accounting firm, Patrizio has built a career from being a part of the audit team to elevating to the rank of a partner in charge of International Business in a short span of time He actively participates as speaker in various international conferences on the subject of Tax, AML and Compliance reporting.

Prashanth K L
Mr. Prashanth heads the taxation team and his in-depth knowledge of tax laws and international taxation has led to him presenting several papers on transfer pricing, with articles published in reputed global magazines. He is a Chartered Accountant, DISA member and holds a Certificate on International Taxation conducted by ICAI.


Call: +971 551601291

Email: tax@hlbhamt.com

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