Telephone Numbers
Telephone Numbers
Tax in Dubai
For detailed information +90 542 381 3868 'Call.
The FTA is under the control of Federal Decree-Law No. 13 of 2016. The main task of this body is to manage and collect federal taxes and related fines, as well as to distribute tax revenues and implement tax procedures in the United Arab Emirates.
The authority is chaired by Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum.
The Federal Authority works in conjunction with the Ministry of Finance. Its main goal is to ensure economic diversity in the Emirates through profits derived from non-oil-related sources. Such a partnership will enhance the country's financial stability and provide advice and assistance to organizations and consumers in fulfilling their responsibilities.
Taxes are a means of raising revenue to pay for public services. The government is involved in this process. Most often, government revenue from taxation goes to pay for public services, ranging from public hospitals, schools, and universities to defense, infrastructure, and other equally important aspects of daily life.
The following types of taxes apply:
Direct – income and corporate, etc. They are collected by the state.
Indirect – VAT, sales tax, etc. They are collected by an intermediary on behalf of the state. For example, it could be a retail store.
Value Added Tax (VAT) is an indirect tax levied on many goods and services. It is applicable in more than 150 countries. Among them are 29 EU members.
In Dubai, UAE, the VAT rate in 2023 is 9%. The fee is collected at all stages of the “supply chain.” In these relationships, firms collect it and report it to the government, and the costs are fully borne by the final consumers.
The company pays the tax it collects from buyers to the state. Furthermore, if it has paid tax to suppliers, it also has the right to receive a refund from the state.
Ultimately, these revenues are the “value added.”
Both are consumption taxes, so most will not notice the difference in the principle of action.
Most countries prefer to charge sales tax only on transactions involving goods. Moreover, such a fee is only collected from the final sale. VAT, as mentioned earlier, is levied on products and services at each stage of delivery and even at the end of the sale. It is collected on the import of products and services to provide equal conditions for Russian suppliers of the same products and services.
Many states choose VAT for various reasons. At the same time, the tax introduces a more complex approach to the taxation system, as it forces companies to become tax collectors on behalf of the state. It also reduces the number of distortions and tax evasions.
VAT registration by a taxpayer
The company must pay if import shipments exceed AED 375,000. Voluntary registration as a taxpayer is also possible if this threshold is not crossed and the amount of AED 187,500 is exceeded. Additionally, those whose expenses are above the voluntary registration threshold also have the opportunity to register. This option allows newly established businesses with no turnover to become VAT taxpayers.
The registration of financial transactions is mandatory for all companies. Furthermore, the reports must be accurate and up-to-date.
Even if you do not want to register as a taxpayer, you will be required to keep records. There are some nuances for companies that are registered under VAT. These are:
It is also mandatory to regularly report on the amount collected and the amount paid to the state. The submission is official, mostly in an online format. If you have paid more VAT than you have collected, you will need to pay the difference. If you have paid more than the fee you received, you can get a refund for the difference.
Get Information on Tax Advantages in Dubai
An immovable object will be subject to VAT depending on whether it is commercial or residential. A rate of 9% applies to deliveries made with the sale/lease of the first option. The second option is exempt from payment. This is a guarantee that VAT is not an irrecoverable expense for buyers of their own homes. For the developer to be able to get a refund during construction, the first supply of residential real estate within 3 years of its completion is subject to a zero rate of %.
Zero-rated industries
Provision of special services in the field of education and medicine.
When paying tax on business expenses, you can claim a full refund. This is only possible if the incoming tax is related to a taxable delivery. If the situation is different and we are talking about exempt supplies, the pre-paid tax will not be refunded.
Sometimes an expense can be taxable or not. For example, the activities of a bank. In this case, it is worth distributing it among the deliveries.
Most likely, companies will start using a pre-tax (the ratio of the return to the total amount) to differentiate between different supplies.
Deliveries by government bodies are subject to the %. This is a guarantee that they have no advantages compared to private business activities.
At the same time, some supplies are exempt from VAT if they are not in competition with the private sector or if this company is not the sole supplier.
Some government agencies have the right to a % refund. This measure is implemented to prevent problems with the budget and to ensure equal conditions in the field of outsourcing and non-domestic activities.
The processing of government deliveries will depend on the deliveries themselves, but not on the buyer.
Therefore, if the standard tax rate is applied to the offer, the regime will be the same even for a government body.
VAT (VAT BAE) has been in effect in the UAE since 1 January 2018. This tax is considered one of the main sources of government revenue in many countries. In the United Arab Emirates, it is 9% and plays an important role in the state budget.
+90 542 381 3868
+971 58 5204103