First year Impact of VAT in UAE
At the end of one fruitful year of implementation of VAT, let’s go back and see how VAT affected the people in UAE. VAT or Value Added Tax is the tax levied on the consumption of goods and services at each point of production. The end users finally bear the charge and businesses gather the same on behalf of the government.
100% Foreign ownership Law
We have now received more information about the long-awaited 100% Foreign ownership law which is to come into effect in the UAE. According to legal sources, the “Negative List” has been issued where it contains 14 industries which cannot be permitted for full foreign ownership.
Accounts Payable also Known as “Trade payable” is a liability to a creditor usually for purchases of goods and services.
China-UAE Trade Agreements
The Chinese President Xi Jinping’s recent visit to UAE is set to make gradual, yet large economic change in UAE. Both countries spoke about boosting different industries and have made 13 strategic agreements. These agreements include construction of embassies and cultural centers, advancing energy cooperation, e-commerce ties, numerous investments, and the infamous Belt and Road Initiative all of which the UAE government strongly supports, and would bring an inflow of income into the UAE.
Business Ownership Law To Boost Investments
UAE’s most recent investment law has become the talk of the town as it opens up business regulations further and allows 100 percent ownership to foreign investors in certain onshore business sectors. This law is currently awaiting the FNC’s approval and is planned to be introduced in the last quarter of this year.
Business Friendly Changes in Regulations
UAE has taken numerous steps recently for ease of business, by reducing visa requirements for businesses hiring expatriate employees. This not only cuts down on any additional expenses to hire an employee for a business but also increases bureaucratic efficiency.
Clarity on emirates wise classification of sale
For the purpose of filing for VAT, sales will have to be classified on the basis of each emirate.
VAT on Constructing your own house
All the construction related input VAT can be reclaimed if :
- The individual is a UAE national.
Warranties – VAT
What is a warranty?
A guarantee issued by the retailer or manufacturer to the consumer, promising a repair if necessary within a specified period time. This blog is briefly about how warranties are effected by VAT implementation.
Profit Margin Scheme
When second-hand goods are purchased from a non VAT registered user by a VAT registered user, purely for the purpose of resale, the VAT registered user can include the VAT on the profit margin.