10 Sep VAT: More Information to Come
VAT has been the talk of the town since it was first announced, but we had to wait for the juicy details as the government completed their planning. And though the recently released Federal Decree-Law No. (8) of 2017 has given businesses a lot more clarity, there are still a few details being decided, which we should see when the Executive Regulation is released. So, what exactly is this new information we learned from the new Federal Decree? Let’s find out!
- What happens to free zone companies?
We know that some will be treated as ‘outside the State’ and the VAT law will not apply. But we don’t know which ones. There’s specific concern about how financial centres like DIFC and ADGM will be affected. The Executive Regulation should give much more detail about how free zones will manage VAT.
- Do I have to include VAT in my pricing?
Yes, all advertised prices must include the 5% VAT, so there won’t be any surprise when your customers reach the till. However, the Executive Regulation should give guidance regarding whole sellers.
- What about tourists? Will they be able to reclaim VAT?
Maybe – we’ll have to see if the Executive Regulation lets non-residents recoup VAT on goods being exported. But if we had to guess, we’d say tourists don’t have anything to worry about.
- So, what else is new?
The federal law gives us provisions for capital assets, adjusting tax filings, taxes on samples and commercial gifts, and for supplies between related parties. Businesses will have to work with registered tax agents to properly file their VAT statements. By the way, those statements will have to be in Arabic. And don’t forget about tax evasion, which is also covered (and is a criminal offense).
But probably the most exciting news is that the Federal Tax Authority has launched the official FTA Website! You’ll be able to register for VAT online (starting October or November), watch for updates, and find out how to file your returns. But most importantly, keep checking the website to see when registration opens. Then you can check that off your ‘to-do’ list – and how great does that feel?