What is VAT? VAT, or Value Added Tax, is a consumption-based tax levied on the value added at each stage of the supply chain. It’s a form of indirect taxation applied to most goods and services. Why was VAT introduced in the UAE? The UAE introduced VAT on January 1, 2018, as part of its strategy to diversify the economy and reduce reliance on oil revenue. This move aligns with global taxation practices and aims to support the country's infrastructure and public services. Overview of VAT implementation in Dubai Dubai follows the Federal Tax Authority's (FTA) guidelines for VAT. Businesses are required to collect VAT from consumers and remit it to the FTA, ensuring compliance with the regulations. The Basics of VAT in Dubai VAT rates in Dubai The standard VAT rate in Dubai is 5%. However, certain goods and services may qualify for zero-rating or exemptions. Goods and services subject to VAT VAT applies to most goods and services, including retail items, hospitality services, an...
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