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UAE VAT law 2018

  • Aug 27, 2017 | Richard Asquith

UAE VAT law 2018

The United Arab Emirates has published its Value Added Tax decree law today, paving the way for the introduction of the indirect tax on 1 January.  The standard VAT rate will be 5%, with a nil rate for certain goods.

The detailed Executive Regulation, providing guidance on VAT compliance processes, will be provided at a later date.

They will join Saudi Arabia, which has already published its draft VAT law and regulations.  It is expected that the four of the other six Gulf Co-Operation Council states will launch VAT in the next twelve months.


The key element of the new law cover:

  • 5% on taxable supplies and imports
  • VAT registration requirement threshold (Dh 375,000) and calculations, including voluntary registration option (if revenue above Dh 187,500)
  • Setting up VAT groups
  • Determining the date of supply for VAT purposes
  • Place of supply of goods and services rules
  • VAT nil-rating on the supply of goods and services within other GCC states which have implemented VAT
  • Exemptions on supply of service rules i.e. taxable where supplied
  • Role and impact of tax agents
  • Determining the value of taxable supplies, discounts and imports
  • Mixed supply rules
  • Supplies subject to zero rating:
    • Exports
    • International passenger transport
    • Import of precious metals
    • First supply (within 3 yrs of construction) residential properties
    • Crude oil and natural gas
    • Publically provided education
  • Exempt supplies
    • Financial services, including insurance
    • Supply of residential building (subject to zero rating clauses)
    • Land
    • Passenger transport
  • Reverse charge rules, including imports and movements from other GCC VAT implementing rules – more details to be provided in Executive Regulation
  • The right to recover input VAT, including import VAT incurred on goods subsequently moved to UAE (onward supply relief)
  • Credit notes and bad debts
  • VAT invoice requirements, FX treatment and requirements for date of issuance
  • Tax credits, carry forwards and when refunds may be made
  • VAT recovery for non-resident businesses and consumers
  • Penalties
  • Record keeping requirements, including:
    • Invoices, credit notes etc
    • Import and export records
    • Minimum period for retaining records will be contained with the Executive Regulation
  • Transitional rules for the launch of VAT

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is the former VP Global Indirect Tax at Avalara