Latest NewsNEWSGulf

UAE: new tax laws and regulations will soon be released

Recently the Emirates government had changed their laws regarding VAT and other taxes. But new laws are soon to be released in the future.

Following the announcement of the introduction of value-added tax (VAT) from January 2018 and imposition of excise taxes from October 2017, the UAE’s Ministry of Finance is considering new taxes to be imposed in the future in order to increase its revenue.

However, it ruled out any tax on individual income.

A statement distributed by the Ministry of Finance on Monday said that other taxes will be imposed in the future, but didn’t provide more details.

“Currently, the UAE does not think of imposing tax on individuals’ income. But the UAE is working on other tax options. Yet, they are under study and analysis. It is likely that they will not be implemented in the near future,” the statement said.

The UAE government imposed 50 per cent excise tax on carbonated and energy drinks and 100 per cent on tobacco products. It will also impose 5 per cent VAT from January 1, 2018, on a host of goods and services. The UAE already has one of the lowest tax rates in the world.

Anurag Mehta, secretary, the Institute of Chartered Accountants of India, said the other taxes that potentially might be introduced in the country could be corporate tax or possibly additional taxation on luxury cars because such is the case in Singapore.

“Tax on luxury cars is very high in Singapore to encourage residents to use public transport in the country,” Mehta said, adding that “taxation is the backbone of any economy. But the question is how people grasp it because the taxation system is rather new to the UAE.”

Addressing a press conference to highlight executive regulations about VAT, Younis Haji Al Khoori, undersecretary of Ministry of Finance, pointed out that VAT would support the economic development witnessed by the UAE, as well as enable it to compete with the world’s most advanced economies.

He said: “All companies should cooperate and respond to the requirements of the Federal Tax Authority to speed up the process of tax registration.”

Khouri warned businesses that have not yet registered to seize this opportunity and register for VAT in order to avoid any penalty as per Cabinet decision No (40) of 2017 about administrative fines applicable on VAT violators.

No delay in VAT

Soothing any concerns among business community about the impact of VAT, he said: “VAT was introduced in the UAE after in-depth studies indicating that there would be no impact on the business sector and the investment environment in the country, nor would it affect the country’s position and competitiveness should it be implemented. In fact, the UAE will implement the lowest VAT tax rate on a global level.”

He said the ministry has authorised the issuance of tax-related legislation and policies, as well as the establishment of legal frameworks to start the application of value added tax at the beginning of next year without any delay.

Must know

>There will be no effect of VAT on businesses or investment in the UAE

>The cost of living may go up slightly, but the rise will vary depending on lifestyle of people

>VAT will help the country reinforce its economy by diversifying sources of revenues and help fund public services

>The tax is part of the UAE leadership’s vision for long-term growth

>Imposition of VAT has nothing to do with oil price fluctuation

>Currently, the UAE is not thinking of imposing tax on individuals’ incomes


Post Your Comments

Back to top button