Retail ERP Solutions

Value-Added Tax or VAT is a tax on the consumption or use of goods and services levied at the point of sale. VAT is a form of indirect tax and is used in more than 180 countries around the world. The government of UAE published guidance on zero-rated and exempt supplies on their website ( government.ae ). Q.1: Do suppliers of zero-rated and exempt supplies charge VAT? Suppliers do not charge tax on a zero-rated or exempt supply. Q.2: What is the zero rate? If you make supplies at the zero rate, this means that the goods are still VAT taxable but the rate of VAT is 0%. You will need to record any zero-rated supplies in your VAT account and report them on your tax return. Q.3: If I make zero-rated supplies, do I need to register? As a supplier, you must register for VAT if your taxable turnover (which includes zero-rated supplies) exceeds AED 375,000 in a 12-month period, or if you expect your taxable turnover (which includes zero-rated supplies) to exceed AED...

Ministry of Finance (MoF) UAE has published VAT information on their website(www.mof.gov.ae). The new piece of information has published in the format of frequently asked questions (FAQ’s) and is designed for the awareness of VAT system in UAE. General Questions Q.1.1- What is Tax? Tax is the means by which governments raise revenue to pay for public services. Government revenues from taxation are generally used to pay for things such public hospitals, schools and universities, defence and other important aspects of daily life. There are many different types of taxes: A direct tax is collected by government from the person on whom it is imposed (e.g., income tax, corporate tax). An indirect tax is collected for government by an intermediary (e.g. a retail store) from the person that ultimately pays the tax (e.g., VAT, Sales Tax). Q.1.2- What is VAT? Value Added Tax (or VAT) is an indirect tax. Occasionally you might also see it referred to as a type of general consumptio...

Selected supplies in sectors such as transportation, real estate, financial services will be completely exempt from VAT The Federal Tax Authority (FTA) has announced the supplies that will be subject to Value Added Tax (VAT) as of January 1, 2018, revealing selected sectors that will be assigned zero-rated tax, such as education, healthcare, oil and gas, transportation and real estate. Selected supplies in sectors such as transportation, real estate, financial services will be completely exempt from VAT, whereas certain government activities will be outside the scope of the tax system (and, therefore, not subject to tax). These include activities that are solely carried out by the government with no competition with the private sector, activities carried out by non-profit organisations. The UAE Cabinet is expected to issue a Decision to identify the government bodies and non-profit organisations that are not subject to VAT. The below table outlines all supplies that will be...