The UAE Government implements regulatory mechanisms and frameworks on a periodic basis, across Government departments and realms, as part of its key initiatives to boost economic health. One such significant implementation was the introduction of VAT (Value Added Tax) in the UAE.
In 2018, Value Added Tax (VAT) was implemented in the GCC (Gulf Cooperation Council), with key economies like the Kingdom of Saudi Arabia and the United Arab Emirates adopting and implementing the regulatory framework. For the general public, this meant higher payouts for entertainment, food, cars, and other categories. For businesses, this meant levying VAT on their goods and services, at each transactional stage from raw materials to finished products. More importantly, VAT would not only impact businesses operating in mainland jurisdiction but also have a complex impact for businesses based in Freezone jurisdictions as well. The entire framework of VAT taxation is an attempt to streamline macro and micro financial compliance across all businesses based anywhere in UAE.
The UAE Government adopted a wait and watch policy, whereby they took the role of mentor and educator, to get businesses compliant under the VAT framework. However, in 2019, with one calendar year of VAT implementation having been completed, they adopted a bit more stringent compliance framework. This particular approach was to be used as a model for VAT implementation across other GCC countries, where the concept of taxation is relatively new. The government deserves credit for smooth VAT implementation across the board and it is evident from the overall compliance rate which is above 90% across all UAE businesses.
The Government saw VAT collection revenues of AED 27Bn in 2018, surpassing its target of AED 12Bn for 2018 and AED 20Bn for 2019. Naturally, from a monetary perspective, this is one of the large revenue-generating sources for the UAE Government.
While the general public, the ultimate consumer, has adopted VAT smoothly and accepted (and budgeted for) the increased cost of the goods or services they consumed, it is the businesses that have been concerned about the regulation mechanism, the rules, the jurisdictions and any penalties.
At The Corporate Group, we provide valuable guidance to our clients on VAT Consultancy Services. The Corporate Group provides a full suite of VAT Consultancy Services, right from VAT Health Checks, to registration, to ongoing VAT return filing, compliance and consultancy services. We believe that our clients should not only be VAT-ready and compliant, but should also be able to turn this into competitive advantage with the right VAT Consultancy Services strategy.
While VAT and VAT Consultancy Services may be a relatively new concept in the Middle East, VAT has been in force for many decades across other parts of the world. Leveraging on VAT frameworks, regulations and implementations from around the globe, our sincere advice would be to take VAT Consultancy seriously and engage with expert VAT Consultancy advisors, preferably those with global experience. Getting the VAT Health checked for your business (for VAT readiness) would be a good start.
Whether your requirement is VAT Consultancy Services or GST registration services in UAE or anywhere in the world, our comprehensive and effective service covers your needs, with minimal hassles.
VAT registration demands a strong knowledge of local tax legislation and procedures, not to forget the appropriate language skills. Any deviation from these fundamental prerequisites will see many an application getting rejected.
To minimize the issues with registration, many businesses opt to engage VAT Consultancy Services through specialists who provide service through a dedicated account manager, to assist you with the entire registration and compliance process.
Our team of expert VAT Consultancy Advisors provides multilingual support to help you obtain a VAT registration number in a quick time.