UAE government is finalizing procedures to implement sales tax or VAT. According to Al Ittihad newspaper, only luxury goods segment will be affected, such as Alcohol and Tobacco products, the daily goods will be exempt from tax. The first draft law is scheduled to be implemented in the third quarter of this year. It is not known what will be the stake of taxes, IMF suggests to start from 5%. There is no information when and how the UAE government is planning to impose tax, companies will be given a 2 year transition period to adjust to the new tax rules. Earlier the GCC council discussed to implement VAT in all GCC countries, however UAE will be the first GCC country to impose tax. The final tax rate has yet to be agreed.
Walton Consultants DMCC