On January 1, 2018, the UAE imposed VAT at a base rate of 5%. Naturally, subsequent legislation may alter that rate. There are supplies that are exempt and supplies that are zero-rated. The law outlines the categories that are zero-rated or exempted; the most significant examples include oil, education, healthcare, and certain financial services.
Can imports be made into a UAE Free Zone?
For VAT purposes, free zones that are gated and fenced off, like the Jebel Ali Free Zone, are outside the territory. Transfer takes place at the gate as soon as one leaves the free zone and enters the area of the UAE that is not a free zone.
On an import into the UAE, who issues the VAT invoice?
The laws of the UAE have no bearing on the foreign exporter, so they do nothing. By reverse-charging and reporting to the FTA, the importer from the United Arab Emirates is responsible for accounting for the VAT on the import.
Should a business (branch or company) registered in the United Arab Emirates pay VAT on invoices from consultants based outside the country?
Sure. The reverse charge mechanism is applicable to both imported goods and services.
Will UAE VAT be due if an international office gives legal advice to UAE attorneys regarding issues impacting its operations there?
Absolutely, in the event that there is a local presence, it will be presumed that the services are rendered to the local company. In the event that the services are related to the original establishment of the local business, the time leading up to the establishment should be strictly invoiced abroad, VAT excluded, and any subsequent guidance should be invoiced locally, VAT included. Should the services be associated with the initial launch of the local company, all pre-launch work must be strictly invoiced overseas (VAT not included), and all subsequent guidance must be invoiced locally (VAT included).
How to register in the UAE for VAT
The procedures listed below must be followed if you are qualified to register for VAT in the United Arab Emirates:
Verify your eligibility for VAT: As previously mentioned, there are three tax categories for independent contractors. Determine which income bracket you are in in order to find out if you are subject to VAT or not. If so, move on to the following actions:
Getting a license: A freelancer must first obtain a license in order to register for VAT. The freelancer must obtain authorization from his employer before applying for a license. In the United Arab Emirates, there are several free zones that charge for freelancer licenses. Before obtaining a license, you must learn more about the free zones and their associated expenses.
Register Online: The online registration Vat Services in Dubai available. The freelancer needs to register for an account on the Federal Tax Authority’s portal after obtaining the necessary license. They must first log in and then register for VAT. When registering for VAT, they ought to have the required paperwork on hand.
Conclusion: Investing in VAT services is important for businesses working in Dubai.