Gulf Co-operation Council (GCC) countries agreed in 2015 for GCC wide implementation of VAT - Value Added Tax. UAE as a part of this drive to increase non-oil revenue, has implemented VAT w.e.f 1st Jan 2018 at a standard rate of 5%. Federal Tax Authority (FTA) is the government entity responsible for implementaiton and enforcement of VAT in UAE.

VAT is a general consumption tax which is applied on goods and services as the Value incrementally increases at various stages. The imposition of VAT has greatly impacted the functioning of the business in UAE. VAT considerations will come into play with changes in business scenarios, such as the launch of new business lines, new services/transactions being added to your business, changes in your supply-chain structure or changes in employee fringe benefits, etc. All these would need review and advice from a VAT impact perspective.