VAT in UAE | Lincoln University of Business and ManagementJuly 24, 2018 2023-11-07 8:20
VAT in UAE | Lincoln University of Business and Management
In the United Arab Emirates (UAE), they have something called Value Added Tax, or VAT for short. It came into effect on January 1, 2018.
What is VAT?
Well, it’s a tax that gets added to the cost of goods and services as they’re made or moved along the supply chain. The person who ultimately purchases the good or service—typically, that’s you and I—is responsible for paying this tax.
Businesses are the ones responsible for collecting this tax and sending it to the government. In the UAE, the standard rate for VAT is 5%, which means 5% of the price of most things you buy goes to the government as tax.
The reason they introduced VAT is to help the government get money from sources other than oil. It’s a way to diversify their income and make the economy more stable.
VAT applies to a lot of things you buy, but there are some exceptions and special rules for specific industries. It’s a big deal for the UAE government because it’s a significant source of income. They keep track of it and make sure everything is fair through an organization called the Federal Tax Authority.
The VAT in UAE is fast adapting to the changes due to its implementation since January 2018. We would like to provide an opportunity to our MBA learners (MBA: How Many Years?) who wish to save on the 5% additional “VAT in UAE” charge to be levied on all payments from the start of the year 2018.
Why is VAT in UAE applicable?
VAT will be another wellspring of income for governments in the Gulf Cooperation Council (GCC).
The main evaluation is that the UAE will produce more than Dh12 billion in extra income in the principal year after the usage of this new expense.
GCC nations have chosen to actualize tax assessment as a component of the legislatures’ endeavors to expand incomes with regard to the sharp decrease in oil costs. The International Monetary Fund has been suggesting financial unions in the GCC through the broadening of government incomes and the diminishment of endowments.
The government has been thinking about the need to differentiate salary sources, and this is considerably more the case given the advancements adversely influencing government incomes in the district, for example, lessened pay from oil incomes.
Since January 1, 2018, value-added tax (VAT) has come into effect.
What is VAT?
VAT is a transaction tax chargeable on the sale of goods, products, and services. The standard rate of VAT is 5%. Lincoln University of Business and Management FZE, a leading private education services provider The supply of academic and other education services made in return for an explicit charge shall be taxable. As a VAT-registered business, LUBM will be required to charge VAT on its services as specified under the law. This would be in addition to the stated prices. Please note that as of January 1, 2018, the fees charged by Lincoln University of Business and Management FZE on all its services provided (the “fee”) will be subject to VAT.
Invoices and Receipts Issued before January 1, 2018
The regulations, once issued, will determine whether and to what extent VAT is due on invoices and receipts issued before January 1, 2018. If the actual supply occurs after the VAT implementation date, we can issue an additional VAT invoice for services provided in 2017. We reserve the right to do so. But supplied, consumed, or otherwise derived after implementation.
Future VAT Updates
For further information on VAT, visit the websites of the UAE Ministry of Finance (www.mof.gov.ae) and the UAE Federal Tax Authority (www.tax.gov.ae). These contain information on the law and some FAQs on the introduction of VAT. These websites will broadcast the latest announcements on VAT first. Please note that we have created this communication for informational purposes only. This information is not meant to offer tax advice, so please don’t depend on it for that purpose. If you have any tax-related questions, it’s a good idea to reach out to your own tax advisors for guidance.
VAT Charges For Our Services-LUBM
We’re delighted to share that Lincoln University of Business and Management FZE, a prominent private education services provider, has officially registered our company with the UAE Federal Tax Authorities, in line with the VAT Law in the UAE. Beginning January 2018, all products and services provided by Lincoln University of Business and Management FZE, locally in the UAE, will be subject to a 5% VAT tax.
In compliance with the UAE Federal Tax Authority. All payments received via cash, checks, or POS machines will levy 5% VAT. The amount will be included on the invoice or receipt. All issued receipts and invoices in 2017 and prior are excluding VAT.
Should you need any further assistance or clarification, please do not hesitate to reach out to us at our contacts.
*Note: VAT in UAE exempts only federal and public institutions.