Federal Tax Authority publishes draft UAE VAT regulations
The Federal Tax Authority has published the draft VAT executiveA�regulations on its website:
It is important to note that the draft VAT executive regulations state that businesses are required to register in accordance with the timelines previously announced by the Federal Tax Authority.A� As a consequence, if taxpayers have not registered within these timelines, it may potentially result in late registration penalties which are AED20,000.A�The registration timelines are as follows:
|(i)||Businesses with annual turnover of more than AED150 million should have registered by 31 October 2017.|
|(ii)||Businesses with annual turnover of more than AED10 million should register by 30 November 2017.|
|(iii)||All other businesses that are required to register should register by 4 December 2017.|
The draft regulations also provide the following criteria for mandatory and voluntary registration.
VAT groups:A� The conditions which are required to be satisfied in order for companies to form a VAT group and the circumstances in which they will be treated as a�?related partiesa�?.
Designated zones:A� The VAT treatment of supplies of goods and services to, within, between, and from, free zones.
Education and health sectors:A�The types of supplies in the education and health sector that will fall within the scope of the zero rate.
Real estate: The definition of residential real estate and property that will not be regarded as residential real estate as well as application of the zero rate to buildings used by charities and converted residential buildings.
Financial services: The definition of financial services and the category of financial services that will be exempt from VAT.
Imports:A� The operation of the reverse charge mechanism and imports by unregistered persons.
Export of goods and services:A� The conditions that need to be met in order for an export of goods or services to qualify for zero rated treatment.
Input tax recovery: Recovery of input tax for exempt supplies, the situations in which the recovery of input tax for taxable supplies will be blocked, and the apportionment of input tax.
Tax Invoices and credit notes:A� The requirements for tax invoices and credit notes.
Special schemes:A� Capital assets scheme and profit margin scheme.
Tax compliance:A� The standard tax period of three months and circumstances in which this period may be shortened or increased.
VAT refunds: The situations in which the Federal Tax Authority will issue a refund including refunds for business visitors and tourists.
Transitional rules: Various transitional rules dealing with contracts and supplies that straddle the implementation date of 1 January 2018.
Record keeping requirements:A� The period for which records will be required to be kept for real estate, rights of government entities in relation to providing access
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