What activities in UAE are liable to VAT – VAT Registration

What activities in the UAE are liable to VAT

As of 2018, businesses in UAE are aware that the Federal Tax Authority imposes a 5% VAT on goods and services exceeding AED.375,000 every quarter. For many new businesses, however, VAT registration often causes unnecessary delay and frustration. Getting a TRN is viewed as a simple task due to the misconception that the process is quick and simple. Vat registration services in Dubai by VAT Consultancy can be availed to obtain a TRN from the FTA. Rather than relying on theory or pure logic, the VAT was developed from observation or experience and, as a result, over the years it has undergone several revisions and reconsiderations in protocols. With VAT consultancy having offices in various emirates, VAT registration in Abu Dhabi, VAT registration in Dubai, VAT registration in Sharjah or VAT registration in Ajman has become a simple experience for the clients.

However, some services are exempted from VAT which includes the following

  1. The insurance, finance, and credit industries.
  2. A training and education program and institutions
  3. Charities that raise money by holding fundraising events.
  4. Certain commercial real estate sales, leases, and rentals
  5. Certain Oil and gas industries
  6. Government services pose no competition to the private sector

Registration for VAT online is free of charge and can be accomplished by visiting the FTA’s e-services portal. Presently, acquiring a TRN number is typically difficult due to a lack of experience and an inability to understand the FTA processes and requirements, leading to unforeseen situations. ​​VAT registration in UAE is one of the core competencies of VAT consultancy services in Dubai and as such we are fully equipped with the knowledge and experience of obtaining a TRN for any VAT-compliant company in UAE,

Insurers and reinsurers

Life insurance and reinsurance companies are exempted from VAT. Health insurance and reinsurance, motor insurance, and reinsurance, and property insurance or reinsurance are levied with a 5% VAT

Services related to finance

Products with no apparent fees, commissions, or rebates, Interest on credit cards, and other forms of lending, and The issuance, allocation, or transfer of stock or debt securities are exempt from VAT. All other financial services are covered under VAT.

Insight into education

Education institutions excluding higher education, both private and public schools have a VAT rate of 0%. At the same time, the higher education institutions completely owned by the government or having a 50% stake by the government enjoy 0% VAT. Early childhood education and after-school activities that are provided free of charge by teachers are 0% VAT compliant. Whereas Prove Educational institutions, Uniforms, School Stationery, Gadgets used in schools, Renting out school premises for functions, Recreational trips, etc are VAT compliant.

The healthcare industry

Vaccines as one element of preventative health care and other treatments in preventive health care and other therapies for humans except for makeovers like cosmetic surgery have a 0% VAT policy. Certain medicines and medical equipment approved by the Cabinet of UAE also have a 0% VAT policy. All other medical supplies are levied a 5% VAT.

Oil and Gas

Crude oil and natural gas industries are 0% VAT compliant whereas all other oil and gas products are implemented with VAT

The real estate market

The first sale or rent of a residential building after it has been constructed or converted and the first sale of a building intended for charity is zero percentage taxed whereas the sale or rent of a residential building from the second supply is exempted from VAT. Even the sale or rental of bare land is exempted from VAT. The sale and rental of commercial buildings are covered under 5% VAT. Any sale or rental of land which is not bare is taxable.

Food and beverages

Food and beverage products in general are implemented with a 5% VAT

Government Activities

The activities undertaken by designated government bodies that are not in competition with the private sector are exempted from tax

Charity or Non-profit organizations

If they are not conducting business in the UAE, the activities of foreign governments, international organizations, diplomatic bodies, and missions are exempted from VAT. Public welfare societies and associations conducting charitable activities that are listed by the Cabinet of UAE are also outside the tax. Certain activities that are not listed by the Cabinet are allowed to enjoy zero tax rates

Movements within the Free zone or designated areas are exempted from tax whereas movement of goods and services from the mainland to free zones are taxed. To avoid any complications in obtaining Vat registration in UAE and obtaining the TRN can be an easy process with VAT consultancy as we are well versed with the in and out of the process of VAT registration in UAE, especially with VAT registration in Abu Dhabi, VAT registration in Dubai, VAT registration in Sharjah, VAT registration in Ajman and another emirate. Our key expertise is obtaining a TRN and providing the required evidence for hassle-free VAT registration.

Tax fines

A list of violations and fines associated with the tax has also been released by UAE’s Finance Ministry which includes the vendor displaying prices with VAT, incorrect VAT filing, etc