The United Arab Emirates has issued legislation and regulations, based on the GCC VAT Treaty, the launch of Value Added Tax from 1 January 2018.
The standard VAT rate will be 5%, with a nil VAT rate for some goods and services. Businesses making taxable supplies must register with the tax authorities if turnover exceeds AED 375,000 (around $100,000). VAT is charged at each step of the ‘supply chain’. Ultimate consumers generally bear the VAT cost while Businesses collect and account for the tax, in a way acting as a tax collector on behalf of the government.