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Value Added Tax

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Value Added Tax (VAT)

Value Added Tax (or VAT) is an indirect tax. Occasionally you might also see it referred to as a type of general consumption tax. In a country which has a VAT, it is imposed on most supplies of goods and services that are bought and sold.

VAT is one of the most common types of consumption tax found around the world. Over 150 countries have implemented VAT (or its equivalent, Goods and Services Tax), including all 29 European Union (EU) members, Canada, New Zealand, Australia, Singapore and Malaysia.

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.
A taxable person with turnover of taxable supplies exceeding the registration of threshold defined in the local VAT legislation must register for VAT

VAR registered person must charge output VAT to their customers on the goods and services provided and recover input VAT that has been suffered on expenses and purchases which relate to their taxable outputs

Types of supplies :

  • Taxable at Standard Rate
  • Taxable at Zero rated
  • Exempt

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