Dubai Authorities: The VAT Rate Will Remain at 5% for Five Years

Updated on Saturday 24th March 2018

After a recommendation made by the IMF (International Monetary Fund) and in agreement with the local financial authorities, the UAE has recently introduced the value added tax of 5% on several types of products and services. If you want to know more about how this tax will affect your business in Dubai, you may address to our team of accountants in Dubai.
 

Enjoying no VAT increase in the UAE


The current VAT in Dubai is set at 5% and imposed on unhealthy products and several luxury products since January 2018.  According to the financial authorities in the UAE, the collected tax will be used for future developments and projects made to sustain the country’s excellent status. The same authorities have recently declared that there will be no VAT increase for at least five years. The same is available for the excise tax which at the moment represents 50% of the product price. On the other hand, it has been raised the fact that there are chances to introduce the income tax in the UAE, but there are no certain grounds in this sense and no studies related.

Companies or business persons who want to know more about the new taxation system in the UAE can talk to one of our Dubai accountants. Moreover, our team can perform audits in Dubai for small or large companies.
 

Will there be any corporate tax in Dubai besides the VAT?


If for the moment, the VAT is the only important tax to consider in Dubai, there have been debates about the implementation of the corporate tax, but it is to early to consider such talks. The financial authorities in the UAE believe it is not the time to discuss the introduction of a corporate tax, as the VAT and the excise tax have been recently implemented in the country. On the other hand, the authorities consider that in this stage, there will be several studies linked to a probable framework in the future.

For more information about the VAT in Dubai and the categories involved, you may contact our accounting firm in Dubai.