The Value Added Tax will take effect in the United Arab Emirates beginning January 1, 2018. A flat 5% tax will be levied on many consumer goods while some sectors such as education, healthcare, transportation, real estate, and oil and natural gas production are either zero-rated or exempt. But not all expenditures, even in these categories, some are exempt or zero-rated, so care should be taken to understand the new tax. In healthcare, for example, some medicines may be taxed, and procedures undertaken for cosmetic reasons are subject to the

Amidst the speculation concerning the possible increases in prices and the cost of living when the new Value Added Tax takes effect on January 1, 2018, changes in reporting practices are also a serious concern for businesses in the United Arab Emirates.

According to Gulf News, substantial penalties will be incurred by those who do not follow the registration and reporting practices mandated by the FTA.

The penalty for failure to submit a registration application, for those required by law, will be Dh 20,000. The penalty for failure to submit tax-related data,

The UAE’s widely anticipated VAT law has come into effect on January 1, 2018. The tax rate is pegged at a modest 5%. Officials are hopeful that the new law will be the means of diversifying the UAE’s economy. Other GCC (Gulf Cooperation Council) countries are slated to follow suit with their own VAT laws by 2019.

Education and healthcare are zero-rated as per the new UAE VAT. The tax will allow the UAE to continue providing important government-funded public services such as medical care, sanitation services, recreational parks, law enforcement

On January 1, 2018, a Value Added Tax (VAT) of 5% will be added to consumer goods in countries that are a part of the Gulf Cooperation Council (GCC). In the UAE this tax is expected to increase revenue for public services and decrease the country’s dependence on funds from oil and other hydrocarbons.

According to Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and Minister of Finance, the first step businesses need to take to comply with the new tax is to create an account online via