CA Pritam Mahure has come up with a Book on  Value Added Tax (VAT) in UAE which will come into effect from 1st January 2018 with a standard Rate of 5%. The book is a compilation of GST related key legal provisions, reports and articles. Link to Download is provided at the end of the Article

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Why is the UAE implementing VAT?

The UAE Federal and Emirate governments provide citizens and residents with many different public services –including hospitals, roads, public schools, parks, waste control, and police services. These services are paid for from the government budgets. VAT will provide our country with a new source of income which will contribute to the continued provision of high quality public services into the future. It will also help government move towards its vision of reducing dependence on oil and other hydrocarbons as a source of revenue.

Book Cover Following Topics

Contents Page No.
About the book and author 10
1. Basics of indirect taxation 11
2. Primer on VAT 13
3. VAT in GCC and UAE 14
4. Five steps to be VAT ready 15
5. Eight things you must know about VAT – Birds eye view 18
6. Legislative Analysis – Birds eye view 22
7. FAQ on VAT (Issued by Ministry of Finance UAE) 24
1.1 What is Tax? 24
1.2 What is VAT? 24
1.3 What is the difference between VAT and Sales Tax? 26
1.4 Why is the UAE implementing VAT? 27
1.5 Why does the UAE need to coordinate VAT implementation with other GCC countries? 27
1.6 When will the VAT go into effect and what will be the rates? . 27
1.7 How will the government collect VAT? 28
1.8 Will VAT cover all products and services? 28
1.9 Will the cost of living increase? 28
1.10 What measures will the government take to ensure that businesses don’t use the VAT implementation as an excuse to increase prices? . 28
1.11 How can one object to the decisions of the Authority? 29
2.1 Who can or will be able to register for VAT? 30
2.2 What are the VAT-related responsibilities of businesses? 30
2.3 What does a business need to do to prepare for VAT? 31
2.4 When are businesses supposed to start registering for VAT? 32
2.5 When are registered businesses required to file VAT returns? 32
2.6 What kind of records are businesses required to maintain, and for how long? 33
2.7 How long must a taxable person retain VAT invoices for? 33
2.8 How should a business determine the place of supply? 33
2.9 Can businesses offset customs duty against VAT payments? 34
2.10 How will real estate be treated? 34
2.11 What sectors will be zero rated? 35
2.12 What sectors will be exempt? 35
2.13 Will there be VAT grouping? 36
2.14 Will there be bad debt relief? 36
2.15 Will there be a margin scheme? 36
2.16 How will partial exemption work? 37
2.17 What are the cases that would lead to the imposition of penalties? 37
2.18 Will there be any special schemes for SMEs? 38
2.19 Will there be transitional rules? . 38
2.20 How will insurance be treated? 39
2.21 How will financial services be treated? 39
2.22 How will Islamic finance be treated? 39
2.23 Can UAE nationals claim VAT? 40
2.24 How quickly will refunds be released? 40
2.25 Will FTA issue rulings or provide tax advice? 40
2.26 Will it be possible to issue cash receipts instead of VAT invoices? 40
2.27 Will there be any VAT that businesses are not allowed to claim? 41
2.28 Under which conditions will businesses be allowed to claim VAT incurred on expenses? 41
2.29 Will non-residents be required to register for VAT?. 42
2.30 Will VAT be paid on imports? 42
2.31 How will Government Entities be treated for VAT purposes? 43
2.32 Will Businesses have to report on their business in each of the Emirates? 43
2.33 Will the goods exempt from customs duties also be exempt from VAT? 44
3.1 Will tourists also pay VAT? 44
3.2 Will visiting businesses be able to reclaim VAT?. 44
4.1 How can someone access UAE Tax Law? 45
5.1 What other taxes is the UAE considering? 45
5.2 Will this impact economic growth of the UAE? 45
5.3 Where can I learn more about the UAE’s plan to implement VAT? 45
5.4 Changing my business systems for VAT reporting will cost money. Can the government help? 46
5.5 What are the penalties for not complying with a business’s VAT responsibilities? 46
8. UAE VAT Law 48
Article (1) Definitions 50
Article (2) Scope of Tax 60
Article (3) Tax Rate 62
Article (4) Responsibility for Tax 63
Article (5) Supply of Goods 63
Article (6) Supply of Services 64
Article (7) Supply in Special Cases 65
Article (8) Supply of more than one component 65
Article (9) Supply via Agent 66
Article (10) Supply by Government Entities 66
Article (11) The Cases of Deemed Supply 67
Article (12) Exceptions for Deemed Supply 68
Article (13) Mandatory Tax Registration 69
Article (14) Tax Group 70
Article (15) Registration Exceptions 72
Article (16) Tax Registration of Governmental Bodies 73
Article (17) Voluntary Registration 73
Article (18) Tax Registration for a Non-Resident 74
Article (19) Calculating the Tax Registration Threshold 74
Article (20) Capital Assets 75
Article (21) Tax De-Registration Cases 75
Article (22) Application for Tax De-Registration 76
Article (23) Voluntary Tax De-registration 76
Article (24) Procedures, Controls and Conditions of Tax Registration and Deregistration 76
Article (25) Date of Supply 77
Article (26) Date of Supply in Special Cases 78
Article (27) Place of Supply of Goods 79
Article (28) Place of Supply of Water and Energy 80
Article (29) Place of Supply of Services 81
Article (30) Place of Supply in Special Cases 81
Article (31) Place of Supply of Telecommunication and Electronic Services 83
Article (32) Place of Establishment . 83
Article (33) The Agent . 84
Article (34) Value of Supply 84
Article (35) Value of Import 86
Article (36) Value of Supply for Related Parties 86
Article (37) Value of Deemed Supply 87
Article (38) Tax-Inclusive Prices 88
Article (39) Value of Supply in case of Discount or Subsidies 88
Article (40) Value of Supply of Vouchers 88
Article (41) Value of Supply of Postage Stamps 88
Article (42) Temporary Transfer of Goods 89
Article (43) Charging Tax based on Profit Margin 89
Article (44) Supply and Import Taxable at Zero Rate 90
Article (45) Supply of Goods and Services that is Subject to Zero Rate 90
Article (46) Supply Exempt from Tax 92
Article (47) Supply of More Than One Component 93
Article (48) Reverse Charge 93
Article (49) Import of Concerned Goods. 96
Article (50) Designated Zone 96
Article (51) Transfer of Goods in Designated Zones 96
Article (52) Exceptions for Designated Zone 96
Article (53) Due Tax for a Tax Period 97
Article (54) Recoverable Input Tax 97
Article (55) Recovery of Recoverable Input Tax in the Tax Period 98
Article (56) Input Tax Paid before Tax Registration 99
Article (57) Recovery of Tax by Government Entities and Charities 100
Article (58) Calculating the Input Tax that may be Recovered. 100
Article (59) Conditions and Mechanism of Input Tax Adjustment 101
Article (60) Capital Assets Scheme 101
Article (61) Instances and Conditions for Output Tax Adjustments . 102
Article (62) Mechanism for Output Tax Adjustment 103
Article (63) Adjustment due to the Issuance of Tax Credit Notes 104
Article (64) Adjustment for Bad Debts 104
Article (65) Conditions and Requirements for Issuing Tax Invoices 105
Article (66) Document of Supplies to an Implementing States 106
Article (67) Date of Issuance of Tax Invoice 107
Article (68) Rounding on Tax Invoices 107
Article (69) Currency Used on Tax Invoices 107
Article (70) Conditions and Requirements for Issuing Tax Credit Note. 108
Article (71) Duration of Tax Period 109
Article (72) Submission of Tax Returns 109
Article (73) Payment of Tax 110
Article (74) Excess Recoverable Tax 110
Article (75) Tax Recovery in Special Cases 111
Article (76) Administrative Penalties Assessment 112
Article (77) Tax Evasion 113
Article (78) Record-keeping 113
Articles (79) Stating the Tax Registration Number 115
Article (80) Transitional Rules 115
Article (81) Revenue Sharing 116
Article (82) Executive Regulation . 116
Article (83) [Tax Procedure Law]. 117
Article (84) Cancellation of Conflicting Provisions 117
Article (85) Effective Date of this Decree-Law and its Application 117
9. Law on Tax Procedures 118
Article (1) Definitions 120
Article (2) Scope of Application of the Law 123
Article (3) Objectives of the Law 123
Article (4) Record Keeping 123
Article (5) Language 124
Article (6) Tax Registration, Tax De-registration and Amendments of Data related to Tax Registration 124
Article (7) The Legal Representative 125
Article (8) Tax Return Preparation and Submission 125
Article (9) Specifying Payable Tax when Settling 126
Article (10) Voluntary Disclosure 127
Article (11) Methods of Notification 128
Article (12) Register of Tax Agents 129
Article (13) Tax Agents Registration 129
Article (14) Conditions of Registration in the Register 129
Article (15) Appointment of a Tax Agent . 130
Article (16) Person’s Records with the Tax Agent 131
Article (17) The right of the Authority to perform a Tax Audit 131
Article (18) The Right of the Authority to Access the Original Records or Copies Thereof During a Tax Audit. 133
Article (19) Timing of the Tax Audit 133
Article (20) New Information Surfacing after a Tax Audit 133
Article (21) Cooperation during the Tax Audit 134
Article (22) The Audited Person’s Rights 134
Article (23) Notification of the Tax Audit Results 134
Article (24) Tax Assessments 135
Article (25) Administrative Penalties Assessment 136
Article (26) Tax Evasion Penalties . 138
Article (27) Procedures for Application for Reconsideration 104
Article (28) Tax Disputes Resolution Committee 141
Article (29) Jursidictions of the Committee 141
Article (30) Procedures for Submitting Objections 142
Article (31) Procedures of the Committee 142
Article (32) Enforcement the Committee’s Decision 143
Article (33) Challenge Procedures before Courts 143
Article (34) Application for Tax Refunds 144
Article (35) Tax Refund Procedures 144
Article (36) Collection of Payable Tax and Administrative Penalties 145
Article (37) Obligations of the Legal Representative 146
Article (38) Responsibility of Settlement in the Case of a Partnership 146
Article (39) Tax and Administrative Penalties Settlement in Special Cases 146
Article (40) Settlement of Tax in Bankruptcy Case 147
Article (41) Professional Confidentiality 148
Article (42) Statute of Limitation 149
Article (43) The Authority’s Right to Claim 149
Article (44) Time Limit for Tax Obligations 150
Article (45) Calculation of Timeframes 150
Article (46) Reduction of or Exemption from Administrative Penalties 150
Article (49) Conflict of Interest 151
Article (50) Judicial Officers 152
Article (51) Authority Fees 152
Article (52) Repeal of Conflicting Provisions. 152
Article (53) Executive Regulations 152
Article (54) Publication and Coming into Force of this Law 152
10. GST – International Scenario 154

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