FTA announces more exemptions from VAT in UAE
The Federal Tax Authority (FTA) in the UAE has revealed that selected supplies in certain sectors will be assigned zero-rated tax
The Federal Tax Authority (FTA) in the UAE has revealed that selected supplies in certain sectors will be assigned zero-rated tax.
According to a statement released by the authority, selected supplies in sectors such as transportation, real estate, and financial services will be completely exempted from Value Added Tax (VAT), due to be implemented early next year.
Certain government activities will also be outside the scope of the tax system, including activities that are solely carried out by the government and are unrelated to the private sector, including non-profit organisations.
Last month, the FTA gave updates on tax exemptions for the real estate sector, announcing that residential units will be largely exempt from VAT, with the exception of the first supply of a new residential building within the first three years of its construction.
All subsequent supplies shall be exempt, even within the first three years, but the rent or sale of a commercial part of the building will be treated as subject to VAT at 5%, according to a statement.
The UAE Cabinet is expected to issue a decision to identify the government bodies and non-profit organisations that are not subject to VAT.
As of January 2018, the UAE will seek to register all companies with annual revenues in excess of $100,000 for the tax, with some exemptions.