A 5% tax is set to be levied on the import and supply of goods and services at each stage of production and distribution.
Sheikh Hamdan bin Rashid Al Maktoum, UAE finance minister and chair of the Federal Tax Authority, said: “The value added tax, which is set to be implemented across all [Gulf Co-operation Council] countries over the next two years, will bring a new revenue stream for the national economy and GDP.
“This, in turn, will ensure consistency in the high quality of government services, to mirror the UAE’s advanced position on several global competitiveness indexes.”
Under UAE law, all supplies of goods and services will be subject to standard rate VAT except for those designated as zero rated.
Zero rating will apply when goods and services are being exported outside the GCC and to international transportation of passengers or goods, supplies of crude oil and natural gas and to education and health services.
