New VAT Coming to UAE
The 7 emirates that make up the United Arab Emirates (UAE) are traditionally one of the world’s tax havens – for example, no personal income tax is levied in any of the emirates – but this is set to change slightly in early 2010, the date the UAE has earmarked for the introduction of VAT.
VAT is charged on goods and services in many nations and is an accepted form of alternative income. For example, all the EU countries charge VAT at rates that range from the lowest rate of 15% in Cyprus and the UK, and its highest rate, 25%, in Denmark.
However, the UAE has plans for a considerably lower rate for its new VAT. It will be levied at just 5%, the same rate as the current customs duty already levied on some goods in the emirates. Unlike customs duty though, VAT will be charged on all goods and services, meaning it will be a much broader tax.
This low rate of VAT has several advantages for consumers and businesses. The UAE is currently one of the world’s most appealing business locations and analysts believe that the introduction of a low-rate VAT will not change this since the emirates will continue to be a highly attractive low-tax destination. In any case, VAT is generally perceived by business as a more business-friendly tax than corporate or personal income tax.
The transition period before VAT is introduced will be used by businesses and officials in the UAE to acquaint themselves with VAT regulations and procedures, particularly VAT registration. UAE officials do not believe that the introduction of VAT will lead to a significant increase in inflation in the UAE, which currently has a rate of around 13.5%. The Economist predicts a considerably lower rate of 9% in 2010 when VAT is due to be implemented.
Financial experts believe that once the UAE introduces VAT it will not be long before other Gulf Cooperation Council members such as Bahrain, Qatar and Saudi Arabia follow suit.
For more information on overseas property investment and to find out about Obelisk's latest projects, contact Obelisk free on 0808 160 0670 (UK) or 1800 932 514 (IRE).
Email: info@obeliskinternational.com or visit our website: http://www.obeliskinternational.com./
For press enquires, please contact Obelisk’s marketing department on (+34) 952 820 319 or email press@obeliskinternational.com.
VAT is charged on goods and services in many nations and is an accepted form of alternative income. For example, all the EU countries charge VAT at rates that range from the lowest rate of 15% in Cyprus and the UK, and its highest rate, 25%, in Denmark.
However, the UAE has plans for a considerably lower rate for its new VAT. It will be levied at just 5%, the same rate as the current customs duty already levied on some goods in the emirates. Unlike customs duty though, VAT will be charged on all goods and services, meaning it will be a much broader tax.
This low rate of VAT has several advantages for consumers and businesses. The UAE is currently one of the world’s most appealing business locations and analysts believe that the introduction of a low-rate VAT will not change this since the emirates will continue to be a highly attractive low-tax destination. In any case, VAT is generally perceived by business as a more business-friendly tax than corporate or personal income tax.
The transition period before VAT is introduced will be used by businesses and officials in the UAE to acquaint themselves with VAT regulations and procedures, particularly VAT registration. UAE officials do not believe that the introduction of VAT will lead to a significant increase in inflation in the UAE, which currently has a rate of around 13.5%. The Economist predicts a considerably lower rate of 9% in 2010 when VAT is due to be implemented.
Financial experts believe that once the UAE introduces VAT it will not be long before other Gulf Cooperation Council members such as Bahrain, Qatar and Saudi Arabia follow suit.
For more information on overseas property investment and to find out about Obelisk's latest projects, contact Obelisk free on 0808 160 0670 (UK) or 1800 932 514 (IRE).
Email: info@obeliskinternational.com or visit our website: http://www.obeliskinternational.com./
For press enquires, please contact Obelisk’s marketing department on (+34) 952 820 319 or email press@obeliskinternational.com.
posted by Alison Kane at 12:07 pm
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