VAT Study Materail.pptx - VALUE ADDED TAX Introduction to VAT in the UAE and VAT implementation AGENDA GCC VAT Journey Principles Of VAT Key Questions

VAT Study Materail.pptx - VALUE ADDED TAX Introduction to...

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VALUE ADDED TAX Introduction to VAT in the UAE and VAT implementation
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AGENDA GCC VAT Journey Principles Of VAT Key Questions When Examining VAT GCC VAT Agreement/UAE VAT Law VAT Registration Process Time of supply and Place of Supply Supplies Valuation VAT Implementation Techniques VAT Impact Assessment VAT Compliance VAT Returns VAT Errors
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VAT IMPLEMENTATION Where we are now? Organization Published treaty or law? Engaged in peripheral activities? GCC Final N/A KSA Final Yes UAE Draft Yes KUWAIT No (but has published draft excise law) No QATAR No (but has publicly stated that a draft law has been approved by a Cabinet) No Bahrain No No OMAN No No
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PRINCIPLES OF VAT -Introduction VAT is borne by the final consumer VAT flows through a supply chain A tax on consumption A private, retail purchaser A business whose activities are exempt from tax A business which is not otherwise required to be VAT registered A final consumer could be:
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PRINCIPLES OF VAT -Introduction AED1000 + AED50 (VAT) AED2000 + AED100 (VAT) AED3000 + AED150(VAT ) AED4000 + AED200(VAT) AED5000 + AED250
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Consumer bears VAT in full, the tax authority would receive the VAT in stages. AED1000 + AED50 (VAT) AED2000 + AED100 (VAT) AED3000 + AED150(VAT ) AED4000 + AED200(VAT) AED5000 + AED250
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PRINCIPLES OF VAT -Introduction VAT paid by a business on its costs is referred to input VAT VAT collected by a business from their customers is called output VAT Tax payable= output VAT – Input VAT Input VAT is greater than output VAT= Tax refund The standard rate of VAT in the GCC is 5% as per the draft GCC agreement A VAT registered business will only pay the difference to the tax authority
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PRINCIPLES OF VAT -Introduction AED1000 + AED50 (VAT) AED2000 + AED100 (VAT) AED3000 + AED150(VAT ) AED4000 + AED200(VAT) AED5000 + AED250 50 - 0 = AED50 100 – 50 = AED50 150 - 100 = AED50 200 - 150 = AED50 250 – 200 = AED50
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SUMMARY OF VAT PAYMENT Organization INPUT VAT (AED) OUTPUT VAT (AED) PAYABLE (AED) Farmer 0 50 50 Factory 1 50 100 50 Factory 2 100 150 50 Stitching Unit 150 200 50 Retail 200 250 50 Customers 250 - - Total Paid to FTA AED250
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UAE VAT - Introduction Our VAT? Who? Which? Where? What about digital Services? When? And on What? How much? What not and Why? Any Deduction Special Refund Procedure What to Observe? (Territory) (Taxable Person) (Transactions) (Place of taxable transactions) (Chargeable event and Taxable amount?) (Rates) (Exemption s) (Right to deduct) (VAT Refund) (Obligation s) Digital Services
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GCC VAT AGREEMENT KEY PRINCIPLES: Each of the 6 States will draft its own VAT legislation with the principles set out in this Treaty. Each State will levy VAT on import and supply of goods and services. SCOPE . It sets the legal framework for the introduction of VAT in the six GCC States. CONTENT- It contains fifteen chapters and was signed in Feb 2017 by GCC (Gulf Co- operation Council) representatives: UAE, Kuwait, Oman, Qatar, Saudi Arabia and Bahrain RATE: . The VAT rate has been set at a standard rate of 5% for all GCC States.
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