Shuraa Tax Blog

Category: Dubai Tax System

  • The Importance of a Reliable Tax Agency for UAE Companies

    The Importance of a Reliable Tax Agency for UAE Companies

    The United Arab Emirates is popular worldwide for its profitable tax regimes for businesses of all sizes and kinds. In fact, it is one of the many reasons why entrepreneurs and businessmen want to set up or expand their businesses in the UAE. Globally renowned for its oil business, the UAE has worked systematically to break the shackles and transform itself into a modern state that caters to businesses on a wide spectrum. And one of the ways it has managed to achieve the status of a business hub is by reforming its policies, including its tax regimes.  

    To strengthen and maintain its position, the UAE has several tax regimes in place. These regimes also ensure that businesses here maintain a highly professional environment and strive to meet international standards. Although the UAE does not levy any income tax on individuals, it levies taxes on companies under certain conditions. And while the tax system may look straightforward, it is always better to get some assistance from a reliable tax agency in UAE. But why? Read on.  

    This blog will walk you through all you need to know about a tax agency – what it is, why it is important to partner with a reliable agency, and more.  

    What Is a Tax Agency in the UAE? 

    Simply put, a Tax Agency is an entity that is registered with the Federal Tax Authority (FTA) and has a valid license to operate as a tax agency.  

    Furthermore, a company cannot register and work as a Tax Agency without having at least one FTA-accredited Tax Agent on staff. Likewise, a registered tax agent must be affiliated with a licensed tax agency before being permitted to work as a tax agent. 

    Who Is a Tax Agent? 

    The UAE Federal Decree-Law describes and defines a tax agent as — 

    Any natural person registered with the authority in the register of Tax Agent who is appointed on behalf of another person to represent him before the authority and assist him in the fulfilment of his tax obligations and the exercise of his associated tax rights. 

    Simply put, they are licensed and FTA approved specialists qualified to represent your company before the authorities. They are there to offer you comprehensive tax-related support, so your company is compliant from the start. 

    Read Also: Dubai Import Tax: A Complete Guide for Businesses

    Why Should You Partner With a Reliable Tax Agency for your UAE business? 

    Given the strict laws and the penalties outlined by the UAE government for operating companies, it is important that you stay compliant with the laws at all times. Furthermore, you must register and file your tax returns within the stipulated time to avoid hefty penalties. And for this, you must have in-depth knowledge of the tax system since the UAE categories taxes as –  

    • Corporate Tax – For businesses or individuals operating with a commercial license in UAE Free Zones and Mainland.
    • Excise Tax – Levied on businesses dealing in excise goods (goods harmful to human health and the environment).
    • Value Added Tax – Levied at point of sale for the use of goods and services.
    • Other Taxes – Levied on tourist facilities and hotel businesses. For instance, Municipality tax. 

    Within these taxes, especially for Corporate tax, UAE follows a slab structure. The question is: Do you, as an entrepreneur or businessman, have the in-depth knowledge to follow proper tax rules? Are you updated with the latest changes, and do you understand key terms? Do you have internal control mechanism to file VAT return complaint with Tax laws?  

    This is why choosing a reliable tax agency is important. A reliable tax agency is a tax agency that:  

    • Holds a valid license.  
    • Has a team of registered tax agents? 
    • Has a proven track record?
    • Has in-depth knowledge of UAE tax regimes, processes, and penalties? 
    • Is up to date with the latest announcements.

    But why do you need to partner with them? Because a reliable tax agency in UAE will –  

    • Always operate and represent the company lawfully and in compliance with the Federal Tax Authority
    • Ensure that your business activities are compliant with the obligations.  
    • Assist with the timely filing of tax returns. 
    • Register your company with the FTA and lawfully represent you. 
    • Guide you.
    • Assist you with formalities and advise you on how to stay out of trouble and minimise fines.
    • Provide the FTA and its inspectors with essential legal and accounting information if the authorities ask you for records 
    • Forewarn you about changes to both the business and tax legislation 
    • Make communication easier and provide quick answers while following up with the Federal Tax Authority (FTA) 

    Besides this, partnering with a reliable tax agency will save you time and effort. A company’s tax concerns are varied, ranging from registering, planning, filing, and consulting. As a result, allocating resources and managing tax affairs becomes a time-consuming and expensive endeavour. By partnering with a tax agency, you can save time and money while benefiting from their in-depth understanding of and experience working with various clients. 

    Partner With Shuraa for Tax Compliances  

    Awareness of tax compliances differs greatly from ensuring that your company is tax compliant. The process can be overwhelming, especially when you have to wear multiple hats as an entrepreneur and businessman.  

    Furthermore, failing to meet the tax requirements can result in strict action against your company. Additionally, you must follow the procedure and apply for voluntary disclosures in the event of indifference. Under particular circumstances, you can also be required to submit an objection to the Tax Disputes Resolution Committee (TDRC).  

    A reliable tax agency like Shuraa Tax Consultants and Accountants can advise and assist you. We will ensure that your company follows all the tax obligations by filing your return on time, efficiently communicating with the FTA, and legally representing you wherever and whenever required.  

    Our cordial ties with the ministry enable us to stay current on the many commercial legislation and tax regulations applicable to the UAE. We also guarantee that your company is ready for potential economic repercussions. We will take care of everything for you. All you need to do is reach out to us on info@shuraatax.com or give us a call on +971 508912062.

  • Tax Compliances in UAE: Latest Updates

    Tax Compliances in UAE: Latest Updates

    Tax compliance in the UAE has become an important part of running a business. Over the years, the country has introduced structured tax systems such as VAT, Corporate Tax, and Excise Tax. Even though the UAE is still known as a business-friendly destination, companies are now expected to follow clear tax rules and meet regular reporting requirements.

    Staying compliant helps businesses avoid penalties, reduce risks, and keep their operations running without interruptions. Simple mistakes like late filings, incorrect returns, or missing updates can create unnecessary problems. Understanding how UAE taxes work and what’s currently required can save both time and money in the long run.

    UAE tax regulations are updated from time to time, with new rules, clarifications, and compliance deadlines announced by the Federal Tax Authority (FTA). These changes can affect how you file returns, keep records, or calculate taxes.

    What are the Different Kinds of Taxes Applicable in the UAE?

    Over the past few years, the UAE has introduced new tax laws to align with global standards while maintaining its position as an attractive place to do business. Knowing which taxes apply to you is the first step toward staying compliant.

    1. Corporate Tax (CT)

    Corporate Tax is a direct tax on business profits. While the 9% rate is low by global standards, the rules around who pays what are becoming more detailed.

    The 9% Threshold:

    You only pay the 9% rate on profits above AED 375,000. If your profit is below this, your rate is 0%, but you still must register and file a return.

    Small Business Relief (SBR):

    If your annual revenue (total sales, not just profit) is AED 3 million or less, you can elect to be treated as having zero taxable income until the end of 2026. This means no tax and much simpler paperwork.

    Free Zone Rules:

    Companies in Free Zones can keep their 0% tax status on “Qualifying Income.” However, they must now maintain “Substance” (having a real office and employees in the zone) and have their accounts audited by a certified firm.

    2. Value Added Tax (VAT)

    VAT is a consumption tax charged on most goods and services in the UAE. Businesses that cross the mandatory registration threshold must register for VAT, charge it on taxable supplies, and file regular VAT returns with the Federal Tax Authority. Some supplies are zero-rated or exempt, depending on the nature of the activity.

    The Mandatory Limit:

    You must register for VAT if your taxable sales/imports hit AED 375,000 over the last 12 months.

    3. Excise Tax

    Excise Tax is applied to specific goods that are considered harmful to health or the environment, such as tobacco products, energy drinks, and sugary beverages. Businesses involved in manufacturing, importing, or storing excise goods must comply with strict registration, reporting, and payment requirements.

    Sugar-Based Tiers: Instead of a flat 50% tax on all sweet drinks, the tax is now based on grams of sugar per 100ml:

    • High Sugar (8g+): AED 1.10 per litre.
    • Medium Sugar (5g–8g): AED 0.80 per litre.
    • Low/Zero Sugar: 0% tax (though artificial sweeteners must still be registered).

    The 100% Club: Tobacco products, electronic smoking devices, and energy drinks remain taxed at a flat 100% of their retail price.

    4. Withholding Taxes (WHT)

    Withholding tax is a tax collected by the payer (like a business) on behalf of the recipient (like a foreign supplier). Currently, the UAE has set the WHT rate at 0%. This is a major advantage for companies that hire foreign consultants or pay royalties abroad, as it keeps cash flow moving freely.

    For very large multinational groups (earning over €750 million globally), a new Domestic Minimum Top-up Tax ensures they pay at least a 15% effective tax rate in the UAE, aligning with global efforts to prevent tax avoidance.

    5. Other Relevant Levies

    While not always called taxes, these fees are part of your ‘cost of doing business’ in the UAE:

    • Customs Duties: Most goods imported from outside the GCC face a 5% duty. Note that many Free Zone companies are exempt from this unless they sell their goods into the local UAE market.
    • Property Transfer Fees: In Dubai, for example, there is a 4% fee on the sale value of property. This is usually split 50/50 between the buyer and seller, though contracts can vary.
    • Digital Transformation Fees: The FTA has cancelled fees for paper certificates. Tax Registration Certificates are now issued as free digital copies with QR codes for instant verification.

    Recent Corporate Tax Updates in the UAE (As of 2026)

    The UAE’s corporate tax system has been rapidly evolving since its introduction in 2023.

    The First Major Filing Deadlines are Here:

    For many businesses, 2026 is the year the first tax return is actually due. The deadline is strictly nine months after the end of your financial year.

    • January–December Financial Year: If your first tax period ended on December 31, 2025, your filing and payment deadline is September 30, 2026.
    • April–March Financial Year: If your period ends March 31, 2026, your deadline is December 31, 2026.

    Note: Even if your profit is zero or you qualify for relief, you must still file a return.

    Small Business Relief (SBR):

    The Small Business Relief remains the most vital tool for startups, but it has a built-in expiration date. Resident businesses with revenue of AED 3 million or less can elect to be treated as having “zero taxable income.” This relief is currently set to apply only for tax periods ending on or before December 31, 2026.

    If you choose SBR, you cannot carry forward any tax losses or net interest expenses to future years. Businesses expecting high growth in 2027 should weigh whether it’s better to pay a little tax now to save their losses for later.

    Latest VAT Compliance Changes in the UAE (As of 2026)

    The UAE has introduced a set of important updates to its Value Added Tax (VAT) rules to make compliance clearer, strengthen enforcement, and align the system with international standards.

    Five-Year Deadline for VAT Credits & Refunds:

    A major compliance update is the introduction of a five-year limitation period to claim or use excess VAT credits and refunds. After this period, any unused VAT credit will expire permanently if not claimed or offset.

    This means that VAT refunds must be claimed within 5 years from the end of the relevant tax period. Legacy VAT credits that will expire soon may need immediate action.

    Launch of the E-Invoicing System (EIS):

    The UAE is moving away from PDFs and paper. Starting in July 2026, the government will begin testing a national e-invoicing system. Invoices will be sent to the FTA in real-time as they are issued, making manual errors much riskier. If an invoice is not issued through the approved system once it becomes mandatory for your tier, it may be considered invalid, and the buyer will be denied the right to recover input VAT.

    No More Self-Invoicing for Reverse Charge:

    Under the updated rules, businesses applying the reverse charge mechanism no longer need to issue internal self-invoices for these transactions. This reduces a significant administrative step, especially for importers and companies receiving cross-border services.

    Stronger Anti-Evasion Controls:

    To protect the tax base, the FTA now has clearer powers to deny input tax deductions that are linked to fraudulent or artificial transactions. This aligns with global efforts to tighten anti-avoidance measures and promotes honest reporting.

    Updates on Excise Tax in the UAE (As of 2026)

    Excise Tax in the UAE continues to evolve in 2026, with key changes aimed at improving public health outcomes, tightening compliance, and making the tax system more transparent and predictable for businesses.

    Introduction of a Tiered Sugar-Based Excise Tax:

    As of January 1, 2026, the old 50% flat tax on all sweetened drinks has been replaced. The tax is now volumetric, meaning it is charged as a fixed amount of Dirhams per litre, depending on how many grams of sugar are in the drink.

    Category Sugar Content (per 100ml) 2026 Tax Rate
     High Sugar  8 grams or more AED 1.10 per litre
     Moderate Sugar  5 to 7.99 grams  AED 0.80 per litre
     Low / Zero Sugar  Less than 5 grams 0% (Exempt)

    Artificial sweeteners (like Stevia or Aspartame) do not count as sugar in this calculation. If a drink uses only artificial sweeteners and has 0g of real sugar, it qualifies for the 0% tax rate.

    Category Shift for Carbonated Drinks:

    In a big change for 2026, Carbonated Drinks are no longer a separate excise category. Previously, all sodas were taxed at 50% just for being bubbly. But now, they are simply treated as Sweetened Drinks. If a brand reformulates a soda to have less than 5g of sugar, it can now be sold excise-free, even if it is still carbonated.

    Mandatory Lab Certification:

    You can no longer just claim your drink is low sugar. To benefit from the lower tax tiers, businesses must:

    • Obtain a Lab Report: All products must be tested by a MOIAT-accredited laboratory (such as Dubai Central Lab or SGS).
    • Register the Certificate: This report must be uploaded to the FTA’s EmaraTax portal.

    Transitional Relief and Excise Tax Deductions:

    The UAE’s tax authorities have also introduced specific provisions under FTA Decision No. 11 of 2025 that allow businesses to claim limited deductions where excise tax was previously paid under the old rules, but the new tiered model results in a lower tax amount – provided certain conditions are met (e.g., products remain unsold and proper documentation is supplied).

    Tips for Smooth Tax Compliance in the UAE

    Here are some expert-backed tips to help you stay on track.

    1. Don’t Treat Compliance as a One-Time Task: Tax and regulatory compliance is ongoing, not something you handle only at year-end. Track deadlines throughout the year for VAT, Corporate Tax, and UBO. Review compliance requirements whenever there’s a business change (new activity, revenue growth, expansion).
    2. Maintain Accurate and Updated Records: Clean and well-organised records form the backbone of tax compliance. Keeping proper invoices, contracts, bank statements, and accounting records makes filings smoother and protects businesses during audits or reviews.
    3. Use the Right Accounting and Compliance Tools: Reliable accounting software helps businesses track transactions accurately, prepare tax returns efficiently, and meet deadlines with confidence. With digital initiatives such as e-invoicing gradually rolling out, preparing systems early can save time and prevent disruptions later.
    4. Conduct Periodic Internal Reviews: Regular internal reviews help identify gaps or errors before they become serious issues. Reviewing tax returns, compliance filings, and supporting documents from time to time allows businesses to correct mistakes proactively and stay aligned with regulatory expectations.

    Bonus Tip: Get Professional Support to Stay Fully Compliant

    Even with the best internal processes, tax compliance in the UAE can become complex, especially with regular updates to Corporate Tax, VAT, Excise Tax, UBO, and reporting requirements. This is where professional support can make a real difference. Shuraa Tax supports businesses with end-to-end taxation services in the UAE. From Corporate Tax and VAT registration to return filing, compliance reviews, advisory, and audit support, the team helps businesses stay aligned with UAE tax laws at every stage.

    With expert guidance, businesses can avoid costly mistakes, stay updated with regulatory changes, and focus more on growth instead of compliance stress.

  • How to Select a Reliable Bookkeeping & Accounting Partner for your Business in Dubai?

    How to Select a Reliable Bookkeeping & Accounting Partner for your Business in Dubai?

    Accounting is a core aspect of any business. Professionally and precisely maintained books can help a business streamline their finances and even save big on taxes and fines. Moreover, accounting and bookkeeping are crucial for regulation & compliance. For instance, the new VAT laws in UAE require the companies to maintain books as per the new guidelines! SMEs or a start-up might not find it convenient and financially viable to hire an in-house accountant. It makes sense to seek assistance from a professional bookkeeping and accounting partner.

    If you’ve set up a company or are planning for the same, this article will help you choose the right tax consultant in Dubai or right accounting firm.

    Here, you will learn about the top factors to consider before choosing amongst reliable Accounting Services in UAE or tax services in UAE. Let us get going!

    Team & Expertise

    It pays to get associated with a versatile & capable accounting firm and tax agency in UAE that possesses experience in legal, financial & economic domains of the UAE market. The reason behind looking for such bookkeeping expertise is transition of the economy into new tax structures & regulatory changes. For instance, Shuraa Tax Consultants and Accountants bring in robust & reliable accounting outsourcing services. The team is adept in handling any volume of accounting tasks within a short turnaround.

    Industry & Service Specialization

    You must also assess two areas of specialization for any bookkeeping firm- 1) Industries served & 2) service specialization. Find out if the firm serves clients from a particular industry or serves everyone. If they specialize in your industry, it is a best reason to partner with them. If they turn out to serve versatile businesses, then look for their service specialization. Bookkeeping firms usually specialize in Accounting, Tax, VAT & Audit services. You must select the one that caters to your area of interest.

    Availability & Support

    You must look for an accounting & bookkeeping firms that keeps in touch with your business frequently. Which can give the contemporary reports. This enables you, as a business owner, to make quick decisions, solve tax/cost doubts & bolster your planning for further business growth. Accounting firms like Shuraa, that provide regular communication support & guidance to its clients has the following benefits.

    • Stay updated on any anticipated UAE Tax regulations changes
    • Proactive planning for your business growth from a tax perspective
    • Get expert advice whenever you want
    • Professional MIS reports for better decision making
    • Report discussions, meetings with client

    Fee Charging Structure

    You must evaluate the fees structure of different firms to outsource your accounting needs. The fee will vary for each of them (your cost of outsourcing) and the way they charge it will differ too. Payment terns should also be checked. Assess your major accounting needs and outsource your accounting accordingly.

    The right accounting partner will provide you end-to-end support besides the core bookkeeping services. Thus, it is crucial that you ally with an experienced firm with a sizable client portfolio. Outsourced accounting services helps to have accurate accounts which are reviewed by qualified Accounts professional.

    Keep in mind the above factors and do ask these questions to the shortlisted firms for selecting the right accounting partner in Dubai. Get in touch with the expert consultants at Shuraa Tax, one of the top accounting and tax firms in Dubai, specialized in Accounting, VAT, Excise, Internal Audit, Economic Substance Regulation (ESR) compliance, Business Valuations. Reach out to our experts on info@shuraatax.com or give us a call on +971 508912062.

  • Everything You Need to Know About VAT Returns and Payments

    Everything You Need to Know About VAT Returns and Payments

    VAT returns and payment is the medium to report the total amount of VAT payable or VAT receivable for the tax period to the Federal Tax Authority (FTA). The taxable person needs to submit their VAT return by the end of each tax period. There’s a certain procedure that businesses must follow while filing their VAT return. Let’s know everything about it in detail. 

    What is a VAT return?

    VAT returns & payment comprises the total value of supplies and purchases made by a taxable person during the VAT period and related VAT. This highlights the taxable person’s VAT liability/ VAT refund defined as a difference between total output tax charged to a taxable person on supplies of goods and services and input tax recovered on the purchases made. If the output tax over the input tax, then the difference becomes the amount payable to the Federal Tax Authority (FTA). When this input tax amount exceeds the output tax, the excess amount is the amount refundable to the taxable person. 

    When should I submit my VAT return & make payments?

    Following the end of the tax period, on the 28th day of the month, the FTA should receive the VAT return from the taxable person. In case there’s a weekend or a public holiday on that date, the taxpayer must file the return and pay VAT liability on or before the next working day. Also, if you decide to deregister for VAT, you need to provide your last VAT return for till the last return period, as specified by the FTA.

    To answer your any other VAT related query contact Shuraa, one of the best agencies delivering effective VAT consulting services to its clients. 

    How do I submit a VAT return?

    It’s easy to file a tax return in UAE. Log in to the FTA EmaraTax portal using your authentic username and password. Then, the next step is to go through the navigation menu and start with the filing process. Either the taxable person, or a tax agent, or an authorized legal representative can file the return.

    Shuraa Tax and Accounting Services LLC is a professional Accounting and Tax consulting Company which through its qualified team of Chartered accountants offers the clients with reliable services in VAT, accounting, Tax agencies in UAE.

    VAT returns & payment: Inclusions

    There are important details that are relevant when filing for your VAT returns & payment.

    1. Check and confirm the auto-populated details of the taxable person and tax period
    2. Value of supplies at the standard rate and VAT amount
    3. Value of exempt supplies and zero rates made in the tax period made during the tax period
    4. Value of any supplies subject to reverse charged basis VAT made during the tax period
    5. Expenses incurred with which the taxable person is entitled recovers the amount of input tax. 
    6. Total tax amount that is due and is recovered during the tax period
    7. Value of the payable and repayable tax during the tax period

    Contact Shuraa to know in detail about the procedure of VAT registration, UAE. 

    How do I make a VAT payment? 

    The Federal Tax Authorities (FTA) must receive the payments before the deadline date of the VAT returns i.e. 28th day (or following day – if it is public holiday/weekend) after the end of the tax period. There are various methods for payment like you can use e-services like e-Dirham payment method or a credit card, or a bank-to-bank transfer. If you are making payments via an e-dirham card, you will incur an extra charge of AED 3. However, if you use a credit card then there is a charge of 2-3% of the total payable amount.

    Conclusion

    The experts of Shuraa Tax will help you will all your return filings in a timely and efficient manner. Our range of services cover everything from VAT Registration, Return Filing, tax invoices, and more. Together, we will help to take your business to new zeniths. Call or text us at +971 508912062 or send an email to info@shuraatax.com.

  • What are the benefits of a UAE Tax Agent?

    What are the benefits of a UAE Tax Agent?

    Tax Agent is “An agent registered with the Authority, who is appointed by a person to act in his name and on his behalf regarding his tax affairs to represent him before the Authority and assist him in fulfillment of the tax obligations.

    The definition and provision related to Tax Agent are clearly defined in Article 12, 13,14,15,16, Chapter 2 of Federal Law Number 7 of 2017 on Tax Procedures.

    Tax Agents basically help taxable people to meet the requirements that are set by the government for the tax system. The responsibility of a tax agent is to enable the Company to fulfill the tax compliance effectively.

    Benefits of a UAE tax agent are listed below:

    • A UAE Tax Agent offers freedom from legal representation, as a Tax Agent will always act and represent the Company legally and be in accordance with the Federal Tax Authority (FTA).
    • UAE Tax Agents ensure that the taxable persons are complying their obligations as tax-registered businesses.
    • Tax agents represent the taxable Companies by registering the Companies with the FTA. Tax Agent helps in submitting tax returns in a timely manner.
    • UAE Tax Agents can be contacted by the taxable entities for tax advice. Tax Agent does not only help through the procedural matters but also guides the Companies to avoid any unforeseen events or fines.
    • Tax Agent can also represent foreign companies that do not have their establishment/offices in the UAE. On behalf of the foreign Company, the Tax Agent collects the tax amount from their customers and makes the payments to the Federal Tax Authority (FTA).
    • Having a Tax Agent in UAE is also beneficial as they are aware of the latest amendments in the commercial and tax laws. They caution the companies beforehand as well as help to maintain the integrity of the country’s tax system.
    • As per Article 16, Chapter 2 of Federal Law Number 7 of 2017 on Tax Procedures, FTA may request for any tax-related information, documents or records related to tax affairs of the Company represented by him. A Tax Agent can assist the taxable entities in case of an inspection by the Authority and provide relevant legal and accounting details to the FTA inspector.
    • Having a Tax Agent also eases the communication, follow up with the Federal Tax Authority (FTA) and offers quick solutions.

    Need to know more about a tax agent in Dubai or to connect with a tax agent, contact Shuraa Tax Consultants. Call us on +971508912062. You can also email us your query on info@shuraatax.com or log on to www.shuraatax.com for more information.

  • FTA creates three categories to classify eligible good

    FTA creates three categories to classify eligible good

    In a press release published by the Federal Tax Authority (FTA) recently, they determined the three main categories of ‘eligible goods’. The eligible goods were classified for calculating the VAT – Value Added Tax in the UAE. VAT on the eligible goods will be calculated based on the profit margin scheme.

    The classification of edible goods are stated below –

    • Second-Hand Goods – Such as tangible moveable property, suitable for future use or upon repair.
    • Antiques – Goods that are older than 50 years.
    • Collectors’ Items – Such as stamps, coins, currency, scientific pieces, historical or archaeological artifacts, etc.

    FTA in the press release also noted that only the goods which had been subject to VAT before the supply may be subject to the profit margin scheme. The FTA also defined the profit margin scheme, they said that it will be considered as the difference between the buying and selling price of the item which includes taxes.

    The initial announcement about the eligible goods under the profit margin scheme was made in a “Public Clarification” as per the Federal Decree-Law No. (8) on Value Added Tax.

    Reportedly, the FTA informed the registered businesses to carefully verify eligible goods for the profit margin scheme. As a result, stock on hand of used goods that were attained prior to the effective date of Federal Decree-Law No. (8) on the VAT, or goods that have not previously been subject to VAT for other reasons, are not eligible to be sold under the profit margin scheme. VAT is, therefore, due to the full selling price of these goods, the release stated.

    The press release further explained that registered businesses may apply the scheme to eligible goods in situations such as:

    • If the goods were purchased from either a person who is not registered for VAT or a Taxable Person who calculated VAT on the supply by reference to the profit margin,
    • If the taxable person made a supply of goods where input tax was not recovered in accordance with Article 53 of Cabinet Decision No. (52) of 2017.

    The press release also said that a taxable person will not be allowed to apply the profit margin scheme in cases where they had issued a tax invoice or any other document mentioning an amount of VAT chargeable. They further mentioned that Taxable Persons must keep inventory and similar documents that clarify the situation of every item bought or sold. Also, purchase invoices with complete details of items bought under the profit margin scheme must be specified.

    If you are still not clear on the profit margin scheme or would want to know how to impose VAT in UAE simply contact Shuraa Tax Consultants for more details. You may call us on +971508912062.

    You may also drop in an email will your queries on info@shuraatax.com or chat for free will a live tax consultant on www.shuraatax.com.