The final VAT regulations announced last month have helped clear the air for investors and auditing companies in the UAE. Set to be introduced across the Gulf countries, VAT has been set at 5 percent on a host of products, but certain segments have been exempted, such as basic consumer goods, healthcare, and education, etc. The new law also assigns responsibilities to eligible resident taxable persons including non-residents and investors and their agents as well as nominated representatives who will have to register and ensure specified compliance.
Here are five things you need to know about the revised tax law:
- All taxable persons are required to register under the respective country’s law i.e., VAT and excise, and apply for a Tax Registration Number (TRN) within a stipulated time frame once the new laws are published in UAE, which is expected soon.
- There has to be the registration and appointment of tax agents and/or a legal representative, who will be responsible for all compliances and for tax payable on behalf of their principals.
- There are strict penalties for non-compliance including prison terms for key management personnel/owners, who is responsible for compliance and also fines up to five times of the tax due and payable by each taxable person and/ or entity, who is in default including any wilful default of any tax provisions.