14 July 2024

carvy

2 years of VAT in UAE

Two years have passed since UAE implemented VAT. Even though people were initially sceptical about VAT and its effects on business and their personal purchases, they have got accustomed to it. The increase in the number of registrations shows how successful the implementation has been.

According to federal Tax Authority, more than 300,000 individuals and tax groups have registered for VAT in the last two years.

The FTA received 3.2 million electric tax refund applications for tourists by the end of 2019. This shows an increase of 1.68 million applications with a growth of 110.53 percent, as compared to the second half of 2019, where 1.52 million applications were received by the end of June.

There was a 2.64-fold increase in daily average number of tax refund applications for tourists. In the first month of application, it was 372,000, which increased to 983,000 a day in December 2019.

According to Khaled Al-Bustani, the director general of the FTA, “The FTA started implementing the VAT refund mechanism for foreign visiting businesses as of last April. The mechanism has witnessed remarkable activity and steady growth in its operations.”

“The number of VAT refund requests dealt with through this mechanism reached 105, with a total monetary value exceeding AED 28.7 million, enhancing the attractive environment for investments to support economic activities,” he added.

VAT was introduced in UAE on 1st January 2018, at a standard rate of 5 percent.

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