The answers to questions about VAT


Introduction of VAT on the territory of the UAE is regulated by two main laws – the Law “On Taxes” and the Law “On Value Added Tax”.

The Law “On Taxes” is the basis of country’s tax legislation and underlies all fiscal processes. The second law concerns specifically VAT.

There still remain some questions connected with 5% VAT.

What to do if you deal with illegal collection of taxes?
It is one of the main issues that worries many entrepreneurs. If you accidentally were subjected to illegal collection or incorrect calculation of taxes, you must know what to do with it. So, to make it you need to perform the following:

– send a request to the appropriate authorities within 20 days after receiving a notice of payment from the tax that seems to be incorrect to you;
– if the body to which you sent the complaint insists on the amount of money indicated in the tax notice, send it to the higher authority for reconsideration.

It should be noted, that authorities in the UAE informed about a reduction in the number of applications from citizens in connection with the entry into force of the value added tax.

The UAE economy minister Sultan Bin Saeed Al Mansoori declared that the number of applications from citizens decreased from 3,261 per day from the moment the law came into force (January 1, 2018) to 493 in two weeks.

A large amount of applications were sent by citizens at the first days of VAT as they faced some problems. But with time, the situation became more clear for people and it caused the reducing of fears.

The appeals from citizens concern the following main problems: rising prices, taxpayer identification numbers, and erroneous VAT charging for certain goods.

“We notified the trading enterprises and departments that people filed complaints to, and gave them time to correct violations according to tax laws,” Khalid Ali Al Bustani said.

The committee constantly monitors the market to avoid any violations, and if the detections are observed takes the necessary measures against violators.