Abu Dhabi, UAEMonday 17 December 2018

VAT in UAE: We explain what will happen on January 1

The countdown to the end of the UAE's tax free status is now, well and truly, on.
The government has confirmed that from 7am, January 1 2018, residents and visitors to the UAE will be liable to Value Added Tax, or VAT.
The 5 per cent levy will mean that for every dirham one spends an extra 5 fils will be added to the cost.
While most goods and services in the UAE will face the extra cost there are some sectors that are zero rated or exempt from the tax.
Education, residential real-estate, public transport and medicine will not face tax a burden however the VAT will effect almost every sector in some way.
Analysts believe the tax will add a 2.5 per cent to the cost of living in the country with the government expecting to raise Dh12 billion in revenue from the tax in the first year alone.