General Implications on VAT

Value Added Tax is known as VAT. As the value of goods and services gradually rises at different phases of production, sales, and marketing, a general consumption tax is imposed.

While the government has tentatively set the VAT percentage at 5% with effect from January 2018, a few things are exempt in Dubai.

Impact of various functions

Procurement and production

• Pricing of the supplier
• Processing time for A/P invoices
• Purchases from VAT companies that are not registered
• Education of suppliers

IT

• System modifications
• Paperwork (tax invoices)
• VAT return reports

Sales and marketing

• Marketing and samples
• Strategies for pricing
• Returned items
• Consumer education and communication
• Items of credit

Legal

• Both new and existing contracts
• Revenue- or turnover-based payments (such those made under franchise or royalty agreements)

Finance

• Negligent debts
• Advanced payments and deposits
• Hire purchase and leases
• Stock and equipment loan preparation for a VAT return
• Asset disposition: Scrap sales

Human Resources

• Benefits on the fringe
• Presents for staff members
• Employee benefits and claims