During the World Government Summit Ministry of Finance officials from the United Arab Emirates (UAE) announced they are to implement VAT by 1st January 2018. Also, the Finance Undersecretary has reiterated the Gulf Cooperation Council (GCC) Member States’ intention to apply VAT across the GCC by 1st January, 2018. Businesses should therefore begin adopting VAT and Excise Tax compliant policies to ensure a smooth transition by the starting date. A 5% VAT rate will be used on most goods and services, with certain areas potentially benefiting from special VAT treatment. Businesses should note that special VAT treatment may apply to healthcare, education, transport and technology. Also a new excise tax is planned to be introduced during this year in UAE, with specific goods considered injurious to the human health to be subject to the tax including soft drinks, energy drinks and tobacco products.
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