Everything You Should Know About GCC VAT System

 VAT (Value Added Tax) was implemented in the UAE in January 2018, to ensure effective fiscal management at the federal level. It has had an impact across individuals and businesses in the UAE.

So, what is GCC VAT? It is nothing but an indirect tax that will be levied on goods and services in the member states of Gulf Cooperation Council (GCC). The member states include Saudi Arabia, Dubai, Qatar, Bahrain, Kuwait and Oman.

• How will VAT be charged?

All the businesses will charge VAT on the goods and services they supply on behalf of the government. Every stage of the supply chain will see the VAT charge, and the end user will bear the charges.

• What types of goods and services are exempted from GCC VAT?

Medicine, medicine supplies, certain foods, the oil sector, international and intra-GCC transport, supply outside the GCC and on supply of precious metals for investments. Apart from this, each of the states can define their own exemptions.

• What is the GCC VAT rate?

The GCC VAT rate is charged at 5%. However, there are certain sectors marked at 0% VAT in the different member states.

• Who is required to register for VAT?

Any business with an annual turnover of AED 375000 (or its equivalent) is required to register for VAT. Businesses whose turnover is lesser than AED 375000 are not required to register for VAT, although if they still wish to – they can. It is not a compulsion. To know more, you can get in touch with a VAT consultancy in Abu Dhabi.

• How can we help you?

We help you with VAT Periodical Compliances, VAT Health Check, VAT Registration / de-registration, Assistance in getting VAT Refunds and more.

TRC Pamco is one of the leading VAT companies in Dubai, and it has the experience necessary to help you to optimize your tax position. Since, VAT compliance involves a complex process, choose an expert from our team of tax (VAT) professionals who know how to build a sustainable tax (VAT) strategy to make your organization tax (VAT) compliant.

Scope of the New ESR Update - Key Changes & Requirements

 The UAE had announced Economic Substance Regulations in April 2019, and have updated it since then, and it is imperative for businesses in the UAE to be aware of the same.

First, who is eligible to hire a ESR filing company in Dubai?

Any natural or juridical person licensed by a competent licensing authority in the UAE (licensee) that carries out any relevant activity is subject to the ESR. On 11 September 2019, the United Arab Emirates (UAE) issued Ministerial Decision No. 215 of 2019 containing guidance for businesses on compliance with the Economic Substance Regulations (ESR), enacted in April.

What are the key updates?

• Initially, government entities were exempt from ESR, but as per updated rules – they also must comply with the updates ESR regulations.

• Offshore companies who operate in the UAE through branch offices, and the ones that concluded they carried out relevant activity of distribution and service center business – will have to verify the impact of the updated ESR on their previous analysis. Previously, for any entity to fall under the scope of Distribution & service center business, goods had to be stored in the UAE, not anymore though.

• Offshore companies conducting relevant activity through a branch in the UAE do not need to show economic substance, provided the relevant income is subject to tax in the jurisdiction where the company is formed.

• All the entities need to now verify if the analysis they conducted under the previous economic substance regulations still hold accurate with the updated regulations.

• If any UAE entity falls under the updated Economic Substance Regulations, they need to re-submit their economic substance notification through the finance portal of the UAE ministry, once available.

To know more about ESR filing companies in UAE, check out TRC Pamco. They have a team of professionals who can guide you through the process and file your Economic Substance Regulations in compliance with the updated rules.