With effect from the 1st of January, 2018, the United Arab Emirates (UAE) has implemented VAT at a marginal rate of 5%.

This will be put into effect on the 1st of January, 2018, the United Arab Emirates (UAE) has implemented VAT at a marginal rate of 5%. However, in addition to the standard rate of 5%, the GCC has agreed on two additional rates of VAT that will be levied at the time of computation of VAT, which are discussed in the following:

The two rates in addition to the Standard rate of VAT are:

1. Zero-Rate
2. Exempt

The exempt supplies are those supplies made for consideration where no tax is due, and no Input Tax can be recovered. Exempt supplies are not taxable supplies for VAT purposes. It may be noted that the Tax Authorities will strictly apply exemptions as they are an exception to the normal rule that VAT should be charged.