5% value added tax in UAE from 2018

The UAE will start implementing a value added tax (VAT) rate of five per cent from January 1 2018, but the introduction of other alternate revenue measures including corporate and income taxes are not under consideration for the time being, according to Minister of State for Financial Affairs Obaid Humaid Al Tayer.

Speaking to reporters after a joint press conference with Christine Lagarde, Managing Director of the IMF in Dubai, Al Tayer said 100 food items, health, education, bicycles and social services would be exempt from VAT.  He said GCC countries are working on a framework now, which he expects to be agreed upon and made public in June of this year. GCC countries have agreed they will introduce VAT at a rate of five per cent in 2018.  "Once the framework agreement on implementation of VAT is reached, GCC countries have time from January 1, 2018 to January 1, 2019 to implement VAT," said Al Tayer.

The minister said each country has the flexibility to introduce VAT within this time frame. "A lot of ground work needs to be done before implementing VAT. Khaleej Times