Dubai tax rules change as VAT details emerge

Time Out has news of Dubai tax rules change as VAT details emerge. This will only affect big business, rather than how much you get paid

It has long been suspected and discussed, and now the terms of taxation in the UAE are beginning to emerge.

But while the headline news of 'tax being introduced' might send many an expat dashing for the airport forthwith, the truth is that only big business will be affected by the introduction.

Announced on Tuesday night via Gulf News, it was revealed companies in the UAE that record annual revenues over Dh3.75million will be obliged to register under a Value Added Tax (VAT) system, and will accordingly be taxed. The exact figure has not yet been publicised.

Quoting Younis Al Khoury, undersecretary at the country's Ministry of Finance, it was said that phase one of the roll out would only impact the biggest earners, but that over time it will become obligatory for all companies to register under the VAT system. Dates for additional phases would be discussed at a later date.

Health care, education and staple food items would be exempt.

So what does it really mean? Simply, it won't result in deductions from your pay packet, but may well have a knock on effect to how much you are paid.

The change, which was earlier this year speculated to be introduced in 2018, is expected to generate up to Dhs12billion in revenue in the first year.

Already this year additional charges to things like rent (three-five per cent), hotels and airport use (Dhs35) have been introduced in the UAE, while already things like Salik create an additional charge for using the roads.

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