All food products to be taxed under UAE law
It looks like all food products in the UAE are going to be subject to tax when the nation introduces its 5 percent Value Added Tax (VAT) on January 1, 2018.
The (sad) news was confirmed by the Director-General of the Federal Tax Authority Khalid Al Bustan.
“The law in the GCC agreement said that any food items would be under the sovereign right of the government to include it [as a zero-rated item]. The law that has been issued did not include it,” he explained in an interview with Gulf News.
If you’re new to the UAE or are new to the concept of VAT here’s what you need to know…
- News of the nation’s 5 percent VAT was confirmed earlier this year by the Under Secretary of the UAE Ministry of Finance, Younis Al Khouri, who stated that from January 1, 2018, all GCC countries will be enforcing a 5 percent VAT across the broad.
- While businesses with annual revenues of over AED375,000 will be obliged to register for the GCC VAT system, there will be no income tax on salaries.
- The cost of preschool and school, as well as government owned or government funded higher education facilities will be unaffected by the introduction of VAT.
- All goods exported out of the GCC will be zero rated, while investments in gold, silver and metals with 99 percent purity will also be subject to a zero VAT rate.
- Both rental and property sales will be generally exempted from VAT.
- All local passenger transport such as taxis and metro services will be exempt from tax, while all international flights from the UAE as well as international air passenger transfers through the UAE will be zero rated.
In an attempt to help all UAE businesses adapt to the new law, the UAE’s Federal Tax Authority (FTA) has launched a new website, www.tax.gov.ae.