UAE | 27 September 2017
The UAE recently issued laws on Excise Tax (Federal Law No 7 of 2017) and VAT (Federal Law No 8 of 2017). Excise tax will be applicable in the UAE from 1 October 2017 and VAT will be applicable from 1 January 2018. Excise tax will be applicable on a limited number of commodities like tobacco, energy drinks and sugary fizzy drinks. VAT will be applicable on a number of goods and services as set out in the VAT law. Under the VAT regime, businesses will be collecting taxes on behalf of the government and will file tax returns accordingly. Although the tax is collected at each stage of value addition, the burden of tax falls only on the end consumer. For all the other stages, one can claim a refund. For this reason VAT is called ‘consumption tax’.