OVERVIEW OF VAT Output VAT Input VAT = VAT payable - PowerPoint PPT Presentation

OVERVIEW OF VAT • • • • • Output VAT – Input VAT = VAT payable

OVERVIEW OF VAT 100+5 150+7.5 200+10 7.5 – 5 = 2.5 10 – 7.5 = 2.5 5 Tax collected by FTA = 5+2.5+2.5=10

TAXABLE SUPPLIES • BASIC RULE : Supplies of goods Supplies and services in the course of business for a consideration Taxable Exempt are taxable unless exempt by law. Standard Zero rated No VAT rated (5%) (0%)

Zero rated supplies

Exempt supplies

DESIGNATED ZONES IN FREEZONES • • • • • • •

REVERSE CHARGE MECHANISM • • • •

REVERSE CHARGE MECHANISM • UAE accounting firm charges AED 5,000 plus 5% VAT • Accounting firm declares AED 250 as Output tax in return • UAE Business declares AED 250 as Input tax paid to accounting firm • UK accounting firm charges AED 5,000 • UK accounting firm is not registered in UAE and does not file return • UAE Business declares AED 250 as Input tax and AED 250 as Output tax in its return