New tax schemes have been introduced in the UAE. The Federal Tax Authority or FTA has expressed that the tax compliance in the country is on the rise. There is an increase in the number of tax agents or consultants in the country. The new number now is 316.


New Schemes by UAE Sales Taxes by State 2020


The FTA has released information on several new schemes and steps. They are as follows:


There will be a refund of tax on goods and services for the Expo 2020 Dubai.


Dubai will host Expo 2020. In order to support the participants in the event, FTA has published its decision that allows the participants to claim a refund of VAT paid on goods and services. These goods and services should be connected to the event. 


Certificate of Refund Entitlement


The official participants will apply for a refund entitlement. Afterwards, they can reclaim VAT under the scheme. It is said that the refund claims can be made only by the official participants. They should have been registered for VAT through the returns they have filed. Those who are not registered for VAT have to make a special request application for the refund. 


Dubai is on the lookout for various ways to enhance further to diversify its economy. There are no major taxes there for the benefit of the business community and also for the Expats who visit the country to do business and build the economy. There are scopes for a series of indirect taxes which the country wants to bank on. The tourists and other people who come to Dubai often wonder whether there is Sales Tax there. They are also willing to know about any indirect taxes that may be prevalent over there. 


We should have an understanding of what a sales tax in UAE is all about. This is a tax imposed by the tax authorities of the state on goods and services that are transacted for a profit. Usually, it is collected at the point of sale. It is prevalent in every state of the UAE. 


Yes, there is sales tax in Dubai. The sales tax began in 2018 and it came along with VAT. The sales tax is paid by the consumers for the purchase of goods and services. The rate of tax is 5%. The tax so imposed affects the price of goods and services in Dubai. After the introduction of sales tax, the prices of commodities and services became stiff, yet its impact is not felt so much because its rate is relatively low. There are items on which there is an exemption in Sales Tax. These include health services and education. Sales tax is imposed on electronics, home appliances, furniture and other such non-essential items.


The sales tax for tourists is the same as on the residents. If you make a purchase at the duty-free shops it is exempted. Business tourist refund scheme is operational for the tourists visiting Dubai on business. It has a provision for refund of taxes of VAT to those business tourists who have no registration with VAT in Dubai


In order to control the import of tobacco in UAE, the FTA has started Digital Tax Stamps or DTS. These stamps will be affixed onto the packs of cigarettes. These packs are subject to excise duty. There is a proper guideline regarding the imposition of this tax along with DTS. For more clarity on taxation, VAT, registration, company incorporation, return filing and services like auditing and accounting, GCC Filings is a great option indeed.

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