An introduction to setting up VAT in the UAE

The new Value Added Tax (VAT) to be introduced into the UAE (United Arab Emirates), and indeed all of the Gulf States, has been created in a very similar way to the European Union VAT structure, where each country is required to follow guidelines but each country is responsible for setting its own legislation around VAT. What this means is that the Gulf Cooperating Council (GCC) countries are going to have very similar VAT structures and rules but each country may have some slightly different rules or rates, setting different items as being exempt from VAT, for example.

So, what does this mean for your ERP system?
What do you need to know and what can you do to get ready?

The following pages will explain what you need to know to get your solution ready. Of course, we hope you will take the easy and most cost-effective route and Contact Us to find out about our award-winning, fixed-price solution for fully automated VAT on Oracle ERP and Cloud.

Before we get into the details of VAT for the UAE, the new VAT system is being implemented as part of a GCC initiative but don’t be confused to think this is a GCC VAT, it’s not.

The first thing to understand is that there is not going to be one GCC regime. Instead each country will have their own regime. This is important as when trading between GCC states takes place, the selling entity will not charge VAT and the buying entity will need to reverse charge the VAT. We will go into more detail on this later.

The second thing we need to know is that the GCC VAT treaty is just a set of guidelines. Whilst each GCC country has signed up to follow certain agreed requirements, it is still responsible for constructing its own legislation and as such can interpret the VAT treaty as it requires. This means we may have different tax logic for each country.

In reality, we expect that the laws will be very similar and the VAT rules almost identical. Lastly, the time frame set for the VAT go live is 1st January 2018, for every country, but there is nothing to force each country to either go live on this date or for all countries to go live together. This should not cause any issues to your ERP system’s tax automation.

So what can we expect and how does this impact
your Oracle or SAP implementation?

The sections below will help you understand what is happening and what you need to do.

Translate GCC VAT Introduction from English into Arabic

The Cost of VAT in the GCC

An introduction to setting-up VAT in the United Arab Emirates
Value Added Tax Regulations for the United Arab Emirates (UAE)

Want to know about setting up VAT in other GCC countries?

Introduction of VAT in Bahrain
Introduction of VAT in Kuwait
Introduction of VAT in Oman
Introduction of VAT in Qatar
Introduction of VAT in Saudi Arabia
Introduction of VAT in the UAE

Tax Compliance Manager Demo