dubai customs launch the second phase of vat
The Implementation of VAT will take into consideration the principle of welfare and the best global practices
Dubai Customs recently launched the second phase of the Value Added Tax (VAT) Study Project, in order to apply on time the proposed system for the tax.
The second phase includes the transition from the study of the best global practices to the implementation stage of the project.
This phase will include also the completion of the legal aspects, and the start of the groundwork process of its infrastructure, especially the collection of taxes.
The second phase also includes the training of the involved personnel in the UAE, as well as the preparations for a major media campaign aiming at raising the awareness among taxpayers and consumers.
Dubai Customs with the announcement of the second phase launch of the project signed a partnership contract with the PricewaterhouseCoopers Company which will assist in the VAT implementation.
Mr. Abdul Rahman Al Saleh, Executive Director of the Corporate Support at Dubai Customs, in his capacity as the Head of Dubai Customs team working on the VAT Project, said that entering into the second phase does not mean that the implementation of the tax will be soon, pointing out that the process may take one year or more, due to the need to apply it in a professional manner and to meet, or even surpass the international standards.
“The business size that defines the classification of the taxpayer companies is being carefully studied as the small companies will be exempted,” Mr. Al Saleh added.
Mr. Al Saleh emphasized on the implementation of the VAT that will entirely take into consideration the principle of welfare and assured the investors and consumers that while the GCC countries have not applied any tax in the past, the VAT will be applied professionally and with fairness.
“The study conducted by Dubai Customs took into consideration the best global best practices in this field, to make sure that the application of the new system would not cause any burdens on traders and investors”, he added.
He reiterated that the benefits of the project will include a mechanism to refund the tourists, stressing that the GCC countries will apply this mechanism with no effect on the export or production.
“While there may be some relationship in the longer term between monetary union and a uniformed indirect tax regime (including VAT) in the GCC, the two are mutually exclusive from an implementation perspective. The VAT implementation will contribute positively to move towards a single economic market and ultimate monetary union,” He added.
“The VAT would be a substitute for customs duties which are expected to be abolished when the Free Trade agreements with major trading partners of the United Arab Emirates are implemented”, Mr. Al Saleh concluded.
Dubai Customs is preparing this study as part of the working group in charge of preparing for VAT in the UAE. The working group includes representatives from the concerned Federal and Customs Departments in UAE.
