VAT stands for value added tax, and it is a tax that is calculated on stages of value addition to a product. It is being applied since the 1st January 2018, and many products and services have been affected by it. Exceptions from VAT include education, health care and food items. Normally, the end users are affected by the introduction of VAT. However, keeping in mind the price elasticity demand and supply forces of the market, business have to make certain changes as well to meet the legal requirements.
For every entity with a trade license Dubai and revenue of over AED 375,000 annually, registration for VAT is necessary through online form submission. This has to be done within 30 days of being required to register with the authorities. However, if the annual revenue is less than AED 375,000 or more than AED 187,500 the registration is voluntary or optional.
The VAT has been introduced in the UAE in order to increase revenue of the government. The government has been planning on providing even better facilities to people in the UAE. With no taxes coming from the free zone companies and other businesses with a trade license Dubai, the government had to arrange for revenue generation to meet the increasing government spending that was becoming a necessity.
The VAT allows the UAE government to provide better medical facilities, meet increased transportation infrastructure costs, meet the costs of increasing population and develop areas that were still undeveloped.
The VAT has been introduced in the UAE in order to increase revenue of the government. The government has been planning on providing even better facilities to people in the UAE.
With no taxes coming from the free zone companies and other businesses with a trade license Dubai, the government had to arrange for revenue generation to meet the increasing government spending that was becoming a necessity.
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