The UAE VAT system, implemented in 2018, incorporates the Reverse Charge Mechanism (RCM) – a mechanism distinct from the standard VAT treatment where the supplier charges VAT to the customer. Determining the place of supply is crucial for understanding when the RCM applies. Legal Framework: The Federal Decree-Law No. 8.
VAT Basics VAT is a tax levied on the value added at each stage of the supply chain. It is ultimately borne by the end consumer but collected by registered businesses on behalf of the government. UAE had implemented VAT on 1st April, 2018 vide Federal Decree-Law No. (8) of.
Common VAT Agreement for GCC Countries The UAE is part of the Gulf Cooperation Council (GCC), along with Saudi Arabia, Bahrain, Oman, Qatar, and Kuwait. GCC States entered into a common Agreement for the implementation of Value Added Tax across the member states and this Agreement aims to establish a.
