A 5% VAT has been introduced on all service invoices in the United Arab Emirates and Saudi Arabia as of January 1, 2018. As a result, all suppliers are legally required to collect a 5% tax on behalf of the government.
The VAT applies to most goods and services with only 100 food items, health, education, bicycles, and social services being exempt. Any invoices for services rendered in January 2018 or later are subject to the 5% VAT.
It has been confirmed by our partners that residential rents will be exempt; however, real estate agent fees and utilities will be subject to the VAT. Additionally, while tuition fees are exempt, other education costs relating to uniforms, books, supplies, school bus fees, and lunches will be taxed as well. Other items subject to the VAT that may affect our clients and their employees include:
Hotels and Serviced Apartments.
- Food and Beverages.
- Remittance Fees.
- Fuel Charges.
- Rental Car Services.
- Financial Services.
At this time, only the UAE and Saudi Arabia have imposed the 5% VAT. Implementation in Bahrain, Kuwait, Oman, and Qatar is not yet scheduled. Other Gulf Cooperation Council (GCC) countries are expected to introduce their own VAT by January 1, 2019, to offset decreasing oil prices.
If you have any questions, please reach out to your Altair Global Client Services representative.
Altair Global (‘Altair’) has provided this information as a service and convenience for your information only. It is not intended to replace your own legal or financial guidance and/or assistance and you are encouraged to seek the advice of your own tax and legal advisor. Further, the information contained herein is to our knowledge accurate to the extent of the data available to Altair as of the date identified. Altair does not assume responsibility for the accuracy of the contents hereof and is under no obligation to update the material contained herein.
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