What is VAT (Value Added Tax)?


What is VAT ?

VAT (Value Added Tax) is one of the most common types of consumption tax found around the world. Over 150 countries have implemented VAT.

VAT is a tax which is applicable at each point of sale where value has been added, from beginning to the end user. So it is levied at each stage in the chain of production with the provision of a set-off for the tax paid at earlier stages in the chain.

VAT, as a general consumption tax, will apply to the majority of transactions in goods and services. A limited number of reliefs may be granted. However, it is expected that only utilities like healthcare and education may be exempted from the tax. The VAT rate is expected to be low at around 5%.

In particular, the United Arab Emirates (UAE) plans, on 1 January 2018, to implement VAT.



What will be exempt from the tax?

The UAE government has already announced that 100 food items, health, education, bicycles, and social services would be exempted from VAT.

What will be taxed?

Electronics, smart phones, cars, jewellery, watches, eating out, and entertainment will fall under the taxed category. GCC countries are also expected to introduce excise duties on certain beverages that are deemed to be harmful to health, including those with high sugar content.

Do I need to start preparing for VAT? What should I be doing now?

There is a relatively short time to consider the implications of the introduction of VAT and to make the necessary changes. The amount of work required will depend on the size and complexity of your business and it is essential you consider the impact now and determine how best to deal with it.
Software's For VAT

SAGE 50 UK Accounting Software, QuickBooks UK Accounting Software, SAGE 50 Canadian Accounting Software and Tally ERP 9Software are some VAT Complaint Software.


To Know More:

Perfonec Computer LLC

www.perfonec.com

045866199

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