UAE businesses will be able to register for value-added tax (VAT) beginning the middle of September, the head of the country’s new tax authority said Tuesday.
Khalid Al Bustani, the director-general of the Federal Tax Authority, said that companies would be able to register for VAT through the authority’s own website from mid-September (September 15, according to a formal statement).
VAT will affect around 300,000-350,000 companies in the UAE when implemented from January 2018, Al Bustani said, adding that businesses will be expected to file VAT returns on a quarterly basis even though there will be flexibility offered in payments.
There will be however no grace period for businesses who miss registering before the January 2018 deadline.
Al Bustani also revealed that while the UAE and Saudi Arabia are set to implement VAT on the originally agreed to schedule (January 2018), other GCC states may be delayed in doing so.
“We are starting with Saudi Arabia in January and the rest could implement until the end of 2018,” he said.
Bustani’s statement comes after news reports revealed that several members of parliament (MPs) in Kuwait intend not to vote for the measure.
Voicing concerns that imposing the VAT will increase prices for both citizens and expat workers in the Gulf state, the MPs said that they would not back the proposal when it comes to the National Assembly.
Laws governing VAT and excise duty would be released during the final quarter of 2017 in the UAE, Al Bustani added.
VAT is expected to be levied at 5% certain goods and services and is predicted to apply to companies whose annual revenues exceed $100,000 a year.
When implemented, VAT will cause an inflation of at least 1.4%, Al Bustani conceded.