'UAE studying proposal to introduce VAT'

ABU DHABI: The Ministry of Finance has said that the UAE has been conducting a series of studies on the implementation of a draft VAT (Value Added Tax) law, along with the other GCC countries. The draft law is still pending and under negotiation due to the absence of a final agreement between GCC countries on the tax rate and a list of tax exemptions, The Ministry of Finance said in a statement on Wam.

"The MoF has conducted several feasibility studies on taxation and its social and economic implications, the latest being in 2014, which was completed in early 2015. The studies will determine the impact of taxes on the growth of the regional economy and UAE's global competitiveness," the Ministry of Finance said.

An announcement will be made once a final agreement on imposing a VAT law is reached. Concerned sectors and entities will have around 18 months after the enactment of the law to implement and fulfill the requirements of their tax obligations. With regards to corporate tax law, the Ministry said it conducted a number of studies on the effects of imposing taxes in the UAE and presented it to relevant authorities. The draft law is still under study with regards to the tax rate to be imposed. According to the ministry, developments on the draft law on corporate tax will be announced once completed to allow concerned entities a time limit of no less than a year to fully prepare for the implementation and fulfillment of their tax obligations, after the approval and issuance of the law.