Expert: Onus of paying taxes is on the seller
dubai — Paying taxes is the responsibility of the seller, not the buyer, a tax expert said in Dubai on Wednesday.
Citing an example, Aly Rehan Khan, GCC VAT trainer at Qadi Accountants, said: “If you buy goods, pay tax and claim for VAT from the government, tax is then entirely the seller’s responsibility. It’s a one-way road. I am responsible for my sales to pay government tax.”
Khan was speaking on ‘How to prepare your company for VAT’ at a two-day CFO Strategies Forum Mena in Dubai on Wednesday.
He noted that VAT applies only on successful transactions.
According to him, fines have to be paid by sellers and they have to report it within 14 days, or a Dh5,000 fine is imposed for not reporting a transaction.
The UAE will implement five per cent value-added tax (VAT) from January 1, 2018, as part of the GCC-wide agreement. Saudi Arabia is the only other regional country to impose VAT from next year wWhile other GCC countries will introduce VAT later.
He wondered how companies can claim to be prepared for VAT when the executive regulations are yet to be released.
Highlighting the challenges, he said there are 180-degree differences between Saudi Arabia and the UAE because local legislations are different. Citing an example, he said the health sector is exempted from VAT in the UAE but private health in Saudi Arabia is taxed. Similarly, private education too is taxed in Saudi Arabia.
— waheedabbas@khaleejtimes.com