Next 5 Years of VAT in UAE

The implementation of Value Added Tax ("VAT") on 1 January 2018 was a groundbreaking development for the UAE, as it was the first federal tax to impact all sectors of the population, businesses, and the government. Despite the Excise Tax being introduced three months prior, VAT was the first federal tax to have a truly universal reach. As we surpass the five-year milestone since the introduction of VAT, it's evident that the tax has been a triumph and a testament to the UAE's ability to adapt to new economic circumstances. This five-year commemoration provides an opportunity to reflect on the progress made in the UAE's VAT system, learn from the experiences, and assess the possible future of VAT.

Although the last five years have been impressive, the future of VAT in the UAE holds even more potential for growth and development. While considering my experiences over the past five years, along with potential developments that may arise in the future, it's crucial for businesses to focus their attention on specific areas. It's essential to identify where efforts should be directed to make the most of opportunities that lie ahead. The following are my predictions for potential future developments in VAT in UAE:

• Increase in the rate of VAT
• Formation of GCC VAT framework and GCC VAT rules
• E-invoicing
• Automation of VAT returns
• Scope in introduction of more domestic reverse charge provisions
• Developments based on conducting Tax audits by FTA

Get ready and focus on the developments !

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