The UAE announces new VAT laws - How is this going to affect you?

Tax.

Many of us in Dubai won’t have heard of that word for some time - but for those of us who have memories of what once was, hearing it might make you shiver.

The news is in, the UAE has announced a brand new set of VAT laws.

What is VAT?

VAT is value-added tax which in the UAE is 5% and added on goods and services in Dubai. This includes dining at restaurants, or purchasing groceries from the supermarket.

The UAE has now introduced a series of significant changes to its VAT regulations in a move aimed at strengthening its position as a global business hub, and here is everything you need to know…

What are the new VAT laws?

These new amendments to VAT have been announced by the Ministry of Finance and are set to focus on enhancing transparency, supporting the investment growth of the country and attracting both local and international businesses to the UAE.

This change is expected to increase the growth of the investment management sector, increasing the UAE’s attractiveness as a leading investment hub.

Another important change introduced by the amendments is the VAT exemption for in-kind donations between charitable and government entities, valued at up to AED 5 million over 12 months.

This move aims to ease the financial burden on these entities, allowing them to recover VAT on such donations.

Additionally, the new rules grant the Federal Tax Authority the power to deregister taxpayers in specific cases, reinforcing the integrity of the UAE’s tax system. This strengthens tax compliance and streamlines the administration of taxes within the country.

The positive impact on Dubai’s property market

These VAT amendments will have significant impact on the property market in Dubai.

By exempting investment fund management services and certain virtual assets from VAT, the government is making real estate and financial technology investments more attractive and attainable. This move is expected to drive investors toward the UAE property market, which is already on the rise!

With Dubai being a major financial and real estate hub, the new tax laws will encourage more businesses and investors to consider property as a secure investment, likely to lead to increased demand for commercial and residential properties.

This will not only boost Dubai’s property market but also contribute to the overall growth of the economy, reinforcing our status as a global leader in real estate innovation and investment.

Impressive, isn’t it?

If you are thinking about capitalising on this opportunity and planning to buy a property in Dubai - you can drop our in-house team a line to browse different properties in Dubai!