On January 5, 2019, the Federal Tax Authority (FTA) announced that 296,000 business entities have been registered for VAT in the UAE since its introduction on 1 January 2018.
The authority said in a statement that more than 650,000 VAT returns were submitted by VAT registered business entities in the UAE in past one year since 1 January 2018. It was also revealed that 176 VAT agents were approved by the authority during the first 12 months of operations.
The FTA further revealed that it answered more than 453,500 queries regarding the tax laws and regulations applicable in the UAE. FTA also featured in the list of the top ten Google searches in the UAE in the year 2018.
Director General FTA, Khalid Ali Al Bustani, said that the VAT processes applicable in the UAE have been admired and praised by tax experts as well as the international and local official bodies. He further said that UAE succeeded in rolling out a tax system that is seamless and pretty flexile despite facing challenges at the beginning of the implementation phase of the new tax regime.
The comments from the FTA Director General came through a press statement issued on completion of the first year of VAT implementation in the United Arab Emirates, which went into effect on 1 January 2018 at the standard rate of 5 per cent on most supplies made to customers in the UAE.
Al Bustani also said that the Tax Authority will continue its work with regards to upgrading its tax systems, increasing effectiveness and ensuring compliance with applicable tax laws and procedures. Al Bustani expects important developments to take place in 2019 with regards to the tax system in the United Arab Emirates as the Authority has a number of plans in mind with regards to improving rate of tax compliance, counter the threats of tax evasion and promote VAT registration of taxable business entities.
The rate of compliance among taxable persons in the United Arab Emirates is increasing remarkably as the total number of tax returns received by the authority from business entities exceeded 650,000 in the year 2018.
It was also revealed that a recently launched scheme by the government in which Tax Refunds are provided to tourists now processes more than five thousand transactions a day.