UAE leads the way in GCC VAT - Emirates24|7

UAE leads the way in GCC VAT

The UAE is likely to be the first in the GCC to bring in VAT, which will replace customs duty charged at five per cent.

The country wil introduce the tax at a rate between three and five per cent, Dubai Customs has announced. The introduction date will be announced by the Federal Government within the next few months.

Dubai Customs and the International Monetary Fund have completed a study on the implementation of VAT in the GCC. Dubai began planning for the introduction of the tax as early as 2006.

Ahmed Butti Ahmed, Director General of the Dubai Customs Authority, said VAT was applied in more than 145 countries and had proved to be the world's fairest and most transparent form of taxation.

"The coming period will be exceptional as the UAE is likely be the first country in the Gulf to apply VAT," he added.

"This will give the UAE a number of advantages and the tax will support the country's economic boom. No outside force is imposing VAT on the UAE. The UAE chose to embrace it and will deploy it to its advantage. The removal of customs duty is an important step towards forming strategic partnership with Australia, China, the European Union states and the US."