Dubai – Decypha: All sales and leasing transactions of residential properties as well as bare land in the UAE will be exempt from value added tax (VAT), according to a statement by country’s finance ministry.
However, the exemption does not extend to commercial properties, where all sales and leasing transactions will be subject to the standard 5% VAT rate.
Other sectors also exempt from the VAT tax include education and healthcare services, additionally a list of medicine and medical equipment will also be part of the healthcare exemptions. Means of local transportation such as taxies and buses will be exempt as well.
The state is expected to release its VAT law before June 2017, in preparation of its implementation starting the 1st of January 2018, according to Gulf Business.
The ministry of finance has announced previously that it will close down a business for 72 hours and impose a 500% financial penalty for any value added tax evasion, according to Arabian Business.
According to the GCC VAT framework agreement, governments will be allowed a window of upto one year to implement the Vat system.
By Decypha Editorial Team
