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The United Arab Emirates, Sharjah included, have made significant strides in tax law in recent years. A major initiative is the introduction of Value Added Tax (VAT) in 2018 by the Federal Tax Authority. Generally, indirect taxes such as VAT charge 5% on the import and supply of goods and services. However, there are exemptions, including exports and certain financial services. Along with VAT, the UAE also implements Excise Tax on certain products deemed harmful to health.
Though taxes in the UAE are relatively straightforward, you might require a lawyer's help in understanding and effectively managing them. This could apply in situations where you're running a business and need help navigating VAT regulations, setting up tax structures, doing a tax audit, or dealing with disputes related to tax interpretation.
In Sharjah and the wider UAE, laws related to taxation are governed by the Federal Tax Authority. Value Added Tax (VAT) is charged at a rate of 5% on most goods and services, with certain exceptions. Businesses that exceed the mandatory registration threshold must register for VAT. Companies dealing with 'excise goods' are subject to Excise Tax, which is intended to reduce consumption of unhealthy and harmful substances.
If you own a business that supplies taxable goods or services and the total value of these exceeds the mandatory registration threshold over the past 12 months or anticipated in the next 30 days, then you need to register for VAT.
Some categories of goods and services are zero-rated or exempt. This includes exports, international transport, investment grade precious metals, newly constructed residential properties, education services, and preventive and basic healthcare services.
Excise Tax is a form of indirect tax levied on specific goods deemed harmful to human health or the environment. This includes tobacco products, energy drinks and carbonated drinks.
Free zones in the UAE follow the same VAT implementation and tax regulations as the rest of the country.
Yes, failure to comply with tax laws in the UAE, including incorrect tax returns and late payment, can result in significant penalties.
The Federal Tax Authority (FTA) of the United Arab Emirates is the main governmental body overseeing tax administration. Its website provides detailed information on local tax laws, registration processes, and frequently asked questions. Additionally, law firms specializing in UAE tax laws can offer more specific, targeted advice.
If you require legal assistance regarding taxation in Sharjah, consider consulting with a tax lawyer or adviser who specializes in UAE tax laws. You may also directly contact the Federal Tax Authority for specific inquiries or to clarify legislation. Businesses are also encouraged to keep regular financial records to ensure compliance with tax regulations.
