Monday, July 17, 2017
The United Arab Emirates' Ministry of Finance has confirmed that residential property will be exempt from the Gulf Cooperation Council (GCC) value-added tax (VAT) when it comes into force in January 2018, but that a five percent rate will apply on sales or leases of commercial property.
GCC states, including the UAE, are introducing VAT and new excise duties as part of a common framework. It is anticipated that VAT will be introduced across the GCC from January 1, 2018, although nations are at different stages of preparation.
The Ministry of Finance additionally revealed that undeveloped land, local transport services and certain types of financial services will also be exempt from the levy.
Items that will be zero-rated under the new regime include exports of goods and services outside the GCC region, supplies related to international transportation, certain high-grade precious metals, and supplies of certain educational and healthcare services.