Value-added Tax (VAT) is an indirect tax system implemented in 160 countries worldwide. In essence, VAT is a type of taxation imposed on the consumption of various goods, products, or services. Unlike income tax, it is categorized as a “Consumption tax.” This taxation model is widely utilized in the European Union. The UAE and GCC countries introduced VAT in the beginning of 2018, with a standard rate of 5%.

VAT operates by incrementally adding value to products or commodities at different stages of the supply chain. This value addition occurs from manufacturing to distribution or sales. VAT registration in Dubai, UAE is obligatory for businesses of all sizes and industries.