VAT in the UAE - A Guide for Intermediaries

 

 

 

VAT in the UAE - A Guide for Intermediaries

We greatly value the business we do together and are providing this helpful guide to ensure our partnership is not impacted by the upcoming introduction of VAT.

*Please note the information set out below is based on the latest published information and is subject to change. We will issue further communications to keep you updated. 

Requirements for your action by Thursday 23 November 2017

​To ensure you comply with the new requirements, we would be grateful if you could please provide us with the following information as soon as possible: 

​✓ ​Your entity’s VAT registration number and point of contact for any VAT related queries, if you are mandatorily required or voluntarily decide to register for VAT

✓​ Your preferred route for VAT deduction: either via Self-billing or issuance of a Valid Tax Invoice 

✓​ Please also remember to maintain copies of the Valid Tax Invoice or the Self-billing Invoice for a period of 5 years as required by the Ministry of Finance for VAT purposes.

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Key Points to Note 

  • The VAT Framework Agreement which has been agreed to and signed by all six-member states of the Gulf Corporation Council (GCC) is the Treaty governing the introduction of the VAT in the GCC.
  • VAT is an indirect tax and will be introduced across the UAE with effect from 1st January 2018 at a standard rate of 5%
  • VAT is applicable to most industries including Insurance Companies and Insurance intermediaries. All insurance products will be subject to VAT at the standard rate or zero- rated, except Life Insurance which is exempt.
  • The mandatory VAT registration threshold on annual turnover of taxable supplies will be AED 375,000 and the voluntary threshold will be AED 187,500. RSA is therefore now registered with the Federal Tax Authority (FTA) as a Taxable Entity and where applicable, shall charge the standard rate of VAT (5%) on policies with effect from 1st January 2018.
  • RSA's VAT registration no is 100000847200003, which we request you to please make a note and is attached here for your reference.
  • If you are mandatorily required or voluntarily decide to register for VAT, then you will need to provide us with your VAT registration number, billing reference and point of contact promptly
  • RSA will issue a Premium Tax Invoice (Debit Note) on every insurance policy which is a taxable supply on or after 1st January 2018. Please note that for plans with an inception or renewal date on or after 1st January 2018, your clients should not attempt to pay for their plan before then (i.e. after they have received the VAT-compliant invoice).
  • Further details about specific VAT requirements for premiums and commissions can be found in the tables below.
  • RSA will also issue an Addendum on the Terms of Business Agreement (“TOBA”) with you in due course to reflect the VAT changes as stated above.

 

 

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