ADJC remains steadfast in helping businesses comply with tax laws seamlessly
Dubai, UAE, 14 September 2023: Al Dhaheri Jones & Clark (ADJC) stated that The Federal Tax Authority (FTA) has confirmed the application of a 5% Value Added Tax (VAT) on all purchases made through online shopping portals in the UAE. This regulation ensures that online purchases are subject to the same tax rate as purchases made through traditional outlets, provided that the products are received within the UAE.
In accordance with Article 18 of Federal Decree-Law No. 8 of 2017 on Value Added Tax, it is mandatory for non-resident suppliers to register for tax if they make supplies of goods or services within the UAE. There is no threshold limit applicable to non-residents, meaning that all online platforms, including those on social media, e-commerce, education, games, arts, fashion, music, or any other services, must register for VAT within the stipulated time and comply with local tax legislation.
ADJC emphasized the importance of compliance with VAT regulations for non-resident suppliers. The company stated that failure to comply may result in severe penalties, including a fixed late registration fee of AED 10,000 and percentage-based penalties of 4% per month on unpaid taxes, with a maximum penalty of 300%.
ADJC fully supports the FTA’s decision to apply VAT on online shopping, as it ensures a level playing field for businesses operating in the UAE, regardless of their sales channel. In addition, ADJC encouraged all online platforms and non-resident suppliers to familiarize themselves with the VAT regulations and fulfill their tax obligations promptly. By registering for VAT and complying with local tax legislation, businesses can avoid penalties and ensure a smooth and transparent operation in the UAE market.
To facilitate the registration process and provide assistance to non-resident suppliers, ADJC has established a dedicated team and online resources. Businesses can contact them for guidance on VAT registration, compliance, and any other related queries.
ADJC remains steadfast in helping businesses comply with tax laws seamlessly. Continuous monitoring and enforcement of VAT regulations, including those related to online shopping portals, will ensure widespread compliance across all sectors.
Al Dhaheri Jones & Clark is a Dubai-based consultancy firm. The company renders services as financial and accounting experts as well as advisors and consultants for specialised accounting and tax-related services.
