VAT: ZERO-RATED VAT vs EXEMPTED VAT
VAT implementation is into effect from January 1, 2018. UAE VAT is a charge borne by the final customer. The general rule of VAT law is that the supplier has to account for VAT. The closing price of the transaction is inclusive of VAT. There are two major terminology in VAT (Value Added Tax) “Zero-Rated VAT” and “Exempted VAT”. What is Zero-Rated VAT? Any goods and services that are exported to a gulf cooperation (GCC) country that doesn`t implemented VAT just yet. This includes international transportation of passengers and goods, transfer that starts in UAE or ends in UAE or cross any region of UAE. Simply, Zero Rated VAT means that supply of goods and services that are taxable but 0% VAT is imposed. VAT registered business that makes Zero-Rated supplies or services have the right to claim their input tax deduction that they have obtained for producing taxable supplies. The price of goods are reduced when Zero-Rated VAT is imposed. What is Exempted VAT? Goo...