The UAE Government is implementing Value Added Tax (VAT), from 1 January 2018, on most goods and services in the UAE. Based on the Federal Decree-Law N°8 of 2017 and the Cabinet Decision No. (52) of 2017 on the Executive Regulations, the provision of any loan, advance or credit is exempted of VAT. However certain fees, charges and commissions are subject to a five percent VAT.
Caterpillar Financial Services (Dubai) Limited will add five percent VAT on all fees and charges in compliance with UAE federal laws and regulations. Caterpillar Financial Services (Dubai) Limited is legally obliged to comply with this Government mandate and is required to remit the VAT it receives to the Federal Tax Authority.
We remain committed to ensure that you have all the information on the implications of VAT on our products and services ahead of its implementation. Below you will find several frequently asked questions for your reference.
What is VAT, and when does it come into effect?
Value added tax (VAT) is the tax that applies to the supply of most goods and services which will be collected by the VAT registered business and paid to Federal Taxation Authority (FTA). VAT will also apply to the importation of certain goods and services. VAT is scheduled to come into effect and apply from 1 January 2018.
How will VAT impact good and service provided by Cat Financial?
From 1 January 2018 Cat Financial will add five percent VAT to all its fees and charges unless deemed exempt or zero-rated. The payment of principle and interest are exempt from VAT. Cat Financial is required to remit the VAT it receives to the FTA, and will be required to provide information to the FTA in relation to the value of the goods and services.
How do I find out how much VAT is payable?
Cat Financial will include the VAT payable in the loan and security agreement under the financial schedule.
Is it compulsory to pay VAT?
Exceptions to VAT are only by law, and these are published by the FTA. There is a possibility for business owners to claim back their VAT payments, provided they have registered for VAT and meet the requirements. For further details, please visit www.tax.gov.ae.
How can a business register for VAT and receive a Tax Registration Number (TRN)?
Businesses can register for VAT tax through the e-services section on the FTA website. However, first, they need to sign up an account first. For more details about VAT tax registration, please read VAT registration User Guide.
Where can I get more information?
We suggest you visit FTA website https://www.tax.gov.ae/index.aspx for more information.
Disclaimer: The information contained herein does not constitute a tax/legal advice. For further information, please refer to local regulations. FTA website, or your tax/legal advisor.