VAT refers to Value Added Tax. 150 countries such as European Union (EU), UK, Canada, New Zealand, Australia, Singapore, Malaysia etc have implemented this form of tax.
In 2018, consumers in UAE are expected to pay a 5 per cent value-added tax when purchasing most goods and services. The six states in the Gulf Cooperation Council (GCC) region have agreed to implement VAT in order to reduce the burden on hydrocarbon products as a source of revenue.
Like in other developed and the developing countries, now businesses in UAE will also come under VAT. This will be a huge paradigm shift for businesses as they will have to understand & implement VAT by January 2018.