Construction Sector | UAE VAT | GVC | Gulf Vat Consultancy

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In less than 80 days, the New Year will usher a novel taxation regime in the UAE in the form of Value Added Tax (VAT) at a moderate rate of 5 per cent. The construction sector is of pivotal importance to the GCC considering it provides infrastructure, commercial and residential spaces for the economic development of the region. Having said that, the introduction of VAT is expected to result in an overall moderate increase in construction costs, as well as in the cost of building materials.

The nature of tax treatment given to the real estate and construction sector globally is quite intricate and different from standard taxation rules. It is interesting to see how VAT will affect the UAE construction industry and in particular, certain migrating construction contracts which are expected to conclude after VAT has been implemented.

It is expected the UAE Government will make a few clarifications for the tax treatment to be adopted for migrating and spill-over contracts – ones that are ...

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