VAT in UAE: Gold jewellery, tobacco to be taxed

Non-essential goods, such as tobacco, beverages and luxury cars will not only be subject to value-added tax (VAT) but excise taxes as well, experts have said.

Purchase of gold jewellery is also expected to invite a 5 per cent VAT, since ornaments are not considered part of the basic goods category.

States across the Gulf Cooperation Council (GCC) region have agreed to collect a 5 per cent VAT from January 2018. There have also been plans to impose excise taxes, which could range between 50 per cent and 100 per cent of a product’s sale price.

David Stevens, implementation leader at Ernst & Young (EY) said that consumers can expect to see significant increases in the prices of certain products that will be subject to both VAT and excise tax.

The extra fees may, in effect, discourage some consumers from making unnecessary purchases. So far, only the application of excise tax on tobacco, certain beverages and premium vehicles has been confirmed.



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