VAT impact on Insurance

VAT impact on insurance: The introduction of VAT (Value Added Tax) in the UAE is expected to have a noteworthy effect on insurance sector, although detailed rules are not yet confirmed. The government has decided to impose VAT on non-life insurance which will increase the cost of property premiums, health and motor, as per the tax experts. In GCC countries UAE is considered as the main insurance market where 70% of market is accounted with health and motor policies. The government UAE made it compulsory in 2014 that all the residents should have health insurance. This also raised the fees by around 100% from 2017 for compulsory car insurance.

read more :- VAT in UAE

As per the government norms VAT is applicable only for general insurance premiums, whereas the life insurance premiums are currently exempt from tax. If this is confirmed it is a bad news for the organizations as though the VAT on commissions paid to brokers will become unrecoverable. The other input cost of VAT on business will also not be recovered.

The businesses need to identify business input use and allocate the extra costs related to taxable and exempt activities which may increase compliance costs, to maximize VAT recovery.

HOW OBM ASSISTS

OBM’s experienced VAT team includes VAT experts, provides guidance in complying with VAT requirements, how to implement VAT strategies, etc. to ensure your organization is prepared for VAT.
We mainly concentrate on

• Assessments on VAT impacts
• VAT implementation strategies
• VAT registration guidelines
• VAT manuals
• VAT reports & reviews
• VAT submission guidance

For a no obligation initial consultation, please contact:
Own Business Management FZC
Post Box No. 16395
Office No. E1 – 4207B
42nd Floor, Ajman Free Zone
United Arab Emirates.

00971 55 3647270

06-7314110
Email: info@obmworldwide.com

please contact OBM Worldwide for any assistance.                                                                OBM