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Wholesale & Distribution (B2B)

With the expected growth in Retail Industry, the Wholesale and Distribution Industry is also expected to flourish as it serves as the backbone for Retail Industry.

With the continued and expected growth of the Retail and Wholesale and Distribution Industry, VAT introduction will have implications to businesses engaging in wholesale and distribution to maximize their recoverable VAT and manage costs of compliance.

Here are some of the FAQs related to Wholesale and Distribution Industry:

Who are classified as Wholesaler and Distributor?

The Wholesale and Distribution Industry are businesses that engages in selling and buying bulk quantities of goods and services. It acts as an agents or brokers in buying and selling goods and services to and from individuals or businesses.

Import

As a VAT registered Retailer, you are responsible to pay for the VAT (Input tax) from your imported Goods and Services, but you can redeem it in full through reverse charge.

 

Export

 

VAT (Output tax) is Zero rated when you export your Goods and Services outside the UAE. However, if the bill to address for your exported services is a UAE VAT registered business, you must charge 5% VAT.

 

Domestic

VAT is applicable when purchasing and selling taxable goods and services with their respective rates.

 

Exemption

If you purchased VAT exempt Goods and Services, VAT (Output tax) is not applicable.

 

Partial Exemption

If you purchased supplies for your business operations FTA will provide a fair computation for partial exemption; and purchases for your business expenses can be redeemed in full.

Implications

As a Wholesaler and Distributor dealing with a volume of AR & AP transactions, automation and digitisation will significantly help timely and accurate reporting with increased control on cost of compliance. Ensuring you have correctly structured invoices, manage the treatment of transactions correctly, document management & archiving and reporting model will help simplify these challenges reduce risks of non-compliance.

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