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Key Rules to Consider for Profit Margin Scheme Under UAE VAT

VAT Taxable persons or entities in the UAE calculate VAT on the original selling price in normal conditions. However, there are situations where the Federal Tax Authority (FTA) allows the calculation of VAT on the profit instead of the sales value, which is called the Profit Margin Scheme. The Profit Margin Scheme under UAE VAT is an optional mechanism and the methods apply to a select type of goods under specific situations. Profit margin can be defined as the difference between the purchase price and the selling price of the good.

Source: jcauaeaudit.com

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