As a local resident, running a small grocery business how much VAT am I liable to pay?

 As a local resident, running a small grocery business how much VAT am I  liable to pay? 

You need to record your taxable purchases and taxable sales for the quarter. The difference between the your input and output vat, will be the Tax payable to FTA.

The amount of VAT the user pays is based on the cost of the product minus any costs of materials in the product that have already been taxed at a previous stage 

As a local resident running a small grocery business in the UAE, you may be liable to pay VAT at a standard rate of 5% on the taxable supplies of goods and services that you make. However, whether or not you are required to register for VAT and charge VAT on your supplies depends on the value of your taxable supplies and imports.

It is mandatory for businesses to register for VAT in the following two cases:

- If the taxable supplies and imports of a UAE-based business exceed AED 375,000 per annum.

- If a non-UAE-based business makes taxable supplies in the UAE, regardless of its value, and there is no other person obligated to pay the due tax on these supplies in the UAE.

Meanwhile, VAT registration is optional for businesses whose supplies and imports exceed AED 187,500 per annum.

If your business meets the criteria for mandatory VAT registration, you must register for VAT and charge VAT on your taxable supplies. If your business does not meet the criteria for mandatory VAT registration but exceeds the threshold for optional registration, you may choose to register for VAT voluntarily. If your business does not meet either threshold, you are not required to register for VAT or charge VAT on your supplies.

If their taxable supplies exceed the mandatory registration threshold of Dh375,000 000 over the previous 12 months, or are expected to exceed the threshold in the next 30 days, then the person is liable to pay VAT.

As a local resident running a small grocery business in the UAE, you are generally required to charge and collect VAT on the taxable supplies you make to your customers. The standard VAT rate in the UAE is 5%. This means that you would need to add 5% VAT on top of the selling price of your taxable goods. The VAT collected from your customers would need to be reported and remitted to the tax authorities according to the prescribed filing and payment deadlines. It is recommended to consult with a tax professional or accountant to ensure that you understand and comply with the VAT regulations specific to your business in the UAE.