The U.A.E government’s introduction of the ‘Value Added Tax’ (VAT) in 2018 is a major reform that companies need to be familiar with as it impacts their business transactions. This is not merely an introduction of a new tax regime, but, in fact, it alters your existing business systems. The VAT is levied on all goods and services transactions conducted in UAE mainland and its free zones, on a B2B or a B2C basis.Therefore, it is imperative that firm take the necessary steps for effective implementation of and compliance to the VAT rule for smooth continuation of business.It is the common tax for everyone that is added to the value of the consumption unlike the income tax which is as per the income of the business. This makes it even more predictable with respect to the financial calculations done for the business.