Since VAT is going to be implemented in UAE from january 1st 2018,should the companies maintain a lower closing stock level or a higher closing stock?

VAT is not an expense of a company if it is not the consumer of the product. It is claimable against the VAT you have collected from your customers or end consumers. Inventory cost does not include VAT and so this wont affect the cost of sales of a company/

ADVISED TO KEEP LOWER LEVEL OF STOCK

It is advised to maintain lower Closing Stock and make Purchase after VAT implementation to claim more VAT.

Input VAT is not an expense of a company if the company is not the consumer of the product. Input VAT is claimable/ adjustable against the output VAT ( except exempt supplies ). Inventory cost does not include VAT and so this will not affect the cost of sales of a company ( except exempt supplies ) .

VAT charged on inventory is claimable hence it's not a fact to consider the level of closing inventory.

I don't see the impact of VAT on the level of stock the companies maintained before jan,2018 as far as  the full VAT amount is remitting to goverment accounts for the stock at hand before Jan'18. 

the companies should maintain a lower closing stock, so it can claim the vat paid after the implementing of VAT

Inventory must be maintained as company use to maintain before. 

It is advised to maintain lower closing stocks and purchases are made once the VAT is implemented to claim more input VAT.

The company should maintained stock as per requirement to serve the customer which can be lower but customer should not return on not availability of goods.

The price of the Commodities will increase by 5% if the Googs are taxable goods at standard rate post January  1.2018. 

If the commodities are exempted and the Inputs are Vatable,  then it is  better if the compoany can purchase the inputs  now as otherwise the inputs will be taxed at 5%.

As per the  experience in INDIA, the sale of the Goods which has higher rate of taxes has decreased a bit in the initial stages. Ie you can expect a little bit of negative consumer sentiment initially.

So I  advise to maintain a low Closing stock as on Jan 12018, if your goods are leviable to VAT, and high levels of inventory if the goods are exempted but the inputs are VATable.