Announcements

FTA to Launch EmaraTax on December 5, 2022

date: 20221124

Organized By: Federal Tax Authority

Dubai October 24, 2022:

Here’s an important notice from FTA that is all set to launch EmaraTax on December 5 2022.

EmaraTax significantly enhances taxpayer access to the FTA’s services, payment of taxes and obtaining refunds. The new platform also enhances the ability of the FTA to administer taxes in the UAE and enables better, faster decision-making and earlier engagement with taxpayers that need support.

The new online platform is part of the UAE’s Digital Government Strategy 2025 to leverage emerging technologies and build a digital infrastructure that serves the people and business community.

UAE announces VAT Exemption for Board Members from January 1, 2023

date: 20221118

Organized By: Gulf Today

External URL: https://www.gulftoday.ae/business/2022/11/17/ministry--announces--new-vat--exemption

Dubai November 18, 2022:

Supply of services for people serving as board members will not be subject to value-added tax from next year, the Ministry of Finance said on November 17, 2022.

The ministry added that before the new legislative amendment is implemented, tasks performed by board members – natural and legal persons alike – are treated as taxable services subject to VAT, on the condition that the member provides them on a regular, continuous, and independent basis, and if the total value of these taxable supplies/services and import transactions, exceeds the mandatory tax registration threshold.

Read more.

FTA emails Awareness Information on Excise Tax Registration

date: 20221115

Organized By: Federal Tax Authority

External URL: http://www.allaboutvat.com/wp-content/uploads/Excise-Tax-Registration-Emailer-1-1.pdf

Dubai November 15, 2022:

As part of Muwafaq initiatives, the Federal Tax Authority (FTA) will send weekly Awareness Materials to taxpayers such as informative guides, and updates. The Authority is committed to ensuring full and voluntary compliance with tax regulations among all business sectors, and keep all registrants abreast with the obligations under the UAE tax laws.

With regards to this, the FTA has sent an emailer on the requirements, processes and conditions for ‘Excise Tax Registration‘ in the region. The application takes hardly about 45 minutes to complete, and can be submitted 24/7 on their official website.

Click here to view the file.

UAE: Get Ready, EmaraTax set to Go Live on December 5

date: 20221114

Organized By: Federal Tax Authority

External URL: https://tax.gov.ae/en/media.centre/news/the.uae.federal.tax.authority.is.launching.emaratax.on.5.december.2022.aspx

Dubai November 14, 2022:

EmaraTax, FTA’s new enhanced tax platform, is going live on December 5, 2022. The migration to EmaraTax will commence from November 30, 2022 and will be available for use on 5 December. The migration is planned in such a way so as to minimize disruption to taxpayers and coincides with the National Day holidays well in advance of the usual tax return submission and payment dates.

Emaratax is a new tax platform designed to provide a better experience for taxpayers to manage their tax obligations. The smart app will also enhance taxpayer’s ability to administer taxes, enable better, faster decision-making and foster earlier engagement with those requiring support.

Log onto eservices.tax.gov.ae to access the FTA’s online services. This web address will remain unchanged even after the transition to EmaraTax. A dedicated microsite has been launched containing important information about EmaraTax and is intended to help taxpayers prepare for the new platform. From November 7, 2022 to November 18, 2022 the FTA will host virtual awareness sessions for taxpayers regarding the new EmaraTax portal to help them navigate the new system easily.

Click here to get more details about the new platform that includes guidance videos, FAQs and links to online orientation sessions. Stay tuned for more updates and content addition over time.

Read more.

Federal Tax Authority granted ISO 22301 for Business Continuity Management

date: 20221110

Organized By: Federal Tax Authority

External URL: https://tax.gov.ae/en/media.centre/news/the.uae.federal.tax.authority.is.launching.emaratax.on.5.december.2022.aspx

Dubai November 10, 2022:

The Federal Tax Authority (FTA) has enhanced its holistic quality scheme designed to bring its operating systems and services in line with the highest international quality standards, thus earning the ISO 22301 certificate.

The FTA secured the ISO certificate for Business Continuity Management for its Business Continuity and Crisis Recovery System, after updating all of its practices and procedures in the sector. The independent assessment and audit team reviewed compliance with requirements to meet the ISO 22301 standard, as well as internal protocols and documented procedures that have been implemented.

The Authority underlined the continuous growth in the number of FTA employees who obtained international accreditation certificates related to the international standard for business continuity, which is now 74 employees compared to just 49 last year. This marks a 51% increase in 2022, highlighting the FTA’s commitment to developing its human capital in accordance with the highest international standards. The Authority strives to continuously upgrade its services to meet customers’ needs, save time, cut costs, and boost efficiency in resource management, in addition to motivating employees to integrate into the work environment.

FTA Director General His Excellency Khalid Ali Al Bustani said, “The new certification we have earned reaffirms confidence in the Federal Tax Authority’s systems, as well as in its efficiency and ability to face challenges and maintain business continuity. The ISO 22301 for Business Continuity Management reflects the Authority’s commitment and excellence in implementing technological systems and hiring the right talent, capable of ensuring continuity in our service provision, while maintaining the highest levels of quality and safety.”

Read more.

FTA issues VAT guide on refund of VAT for Construction and Operation of Mosques

date: 20221111

Organized By: Federal Tax Authority

External URL: http://www.allaboutvat.com/wp-content/uploads/VATGRM1-Refund-of-VAT-Incurred-on-the-Construction-and-Operation-of-Mosques-EN-08-11-2022.pdf

Dubai November 11, 2022:

Federal Tax Authority (FTA) has recently issued a VAT guide on ‘Refund of VAT Incurred on the Construction and Operation of Mosques’. The VAT guide explains the requirements and process for recovering input VAT incurred on construction and operation of mosques and this document should be read by persons constructing and/or operating/maintaining a mosque in the UAE.

Click here to view the VAT guide.

FTA releases Key Amendments to the UAE VAT Law

date: 20221109

External URL: https://www.allaboutvat.com/fta-releases-key-amendments-to-the-uae-vat-law/

Dubai November 9, 2022:

We wish to inform you that the United Arab Emirates (UAE) Federal Tax Authority (FTA) has published notable amendments to the Federal VAT Decree-Law No. 8 of 2017 (UAE VAT Law). This is the first update to the UAE VAT Law ever since its introduction in 2017. The amendments will go into effect from January 1, 2023.

In this piece, we have outlined an overview of the key changes to the UAE VAT Law. We recommend taxpayers in the UAE to closely study all the amendments to the UAE VAT law. This is in order to determine if your current tax processes require changes to comply with the new regulations.

Read the full article.

UAE Ministry of Finance Amends some Provisions of VAT law

date: 20221031

Organized By: The National

External URL: https://www.thenationalnews.com/business/economy/2022/10/29/uae-finance-ministry-amends-some-provisions-of-vat-law/

Dubai October 31, 2022:

The UAE Ministry of Finance has amended certain provisions to the value added tax (VAT) laws (Federal Decree-Law No. 8 of 2017 on Value Added Tax (VAT)), which will go into effect from January 1, 2023. The amendments made are in line with international best practices, based on experiences, challenges faced by various business sectors as well as recommendations received from relevant parties.

Some of the major changes to the existing VAT rule introduced by Federal Decree-Law No 18 of 2022 are as follows:

  • Registered persons who make taxable supplies are allowed to apply for an exception from VAT registration if all of their supplies are zero-rated or if they no longer make any supplies other than zero-rated supplies.
  • Setting a 14-day period to issue a tax credit note to settle output tax, in line with the time frame set for issuing tax invoices.
  • The FTA may forcibly deregister registered persons in specific cases if deemed necessary.

Read more…

Want to further know the Key Amendments to the UAE VAT Law in detail, then click here to read the full article.

FTA: New Payment Platform 'Magnati' announced for Tax Liabilities

date: 20221030

Organized By: Khaleej Times

External URL: https://www.khaleejtimes.com/government/uae-new-payment-method-announced-for-tax-liabilities

Dubai October 30, 2022:

The Federal Tax Authority (FTA) announced that it will be discontinuing the use of the eDirham system in paying taxes from October 30, 2022 and replacing it with Magnati, the smart payment option from First Abu Dhabi Bank (FAB).

Magnati provides advanced software solutions for online payments, using next-generation advanced technologies to provide a seamless and efficient payment service for FTA customers. The FTA explained that the new smart payments feature will allow registrants to pay their tax obligations via FAB’s platform, in addition to enabling taxpayers to settle any payment due using credit cards.

Read more…

FTA: Positive Indicators marking the Success of 5th year of Excise Tax in UAE

date: 20221024

Organized By: Federal Tax Authority

External URL: https://tax.gov.ae/en/media.centre/news/five.years.passed.since.the.implementation.of.excise.tax.in.the.uae.aspx

UAE October 24, 2022:

The Federal Tax Authority (FTA) asserted that the implementation of Excise Tax has been a great success in all aspects. Whether in relation to the implementation mechanisms developed as per international best practices, or in relation to encouraging cooperation from sectors of taxable businesses, the indicators have revealed positive results. Thus demonstrating that the roll-out of Excise Tax in the region has achieved its intended objectives.

The review was part of a press statement the Authority issued to mark the five-year anniversary of the implementation of Excise Tax, which went into effect in the UAE since October 1, 2017. Primarily applied to carbonated beverages at a rate of 50%, tobacco products and energy drinks at 100%, the scope of Excise Goods was later expanded to include sweetened drinks as of December 1, 2019, that were subject to a rate of 50%, and electronic smoking devices, tools along with the liquids used within were subject to a rate of 100%.

Key Indicators

  • The FTA revealed that the total number of Excise Tax registrants grew continuously from 309 by the end of 2017 to 430 by the end of 2018, at a growth rate of 39.16%.
  • The total increased by 60.47% to 690 registrants by the end of 2019, and subsequently by 45.36% to hit 1,003 registrants by the end of 2020, and by another 22.33% to reach 1,227 registrants by the end of 2021.
  • An additional growth rate of 19.72% was recorded in the first nine months of the current year, where the total number of registrants reached 1,469 by the end of September 2022.
  • Overall, this marks a cumulative growth of 375.41% between the end of 2017 and the end of September 2022.

Read more.

FTA to launch a New Integrated Platform⁠—EmaraTax

date: 20221011

Organized By: Federal Tax Authority

External URL: https://tax.gov.ae/en/media.centre/news/the.uae.federal.tax.authority.to.launch.a.new.integrated.platform.emaratax.aspx

Dubai October 11, 2022:

FTA announced that a new platform will be launched in November this year following an extensive period of assessment, consultation and development. EmaraTax represents a major milestone in the FTA’s ambition to be a leading digitalised tax administration system in full recognition of the UAE’s national digital agenda.

EmaraTax will significantly enhance the way taxpayers access the services of FTA, pay their taxes and obtain refunds. The new platform also greatly enhances the ability to administer taxes in the UAE, enables better, faster decision-making and earlier engagement with taxpayers in need of support.

Offering online access to a larger number of services, a simplified and streamlined user experience and extensive self-help options, EmaraTax offers a range of significant enhancements. Individual taxpayers, tax agents, legal representatives, foreign missions and diplomats, customs bodies and verification agencies will all benefit from the range of developments.

The new platform is a modern tax administration ecosystem that integrates with other influential government entities such as the UAE Central Bank and national technology-based programs including UAE PASS to make best use of common data and simplify the range of user processes from logging-in to compiling tax returns. Importantly EmaraTax is mobile-ready and the App will be launched shortly after the new platform goes live in November 2022.

View more.

FTA publishes a a Cabinet Decision on Charities

date: 20221007

Organized By: Federal Tax Authority

External URL: https://tax.gov.ae/DataFolder/Files/Pdf/2022/Charities%20List%20-%2026%2009%202022.pdf

Dubai October 7, 2022:

The UAE tax authorities have issued Cabinet Decision No.55 of 2017 on Charities That May Recover Input Tax.

The decision, which has retrospective effect from 1 January 2018, confirms that certain charities (as specified in the list) will be able to recover all the input tax paid by them. This comes with exception of tax excluded from recovery by virtue of UAE’s executive regulations on VAT and tax paid for goods and services used for making exempt supplies.

The file contains the list of charities in both English and Arabic.

FTA showcases latest Digital Initiatives at GITEX 2022

date: 20221006

Organized By: Federal Tax Authority

External URL: https://tax.gov.ae/en/media.centre/news/federal.tax.authority.showcases.its.latest.digital.initiatives.at.gitex.global.2022.aspx

Dubai October 6, 2022:

The Federal Tax Authority (FTA) showcased its latest digital initiatives at GITEX Global Exhibition at the Dubai World Trade Centre. More than 5,000 companies from over 90 countries participated in the event.

The Authority revealed that its participation at GITEX highlights its latest digital initiatives, launched as part of the continuous development plans to match the best standards. The initiatives are in line with UAE’s Digital Government Strategy, designed to drive the smart transformation of all services, and introduce seamless and proactive digital services. The objective is to provide innovative models that embody the leadership and excellence of the government systems, and strengthen efforts to meet taxpayers’ aspirations and process their transactions quickly.

FTA Director General His Excellency Khalid Ali Al Bustani said “Through its participation at GITEX, the world’s largest tech event, the FTA aims to achieve two main objectives. The first is to introduce the FTA’s experts to the latest technologies and smart digital systems in the field of tax administration, which can be built upon to ensure the modernisation of the FTA’s services. This in turn, supports our efforts to fulfil the directives of our wise leadership and make the UAE one of the best countries in the world.”

Read more.

FTA announces 100 percent Digital VAT Refund Scheme for Tourists

date: 20220925

Organized By: Federal Tax Authority

External URL: https://tax.gov.ae/en/media.centre/news/federal.tax.authority.and.planet.tax.free.announce.worlds.most.innovative.aspx

Dubai September 25, 2022:

The UAE’s Tax Authority (FTA), in partnership with Planet Tax Free, launched the world’s most innovative and 100% digital VAT-refund scheme for tourists. The paperless procedure is considered the most advanced solution of its kind in the world and is a reflection of the government’s continuous adoption of proactive solutions based on the concept of proactive government work, to meets the requirements of the future and positively reflect on customers.

The announcement was made at a joint press conference in the presence of H.E. Khalid Ali Al Bustani, Director General of the UAE Federal Tax Authority and Eyad Al-Kourdi, General Manager of Planet Tax Free, the operator of the tax refund system for tourists in the UAE.

The integrated system was demonstrated at the press conference, showcasing the strength of using electronic invoices issued at the point of sale registered within the authority’s system, instead of traditional paper invoices. The new solution is integrated electronically between retail outlets and the tax refund scheme, ensuring a seamless digital process of issuing, sending, modifying and saving invoices for tourists.

Read more.

FTA holds 3 Youth Circles on Tax Culture to support SMEs

date: 20220916

Organized By: Federal Tax Authority

External URL: https://tax.gov.ae/en/media.centre/news/youth.panels.aspx

Dubai September 16, 2022:

The Federal Tax Authority (FTA) Youth Council, in cooperation with the Federal Youth Authority (FYA), held three youth circles on Tax Culture to Support Small and Medium Enterprises(SMEs) as part of the Council’s initiatives to raise tax awareness and facilitate tax compliance through direct engagement with youth business.

More than 100 representatives of SMEs participated in the discussions in Abu Dhabi, Dubai and Ajman. The sessions were attended by FTA Director General, His Excellency Khalid Ali Al Bustani, FYA Director General, Saeed Al Nazari, Abu Dhabi Department of Economic Development (ADDED) Undersecretary, Rashid Al Baloosh and the Mohammed bin Rashid Establishment for Small and Medium Enterprise Development Executive Vice President, Saeed Al Marri, alongside a number of federal and local authority officials.

The youth circles dealt with a set of aspects that include the services provided by the authority, its future directions to enhance youth tax culture in the SME sector and the prominent challenges young people face at SMEs and ways to overcome them.

Read more.

FTA announces World’s First Paperless Tax Refund experience for Tourists

date: 20220914

Organized By: Federal Tax Authority

External URL: https://www-khaleejtimes-com.cdn.ampproject.org/c/s/www.khaleejtimes.com/uae/uae-announces-worlds-first-paperless-tax-refund-experience-for-tourists?amp=1

Dubai September 14, 2022:

The UAE’s Federal Tax Authority (FTA) announced the world’s first paperless tax refund scheme for tourists.

Khalid Ali Al Bustani, Director General of FTA, said the system has been linked with the retailers hence all the receipts will be generated electronically and tourists will not have to carry paper receipts of their purchases for claiming VAT refunds. UAE is the first country in the world to achieve this milestone.

The tourists need to spend a minimum of AED 250 to claim a VAT refund. In addition, there are a number of kiosks placed at various locations in the country for tourists to claim a refund.

Read more.

FTA publishes a Guide on 'Excise Stock Movement For Warehouse Keepers not Registered for Excise Tax'

date: 20220915

Organized By: Federal Tax Authority

External URL: http://www.allaboutvat.com/wp-content/uploads/Non-Registered-Excise-Stock-Movement-Guide-English_V1.2-19-08-2022.pdf

Dubai September 15, 2022:

A Public Clarification was published on August 2022 by the FTA on ‘Excise Stock Movement Guide For Warehouse Keepers who are not Registered for Excise Tax’.

This guide helps Warehouse Keepers (WHK) understand their responsibilities of holding a warehouse in a Designated Zone (DZ) in the UAE and navigate the e-Services portal from a systems perspective. It further throws lights on the following aspects:

  • The process of declaring Excise Goods that belong to Excise taxpayers that are held in the Designated Zone beginning January, 2021.
  • Assist in understanding the Excise Tax compliance obligations that Warehouse Keepers have to comply with.
  • An overview of the declaration forms that need to be filed by the Warehouse Keeper of Designated Zones in the UAE holding stock of Excise taxpayers and explanation of the icons and symbols included in the forms.

The sections of the guide offer a detailed explanation about the declaration forms and who, how and when a Warehouse Keeper should complete and submit them to the FTA.

FTA to implement Muwafaq Priviledge Package for Facilitating SMEs

date: 20220913

Organized By: Federal Tax Authority

External URL: http://www.allaboutvat.com/wp-content/uploads/FTA-Muwafaq-Emailer-2022-AllaboutVAT.pdf

Dubai September 13, 2022:

In line with the development goals set by the UAE to support small and medium enterprises, which represent the backbone of the national economy, the Federal Tax Authority (FTA) has begun designing and implementing Muwafaq Privilege Package which aims to provide innovative tax solutions to facilitate transactions for SMEs with speed, ease and accuracy.

The highlights of the Muwafaq package include:

  • Acceleration of tax registration procedure.
  • Preparing and offering low cost tax accounting programs to ease financial burdens of SMEs.
  • Prioritization of SME procedure requests to facilitate ease of access to FTA services.
  • Cooperation with service providers to offer certain taxpayers support services for SMEs.

View more benefits.

FTA resumes Tax Clinic initiative in Ras Al Khaimah and Sharjah

date: 20220912

Organized By: Federal Tax Authority

External URL: https://bit.ly/3eLtz8o

Dubai September 12, 2022:

The Tax Clinic initiative organised by the Federal Tax Authority (FTA) resumed its field activities across the emirates with sessions in Ras Al Khaimah and Sharjah. The sessions were designed to raise tax awareness and enhance tax compliance , while establishing and maintaining direct communication with business sectors,.

Two rounds of sessions were held last month under the campaign. The first of which was held over three days from 16 to 18 August at Tasheel Enjaz – Alrams Centre in Ras Al Khaimah, while the second round took place at the Tasheel-Al Thiqah Multi-Services Centre in Mleiha in the Emirate of Sharjah from 23 to 25 August.

The Tax Clinic initiative was launched way back in August 2018 in all seven emirates to raise tax awareness, assist taxpayers in overcoming any obstacles they face and ensure self-compliance. FTA representatives present across all locations answer questions about registration, how to file tax returns and pay tax-related obligations. FTA organized these remote awareness sessions under the Tax Clinic initiative for more than two years, bringing together hundreds of business sector representatives and tax system stakeholders.

FTA Director General His Excellency Khalid Ali Al Bustani said “The Federal tax Authority organizes the Tax Clinic campaign in collaboration with Departments of Economic Development and municipalities across all seven emirates, under the framework the FTA established for coordinating with its strategic partners in the public and private sectors providing top-quality services and ensuring the successful implementation of tax legislation.”

Read more.

Dubai Customs Authority Bans Export of Iron Scrap & Wastepaper till Sep 30

date: 20220911

Organized By: Dubai Customs

External URL: https://www.dubaicustoms.gov.ae/en/PoliciesAndNotices/Notices/CN7_2022.pdf

Dubai September 11, 2022:

The Dubai Customs Authority published customs notice 07/2022 announcing a temporary ban on the export and re-export of iron (ferrous) scrap and paper waste. The customs notice states that the temporary ban on iron scrap and waste paper exports has been extended until September 30, 2022.

The UAE had issued a similar notice in 2020 which said that the ban is effective from May 15, 2020 for a period of four months ending 1September 15, 2020. This was in regards to strengthen the country’s domestic demand.

View the notice.

Majalis Abu Dhabi conducts Awareness Session on VAT Refund to UAE Nationals on building new residences

date: 20220901

Organized By: Federal Tax Authority

External URL: https://bit.ly/3U0xXRb

Abu Dhabi September 1, 2022:

As part of the lecture series at Majalis Abu Dhabi at the President’s Court, the Federal Tax Authority (FTA) held an awareness session that was broadcast live on Majalis Abu Dhabi’s Instagram account on the procedure for UAE nationals to recover the Value Added Tax (VAT) incurred on building their new residences. The session was broadcast live on Majalis Abu Dhabi’s Instagram account.

The session was held remotely, bringing Emirati citizens together with a team of experts from the FTA who explained the process for refunding VAT to UAE citizens on the construction of their new residences.

Speakers at the session clarified the steps to be taken to recover VAT through the FTA’s e-Services, starting with submitting the refund request with all supporting documents, all the way to receiving the refund amount by bank transfer to the applicant’s account.

During the session, the FTA’s team of experts outlined the criteria for submitting a VAT refund request incurred on the construction of new residences by UAE citizens, explaining the steps needed to create and verify an e-Services account for new users, as well as how to create a special refund requests account. The team also outlined how to submit and track a refund request, the deadline for submission, and the required documents. They also highlighted which potential applicants are eligible to recover VAT on their new homes, as well as which taxes are refundable.

Read more.

Commercial Establishment Shutdown for violating Tax Regulations worth AED 91 million

date: 20220828

Organized By: Khaleej Times

External URL: https://www.khaleejtimes.com/crime/dubai-tobacco-facility-shut-down-for-tax-violations-worth-dh91-million

Dubai August 28, 2022:

Following a joint inspection campaign by the Federal Tax Authority (FTA) in cooperation with the General Administration of the Federal Criminal Police in the Ministry of Interior and the General Command of Dubai Police represented by the General Department of Investigation and Criminal Investigation, a non-compliant commercial establishment was seized and closed in Dubai after it was caught selling tobacco-based products without Digital Tax Stamps.

According to the press release, a total of 5,430,356 packs were confiscated from the violators for not bearing the trademark of Tax Stamps and the tax due on these products amounted to 91,833,016 AED.

The Authority took necessary legal measures against the violating establishment, as part of its continuous efforts to strengthen control over markets and prevent malpractices. The Authority reaffirmed its commitment to enhancing collaboration with all relevant federal and local government entities in order to ensure tax compliance across the emirates.

Read more.

Read more on Digital Tax Stamps to Track and Trace Excisable Products

UAE: FTA Extends Timeframe to Pay Penalties till 31 December 2022

date: 20220810

Organized By: Federal Tax Authority

External URL: https://bit.ly/3p8fgNf

Dubai August 10, 2022:

FTA calls tax registrants to benefit from the extension of the grace period for the re-determination of administrative penalties on violating tax law until December 31, 2022.Tax registrants who were not able to benefit from redetermination by December 31, 2021, can now benefit from the one-year extension.

The decision has been taken by the Cabinet in line with the wise leadership’s directives to reduce burdens on business sectors and enhance their abilities to contribute more to the growth of the national economy. The decision is also a part of the FTA’s goal to provide a legislative environment that encourages a high level of tax compliance.

View more.

UAE: FTA sets Time Limit for Claiming Refund of VAT by Tourists

date: 20220808

Organized By: Federal Tax Authority

Dubai August 8, 2022:

The Federal Tax Authority (FTA) issued Decision 4 of 2022 for ‘Setting the Time Limit for Claiming Refund of VAT by Tourists’. Following are the key points of the decision.

  • One year time limit has been set up for tourists to claim the refund of Value Added Tax through bank card or by cash, from the date of verification of the refund request.
  • If Tourist does not claim the VAT refund within one year, in such case operator of the Tax Refunds for Tourist Scheme has to deposit the unclaimed amount to FTA within 1 month from expiration of the time limit of 1 year.
  • This decision will be effective from 1st June 2022.

View more.

UAE: Lawyer Penalized with Imprisonment and Fine for Tax Evasion

date: 20220805

Organized By: Khaleej Times

External URL: https://www.khaleejtimes.com/crime/uae-lawyer-fined-dh3-million-sentenced-to-3-years-in-jail-for-tax-evasion

Abu Dhabi August 5, 2022:

The Abu Dhabi Criminal Court convicted the accused Asim Ghafoor, who has American citizenship, of committing two crimes of tax evasion and money laundering. The court sentenced him to three years in prison and imposed a fine of AED 3 million, along with deportation from the UAE.

The case arose upon the American authorities’ request for judicial assistance regarding their investigations of the accused for making suspicious money transfers to the state.

The UAE Public Prosecution (PP) started its procedures by studying the judicial assistance request and verifying the nature of the financial transactions related to the aforementioned accounts and bank transfers. Suspicions of money laundering crime aroused as the accused carried out international transfers without proof of their source. Based on the findings of the investigations, the accused was found guilty by the Criminal Court on charges of tax evasion and money laundering.

Read more.

UAE's FTA increases Inspection Visits 104% in 6 months

date: 20220722

Organized By: WAM

External URL: http://wam.ae/en/details/1395303068351

Dubai July 22, 2022:

The Federal Tax Authority (FTA) significantly expanded its efforts in collaboration with various government departments, ministries and authorities to protect consumers from non-compliant products, combat tax evasion and ensure compliance with tax legislation and procedures.

During the first half of this year, the FTA carried out 9,948 inspection visits in local markets across the country in collaboration with the Ministry of Economy, Customs and Port Security and various Economic Development Departments.

Inspections conducted in the first half of 2022 increased by 104 percent compared to 4,878 inspections conducted in 2021 during the same period.

Read more.

Ajman Free Zone witnesses 33 percent Increase in Corporate Tax Companies

date: 20220715

Organized By: Emirates News Agency

External URL: https://www.wam.ae/en/details/1395303060045

Dubai July 15, 2022:

As the UAE gears up for the implementation of corporate tax in 2023. Ajman Free Zone records a significant increase of 33 percent in the number of corporate tax institutions.

H.E Eng. Ali AlSuwaidi, Director-General of Ajman Free Zone, stated that “The Federal Corporate Tax will become applicable in 2023 and is believed to propel the country forward.”

“Businesses are expected to align their relevant processes in order to ensure full compliance with the new law, and will need the assistance of specialized tax advisory firms specializing in this domain. As a global business hub, Ajman Free Zone is prepared to address these requirements with innovative solutions and cost-effective packages, while facilitating growth opportunities for tax advisory companies. Moreover, we recognize the importance of these entities to enhance our performance and ensure compliance with federal regulations.”

“In addition, the introduction of the corporate tax is set to position the UAE as an attractive destination for foreign direct investments. This will drive us to help companies grow and expand, streamline their business processes, and attract more foreign investors who can benefit from the competitive advantages of Ajman, one of the region’s top investment destinations,” he added.

Read more.

FTA released new Public Clarification on Excise Goods

date: 20220701

Organized By: Federal Tax Authority

External URL: https://bit.ly/3NFNy49

Dubai July 1, 2022:

The Federal Tax Authority (FTA) has issued a public clarification EXTP007 offering guidance on excise goods. The guide explains the scenarios where relief from excise tax may be granted for excise goods that are found to be deficient, shortage, considered as wastage, or where goods are intended to be destroyed.

The highlights of the public clarification are as follows:

Excise goods that are considered wastage or deficient when located within a designated zone will be treated as released for consumption and therefore will be subject to excise tax. However, as an exception, goods will not be considered to be released for consumption where:

  • Warehouse keeper notifies FTA within 30 days of discovering the deficiency in stock or shortage in quantity. This notification is given through a form on the e-services portal – Lost and Damaged declaration EX203B.
  • Shortage or deficiency is due to a legitimate cause accepted by FTA.
  • Where these conditions are met, a taxable person will not be required to account for excise tax on deficient or missing goods.

    View more in the guide.

    FTA released a new Public Clarification on Gold Making Charges

    date: 20220629

    Organized By: Federal Tax Authority

    External URL: https://tax.gov.ae/DataFolder/Files/Guides/VAT/VAT%20Guides/VATP029%20Gold%20Making%20Charge15062022.pdf

    Dubai June 29, 2022:

    The Federal Tax Authority (FTA) has recently released a Public Clarification – VATP029 on Gold Making Charges, iterating that the suppliers of the gold jewellery are required to pay VAT on the making charges component by charging the same in the invoice, which would not be covered under the ‘special reverse charge mechanism’.

    This Public Clarification provides detailed guidance on the VAT legislation application pertaining to making charges received by gold jewelers and further explains several instances where the making charges are taxable under VAT or not.

    View the file.

    FTA releases a Guide to acquaint Taxpayers with their Tax Obligations

    date: 20220615

    Organized By: Federal Tax Authority

    External URL: https://tax.gov.ae/ftatacsoft5cms/DataFolder/Files/Guides/VAT/Awareness/Get%20to%20know%20your%20Tax%20Obligations.pdf

    Dubai June 15, 2022:

    As a UAE business resident, you need to be aware of your varied tax obligations and abide by the tax laws in the country. That’s why it is important you understand your federal, state and local tax requirements. This will help you file your taxes accurately and make timely payments, thus saving you from penalties and encountering trouble with the law.

    In this regard, the Federal Tax Authority (FTA) has issued a Comprehensive Guide on ‘Know your Tax Obligations’ to orient Taxpayers with their tax liabilities. The guide includes:

    • Criteria for VAT registration
    • Supplies exempt from VAT
    • Zero-rated VAT supplies
    • VAT records and supporting documentation
    • Formation of tax groups
    • Creating and using e-services account
    • Obligations after tax registration
    • Elements of a valid tax invoice
    • Timely submission of tax returns and tax return periods
    • Entitlement to recover input tax
    • Contact details of FTA

    For more details log onto www.tax.gov.ae

    Israel and UAE boost ties by signing free trade pact

    date: 20220601

    Organized By: Reuters

    External URL: https://www.reuters.com/world/middle-east/israel-uae-sign-free-trade-deal-ambassador-2022-05-31/

    Dubai June 1, 2022:

    Israel and UAE sign a free trade agreement on May 31, 2022. The pact aims to boost ties between the two countries by eliminating most tariffs and lifting their annual bilateral trade to more than $10 billion within five years. As per the official data, Emirati-Israeli trade records stood at $1.2 billion in 2021.

    Tariffs will be removed or reduced on 96% of goods traded between the nations including foods, medicine, diamonds, fertilizers, jewelry and chemicals.

    The agreement was signed in Dubai by Minister of Economy and Industry Orna Barbivai and her counterpart, UAE Minister of Economy Abdulla bin Touq Al-Marri after months of negotiations.

    Read more.

    Kuwait General Administration of Customs signs MoU with Abu Dhabi Ports Group

    date: 20220513

    Organized By: WAM

    External URL: https://wam.ae/en/details/1395303034112

    Abu Dhabi May 13, 2022:

    A Memorandum of Understanding (MoU) was signed between Abu Dhabi Ports Group and Kuwait General Administration of Customs for Virtual Trade Corridor between the two countries. This agreement will help in simplification and facilitation of cross-border trade with the help of new policies, procedures and integrated solutions.

    With the establishment of the new virtual trade corridor, customs authorities in both countries will be able to access pre-arrival information for international cargo movements, making cross-validation of information significantly faster and promoting pre-clearance of goods. The MoU will also provide for accelerated procedures for expediting shipments of perishable goods and reduce dwell time at borders. The digital integration also has significant safety and security benefits, improving visibility for authorities over any possible risks associated with goods that move between the two nations, as well as reducing the inspection rate and simplifying procedures for authorization holders.

    UAE Ambassador to Kuwait, Dr. Al Neyadi said, “The UAE and Kuwait have a vast cooperation opportunity as they both have exceptionally promising markets. We are confident that the cooperation between AD Ports Group and Kuwait General Administration of Customs will enhance trade exchange between the two countries, and will support their efforts in achieving digital transformation goals, streamlining shipping procedures to reduce transportation and shipping costs, as well as expanding economic cooperation.”

    Read more.

    FTA's Board High on Development Plans to enhance Tax Systems

    date: 20220506

    Organized By: Federal Tax Authority

    External URL: https://tax.gov.ae/en/media.centre/news/federal.tax.authoritys.board.of.directors.adopts.ftas.financial.statements.for.2021.explores.development.plans.aspx

    Dubai May 6, 2022:

    During a meeting at the Authority’s headquarters, the Board of Directors reviewed a report on FTA’s plans to further enhance its tax system’s procedures and upgrade its services. The Authority wishes to offer customers fast and hassle-free services on an easy-to-use digital platform in line with international best practices. The report called for implementing a host of initiatives to advance the FTA’s performance through continuous development and follow-up that uplift its tax system efficiency to meet taxpayers’ aspirations. On a different note, the FTA Board also examined the progress made in developing the draft corporate tax law.

    HH Sheikh Maktoum issued directives to maintain the pace of upgrades to FTA’s services, boost the UAE’s competitive edge in terms of services offered, and support the country’s vision to become the world’s highest-ranking government on trust and performance indicators. The directives call for focusing on the customer and enhancing competencies to become a world leader in government services, drawing on UAE’s principles for the next 50 years.

    The Happiness of FTA Customers

    FTA’s reports demonstrate its efforts to maintain high performance scores across all activities and elevate its services to ensure satisfaction of all customers from varied segments of the society. His Highness iterated “FTA is committed to strengthening its relations with all entities involved in implementing the tax system in the government and private sectors, and to fulfilling its role in driving nationwide economic diversification policies through the administration and collection of federal taxes, in line with best practices.”

    HH Sheikh Maktoum explained “The Authority is constantly reviewing its executive regulation for each tax legislation in order to ensure top-level performance and streamlined procedures. The phases ahead will witness sweeping developments and upgrades to tax systems in order to enhance overall service quality.”

    Read more.

    UAE Corporate Tax law to benefit Free Zone-based Companies

    date: 20220505

    Organized By: Gulf News

    External URL: https://gulfnews.com/business/analysis/uae-corporate-tax-law-will-continue-incentives-for-free-zone-based-entities-1.1651386482142

    Dubai May 5, 2022:

    Since the announcement of UAE’s nine percent corporate income tax (CIT) from June 2023, a widely discussed topic has been the taxability of free zone entities. The great news is that Corporate Tax will continue to benefit free zone-based entities with a host of incentives.

    The UAE Ministry of Finance (MoF) issued a public consultation document inviting comments from stakeholders on the proposed legislation. This progressive step provides an opportunity for businesses to play a key role in formulating the UAE Corporate Tax law. The consultation document outlines the following points:

    • The UAE Corporate Tax regime will honour the tax incentives currently being offered.
    • Zero percent CIT rate will be applicable if the free zones entity earns income from outside UAE or within free zones.
    • Audited financial statements are a must.
    • Mainland branches of free zone entities will be taxed at the regular tax rate on mainland income.
    • Free zone entities with passive income such as dividend, royalty and interest from the mainland will attract a zero percent tax rate. Similarly, such entities in designated zones for VAT purposes supplying goods to the mainland will also be eligible for zero percent rate.
    • Free zone entities can be a regional sourcing hub; however payments made by mainland entities will not be a deductible expenditure.
    • Any other mainland sourced income to the free zone will disqualify it from the zero percent rate.
    • Free zone entities can make an irrevocable decision to be subject to the regular corporate tax rate.
    • For computing taxable income, accounting profit/loss would be the starting point. The default tax year would be the Gregorian calendar year. Dividends and capital gains would be exempt subject to certain conditions. Expenses on account of interest payments have been limited to 30 per cent of EBITDA and only 50 per cent of entertainment expenses would be allowed as deduction.

    Read more.

    MoF releases Public Consultation Document of the proposed Corporate Tax law

    date: 20220430

    Organized By: Federal Tax Authority

    External URL: https://www.mof.gov.ae/en/resourcesAndBudget/Pages/Corporate-Tax-Submission-Public-Consultation.aspx

    Dubai April 30, 2022:

    The Ministry of Finance (MoF) issued a Public Consultation Document of the proposed Corporate Tax Law by FTA UAE.
    Click here to view and download the document.

    MoF urges taxpayers to provide clear and concise comments or views on the main features and implementation of the UAE CT regime in the region. You are encouraged to focus your comments on aspects of the proposed CT regime that may help to reduce compliance cost or complexity and improve certainty for both the tax administration and taxpayers alike. Comments on areas not covered in this document are also welcomed.

    NOTE: Views to be submitted on or before 20 May 2022.

    For support call 800533336 or send an email to info@mof.gov.ae

    FTA launches 'Raqeeb', whistle-blower program for tax violations and evasion

    date: 20220429

    Organized By: Federal Tax Authority

    External URL: https://tax.gov.ae/en/media.centre/news/the.fta.launches.raqeeb.aspx

    Dubai April 29, 2022:

    The Federal Tax Authority (FTA) launched Raqeeb, a “whistle-blower program for tax violations and evasion that aims to raise the level of tax compliance in the UAE and reduce tax evasion cases.

    Effective from April 15, 2022, the whistle-blower program allows the Authority to receive reports from individuals on tax evasion cases, tax-related fraud, and violations of tax legislation. It also allows the Authority to verify the reports and grant monetary rewards to informants when certain conditions are met.

    The Authority emphasized the newly launched whistle-blower program aims to enhance transparency and competitiveness in the field of doing business, raise tax compliance rates, and boost tax awareness and society’s confidence in the tax system. The program also motivates individuals to carry out their social responsibilities and contribute to combating tax violations. Informants will be given monetary rewards if the report leads to a collection of tax amounts worth more than AED 50,000.

    Reporting information can be done through the Authority’s website, which contains a comprehensive guide on the reporting mechanism, procedure for obtaining monetary rewards and other legal matters related to the program.

    UAE: Tax Compliance rate increases in Q1

    date: 20220425

    Organized By: Khaleej Times

    External URL: https://www.khaleejtimes.com/business/compliance-on-tax-regulations-rises-in-q1

    UAE April 25, 2022:

    During the first quarter of 2022, businesses across the UAE have adopted the new tax structure and increased their compliance on regulations by depicting 2.42 percent growth in registration for value-added tax (VAT), as per data reports.

    The Federal Tax Authority (FTA) said the number of VAT registrants rose to 367,157 this quarter (January-March) compared to 358,468 in the same quarter last year.

    Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai, Deputy Prime Minister, Minister of Finance, and Chairman of the FTA Board of Directors, issued directives to maintain the pace of upgrades made to the FTA’s services in line with international best practices and digital transformation plans.

    Read more.

    FTA, UAE orients NBR, Bahrain on the Digital Tax Stamp Scheme

    date: 20220419

    Organized By: Federal Tax Authority

    External URL: https://tax.gov.ae/en/media.centre/news/bahraini.delegation.introduced.to.the.uaes.marking.tobacco.and.tobacco.products.scheme.aspx

    Dubai April 19, 2022:

    In a joint virtual meeting between officials from the Federal Tax Authority (FTA) and the National Bureau for Revenue (NBR), an official delegation from the Kingdom of Bahrain was oriented on the UAE’s Marking Tobacco and Tobacco Products Scheme.

    Implemented by FTA, the Digital Tax Stamps system enables the tracking of tobacco products electronically to combat tax evasion, protect consumers from fraud, prevent the sale of illegal products, and ensure the collection of due taxes on tobacco products sold in the market. FTA’s representatives briefed the attendees on the objectives, scope and steps for implementing the various phases of the Tobacco Products Marking Scheme.

    His Excellency Khalid Ali Al Bustani, Director-General of the FTA, discussed ways to enhance cooperation, develop relations and work together to build expertise in the field of taxation. His Excellency opined that the meeting reflects the strong bilateral relations between the two countries, as well as their commitment to strengthen their partnerships in the field of taxes by exchanging information and experiences. He added ‘These meetings are essential to enhance cooperation between tax authorities in neighboring countries and to benefit from the regulations applied in the tax sector.’

    Read more.

    FTA releases Whistle Blower Guide

    date: 20220415

    Organized By: Federal Tax Authority

    External URL: http://www.allaboutvat.com/wp-content/uploads/2022-04-14-Raqeeb-Whistleblower.pdf

    Dubai April 15, 2022:

    The Federal Tax Authority (FTA) released a user guide to help prepare informants on submitting information and leads in a confidential manner to inform the FTA of any natural or legal person evading tax, or committing other tax offenses. This measure aims to raise the level of tax legislation compliance in the country and reduce tax evasion cases.

      This guide is designed to help :

    • Understand the whistleblowing program.
    • Report business practices that violate the applicable tax legislation.
    • Understand the process and eligibility to receive a monetary reward where tax is successfully collected from tax offenders.
    • Provide accurate answers to the questions on the whistleblowing form by explaining what information is required to provide.
    • Understand the icons and symbols to complete the whistleblowing form.

    Read more about the Whistleblower System for violation and tax evasion.

    FTA forms a Youth Council to develop a Generation of Future Leaders

    date: 20220408

    Organized By: Federal Tax Authority

    External URL: https://tax.gov.ae/en/media.centre/news/fta.launches.youth.council.aspx

    Dubai April 8, 2022:

    The Federal Tax Authority (FTA) has launched a Youth Council, an initiative in alignment with the Federal Youth Authority. The council intends to support and empower the youth in the region.

    The newly formed council will simultaneously enable the FTA to benefit from the ideas and vision of its council members and fulfill several objectives. This includes adopting its members’ suggestions to continuously improve its services, preparing a new generation of future leaders and providing a platform for innovation. The outputs are linked with the FTA senior management for use in implementing the Authority’s future strategies.

    His Excellency Khalid Ali Al Bustani, Director-General of the FTA, stressed that this important step comes within the framework of government directions to enhance the empowerment of young people in various sectors and facilitate their role in public, community and business life.

    Read more.

    UAE: With Corporate Tax on cards, Ministry plans to Reduce Services Fees for Businesses

    date: 20220404

    Organized By: Khaleej Times

    External URL: https://www.khaleejtimes.com/uae/new-uae-corporate-tax-ministry-to-review-reduce-service-fees-for-businesses

    Dubai- April 4, 2022:

    The UAE Ministry of Finance (MoF) announced on 31 January 2022 that it will introduce a federal corporate tax regime in the region, which will come into effect on 1 June 2023 and will apply to net profits generated during financial years starting on or after 1 June 2023.

    In lieu of this, the MoF plans to review the services fees in all ministries and federal entities. The review aims to reduce the fees in order to lessen the financial burden on the business community in the country.

    Read more.

    FTA Confirms an Advanced System for VAT Refund for Tourists

    date: 20220401

    Organized By: Federal Tax Authority

    External URL: https://tax.gov.ae/en/media.centre/news/federal.tax.authority.confirms.systems.for.vat.refund.scheme.for.tourists.aspx

    Dubai- April 1, 2022:

    The Federal Tax Authority (FTA) confirmed that the VAT Refund Scheme for Tourists is witnessing continuous advancement and expansion. It has introduced more facilities to streamline and speed up the refund process for tourists eligible for a tax refund.

    The authority noted that the system witnessed a significant increase in demand recently, as travel restrictions eased out. Mega event EXPO 2020 also helped the tourism sector in the UAE recover from the setback caused by the pandemic. The government’s efforts in supporting the travel industry was also another contributing factor.

    The Refund Scheme for Tourists includes an integrated electronic system that creates a direct link between 13 air, land, and maritime entry/exit ports across UAE, with more than 13800 registered stores, allowing tourists to submit tax refund requests on their purchases. The system allows eligible tourists to reclaim the VAT incurred, provided they meet the specified criteria. The UAE is one of the first countries to implement such a Refund System characterized by the speed of completion, ease of procedures, and clarity.

    During the Global Tourism Forum held at Expo 2020 Dubai, FTA in collaboration with its authorized operator (Planet) for VAT Refund Scheme – showcased the pandemic’s implications on shopping patterns and consumers’ behaviours along with economic indicators of recovery globally and locally. The event brought together representatives from many departments including the Department of Economic

    Read more.

    FTA Launches New Website with Advanced Features to enhance Tax System Efficiency

    date: 20220323

    Organized By: Federal Tax Authority

    External URL: https://tax.gov.ae/en/media.centre/news/fta.launches.new.website.with.topnotch.features.that.promote.happiness.among.customers.and.enhance.tax.system.efficiency.aspx

    Dubai- March 23, 2022:

    The Federal Tax Authority (FTA) has launched an advanced website to provide an innovative digital experience, clarity of content and user-friendly browsing for taxpayers. The latest electronic display technologies on the site also enhance customers’ satisfaction and happiness, and further improve the tax system efficiency.

    The Authority stated that its new website www.tax.gov.ae is designed to educate and spread awareness about tax rules and regulations in the country. The website allows digital participation and provides services in accordance with needs of taxpayers.

    The platform offers 24/7 direct interaction between the Authority, business sectors, relevant authorities in the government and private sectors, and all interested groups inside and outside the country. FTA also reaffirmed that its new website incorporates advanced features to enable people of determination to access services and information with ease.

    Read more.

    FTA Actively Participates in UAE National Sports Day

    date: 20220316

    Organized By: Federal Tax Authority

    External URL: https://tax.gov.ae/en/media.centre/news/fta.participates.in.7th.uae.national.sports.day.with.a.full.agenda.of.athletic.activities.aspx

    Dubai – March 16, 2022:

    National Sports Day is held every year in the UAE with the participation of sporting enthusiasts in athletic, physical, and heritage activities the entire day. This national occasion is organized in line with directives from His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai.

    The Federal Tax Authority (FTA) participated in the 7th UAE National Sports Day under the theme ‘The UAE Unites Us’ with an agenda of athletic activities, that included bicycle racing, walking, and other sports activities. Prizes were distributed to the winners and participants.

    The activities helped promote a culture of sports and brought in positive vibes among FTA staff. The Authority encouraged its employees to make sports a part of their daily lives, to support both their physical and mental health.

    FTA Director General His Excellency Khalid Ali Al Bustani said that the sports events reported significant participation from their employees who exhibited great enthusiasm and a sporting spirit.

    View more.

    No Income Tax on cards in the UAE

    date: 20220228

    Organized By: Khaleej Times

    External URL: https://www.khaleejtimes.com/economy/is-uae-planning-to-introduce-income-tax-minister-clarifies

    Dubai – February 28, 2022:

    UAE’s Minister of State for Foreign Trade Thani bin Ahmed Al Zeyoudi clarified that income tax is not on the table in an interview with Bloomberg.

    The interview comes in the wake of the UAE’s MoF’s decision to introduce corporate tax on business profits from financial years starting on or after June 1, 2023. With a standard statutory tax rate of nine percent and a zero percent for taxable profits up to AED 375,000 to support small businesses and startups, the UAE corporate tax regime will be amongst the most competitive in the world. The minister opined that corporate tax was received positively by the country’s corporate sector as the tax will replace most of the fees companies are currently paying.

    Based on the MoF’s Corporate Tax FAQs, individuals will also be subject to corporate tax when they conduct business in the UAE under a commercial license 1.e under a freelance license).

    FTA showcases Initiatives During ‘UAE Innovates 2022’

    date: 20220218

    Organized By: Federal Tax Authority

    External URL: https://www.tax.gov.ae/en/press-releases/Key-Initiatives-Showcased-During-UAE-Innovates-2022

    Dubai – February 18, 2022:

    The Federal Tax Authority (FTA) has launched several initiatives set to take place across the UAE throughout February. The ‘UAE Innovates 2022’ initiative would promote a culture of government innovation by engaging the community in ambitious projects to design future experiences and develop initiatives that support the government’s plans to shape a better future, in collaboration with individuals and entities.

    His Excellency Khalid Al Bustani, Director-General, FTA, asserted the Authority’s commitment to participating in the annual activities of the ‘UAE Innovates’ initiative. Through its participation, FTA encourages innovation and engages the public in the digital transformation process and the National Innovation Strategy, which aims to position the UAE among the most innovative countries around the world.

    FTA is participating in the UAE Innovates Exhibition at the Festival Garden in Expo 2020 Dubai as part of the Innovation Month. The FTA team will introduce visitors to its innovative digital and electronic system for the Tourist VAT Refund Scheme to process requests easily and on time. The system reflects the UAE’s ongoing efforts to support the tourism sector and position itself as an ideal tourist destination.

    Read more.

    Dubai Customs issues New Policy on Client Registration for acquiring Customs Code

    date: 20220217

    Organized By: Dubai Customs

    External URL: https://www.dubaicustoms.gov.ae/en/PoliciesAndNotices/Policies/DCP53_2022.pdf

    Dubai – February 17, 2022:

    Dubai Customs released a new Policy i.e Customs policy no. 53/2022 on client registration for acquiring customs codes.

    This Policy comes into effect from the date of issuance and supersedes any conflicting provisions. Earlier, Customs policy no. 28/2009 dated 22 October 2009 detailed the client registration-related matters.

    The new policy regulates the client registration procedure for obtaining special identification codes and simplifies the transactions with Dubai Customs. This enables clients to adhere to stipulations laid for different custom transactions.

    UAE to introduce 9% corporate tax on business profits from June 1, 2023

    date: 20220201

    Organized By: Khaleej Times

    External URL: https://www.khaleejtimes.com/uae/uae-announces-new-tax-to-go-into-effect-next-year

    Dubai – February 1, 2022:

    The Ministry of Finance has announced that the UAE will introduce a federal corporate tax on business profits effective for financial years starting on or after June 1, 2023. With a standard statutory tax rate of 9 percent, the UAE corporate tax regime will be amongst the most competitive in the world.

    The Ministry also confirmed that there will be no tax on profits of up to AED 375,000, in a move to support small businesses and startups.

    The corporate tax will apply to all businesses and commercial activities alike, except for the extraction of natural resources which will remain subject to Emirate level corporate taxation.

    No corporate tax will apply on personal income from employment, real estate and other investments, or any other income earned by individuals that do not arise from business or other forms of commercial activity.

    UAE businesses will be given sufficient time to prepare for the introduction of corporate tax. The Ministry of Finance will issue further information on the new tax regime toward the middle of the year to help businesses get ready.

    Read more.

    FTA Extends Grace Period upto 1 year to pay penalties

    date: 20220127

    Organized By: Federal Tax Authority

    External URL: https://www.tax.gov.ae/en/press-releases/Federal-Tax-Authority-One-Year-Extension-on-Grace-Period-to-Benefit

    Dubai – January 27, 2022:

    The UAE’s Federal Tax Authority (FTA) extended the grace period to benefit from re-determination of administrative penalties on violating tax laws until December 31, 2022.

    The reduced administrative penalties amount to 30 percent of the total unpaid penalties that were imposed before June 28, 2021. The authority further elaborated that tax registrants who were not able to benefit from redetermination by December 31, 2021, can benefit until December 31, 2022.

    The Cabinet decision provided an opportunity for the business sector to benefit from the reduction of administrative penalties. The decision will reduce burdens on business sectors and enhance their abilities to contribute more to the growth of the national economy. The decision is also a part of the FTA’s goal to provide a legislative environment that encourages a high level of tax compliance.

    Read more.

    Dubai Customs amend Procedures for cross-border e-commerce

    date: 20220118

    Organized By: Dubai Customs

    External URL: https://www.dubaicustoms.gov.ae/en/PoliciesAndNotices/Notices/CN15_2021.pdf

    Dubai – January 18, 2022:

    Government of Dubai and the Dubai Customs Authority issues Customs notice No. (15/2021) for e-commerce companies in the region.

    It applies to commercial companies, including SMEs, free-zone companies, logistics companies, and customs warehouses that provide online retail and selling services for goods and products through e-commerce channels. Both B2C and B2B transactions are covered in the notice.

    The notice has been issued for the purpose of simplifying and facilitating customs procedures and regulating the movement of goods through cross-border e-commerce channels.

    FTA confirms systems’ readiness of VAT Refund Scheme for Tourists

    date: 20211221

    Organized By: Emirates News Agency

    External URL: https://www.wam.ae/en/details/1395303004260

    UAE- December 21, 2021:

    The Federal Tax Authority (FTA) organized field tours to the ‘Self-Service Kiosks’ in Dubai International Airport to ensure the system’s readiness. (As part of the VAT Refund Scheme for Tourists)

    The tour was arranged in line with FTA’s strategy to offer services that meet taxpayers’ aspirations and its commitment to abiding by Cabinet Decision No. (41) of 2018 on Introducing the Tax Refunds for Tourists Scheme.

    During the tour, FTA Director-General Khalid Ali Al Bustani claimed that the services simplify VAT refund requests for tourists on purchases they make during their stay in the UAE. The streamlined procedure identifies taxes eligible for refunds, verifies purchased items are with the tourist and facilitates tax recovery.

    Read more.

    FTA has issued Reconsiderations User guide

    date: 20211216

    Organized By: Federal Tax Authority

    External URL: https://www.tax.gov.ae/-/media/Files/EN/PDF/Guides/Reconsiderations-User-GuideEnglishV10-17-11-2021.pdf

    UAE- December 16, 2021:

    The FTA of UAE has issued a Reconsiderations User guide for both Registered and Non-registered users.

    The guide in detail explains in detail the process to be followed for filing of reconsideration form. It helps taxpayers navigate the e-Services portal from a systems perspective, to successfully complete the filling of the Reconsiderations form. It is designed to help you:

    • Create an e-Services account with the FTA.
    • Provide accurate answers to the questions on the Reconsideration form by explaining the information required.
    • Understand the icons and symbols you see while completing the form.

    It is pertinent to note that since 19 November 2021 , Reconsideration requests service are available on the e-services portal instead of FTA’s website.

    FTA publishes new Public Clarification on 'Mobile Phones, Airtime, and Data Packages Made Available to Employees for Business Use'

    date: 20211214

    Organized By: Federal Tax Authority

    External URL: https://www.tax.gov.ae/-/media/Files/FTA/links/Public-Clarification/VATP028---Input-Tax-Recovery---Mobile-Phones-Airtime-and-Data---29-11-2021.pdf

    UAE- December 14, 2021:

    Due to COVID-19, there has been an increase in work-from-home arrangements, resulting in some instances where employers pay for Phones, Airtime, and Packages’ expenses to allow employees to perform their roles remotely. Many businesses enter into agreements with telecommunication service providers to make mobile phones, airtime (call minutes) and data packages available to their employees to perform their roles outside office hours or at locations away from the office.

    In this regard, the UAE Federal Tax Authority (FTA) published a new VAT Public Clarification (VATP028) that provides guidance on the application of the VAT legislation in respect of the recovery of input tax incurred on Phones, Airtime, and Packages acquired for business use.

    3 varied ways to check the status of your submitted request to FTA

    date: 20211116

    Organized By: Federal Tax Authority

    External URL: https://twitter.com/uaetax/status/1460240322357776390

    UAE – November 16, 2021:

    Here are 3 different ways in which you can check the status of your submitted request to the Federal Tax Authority (FTA).

    • Visit FTA website. Log into the e-services portal. (Enter username and password to log in). Go to your dashboard and check the status of your request.
    • Call Center- Get in touch with FTA’s representative by calling 600599994
    • Send your queries via email to info@tax.gov.ae

    Learn about them by viewing the video.
    View the video in arabic.

    FTA's new procedures for requesting reconsideration and objections to its decisions

    date: 20211110

    Organized By: Federal Tax Authority

    External URL: https://www.tax.gov.ae/en/press-releases/FTA-begins-implementing-new-procedures-for-applications-requesting-reconsideration

    UAE – November 10, 2021:

    The Federal Tax Authority (FTA) has announced the implementation of new procedures for tax registrants who apply to the Authority for a review of their decisions from November 1, 2021.

    The procedures relate to applications for reconsideration of or objections to the Authority’s decisions. They include the decisions made by the Tax Disputes Resolution Committee, challenges to procedures or controls for paying by instalment, and the waiving of administrative penalties.

    The Authority asserted that any person has the right to submit a request to reconsider any decision provided that the request includes reasons and meets the prescribed conditions, within 40 business days from the date he was notified of the decision. The Authority will review the request and issue a decision, citing reasons within 40 business days from the date of applicant receipt. The applicant will be informed about it within five business days from the date of issuance of the decision.

    Additionally, the new amendments allow tax registrants to submit an objection to the Authority’s decision regarding applications of reconsideration to the Tax Disputes Resolution Committee. The objection submitted to the committee will not be admissible:

    • If a reconsideration request has not been previously submitted to the Authority.
    • If the tax in connection with the objection has not been settled.
    • If the objection is not submitted within 40 business days from the date of notification of the Authority’s decision.

    Read More.

    Amendment in Tax Rules for supply of Goods in Designated Zones

    date: 20211103

    Organized By: Federal Tax Authority

    External URL: https://www.khaleejtimes.com/business/fta-ameds-law-to-avoid-double-vat-taxation-on-supply-of-goods-in-designated-zones

    UAE – November 3, 2021:

    The Federal Tax Authority (FTA) has announced that amendment on tax treatment for supply of goods in designated zones and connected shipping or delivery services to avoid VAT double taxation has come into effect as of October 30,2021.

    In a statement, the FTA has confirmed the importance of Cabinet Decision No. (88) of 2021 to amend Article 51 of Cabinet Decision No. (52) of 2017 on the Executive Regulation of Federal Decree-Law No. (8) of 2017 on value-added tax (VAT), and said latest move aims to avoid VAT double taxation on supplied goods in the designated zones and facilitate procedures to non-resident suppliers operating in the designated zones, as these goods will be treated —under certain conditions — outside the scope of tax, hence, no tax registration is required from the supplier.

    View the newly issued VAT Public Clarification explaining the New Amendment in the Tax Treatment for the Supply of Goods in Designated zones and Connected Shipping or Delivery Services.

    H.H. Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum Heads 1st Meeting as Chairman of the FTA BOD

    date: 20211027

    Organized By: Federal Tax Authority

    External URL: https://www.tax.gov.ae/en/press-releases/board-of-directors-holds-1st-meeting-with-hh-sh-maktoum-bin-mohammed-as-chairman

    UAE – October 27, 2021:

    His Highness Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai, Deputy Prime Minister, Minister of Finance, and Chairman of the FTA Board of Directors (BOD), chaired the first meeting of the FTA Board.

    Furthermore, His Excellency Mohammed bin Hadi Al Hussaini, Minister of State for Financial Affairs, was elected as Vice-Chairman of the FTA Board of Directors during the FTA Board’s third meeting of the year, held on October 20, 2021 at the FTA headquarters in Dubai.

    A comprehensive progress report on various ongoing development projects and the FTA’s recent achievements and agenda for the future were deliberated upon. Additionally, the Board approved the Authority’s financial statements for the second quarter that ended on June 30, 2021, in accordance with international accounting standards.

    H.H. Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum asserted that the Authority will continue its efforts to upgrade its services with a series of developmental plans in line with highest standards. The FTA is committed to offering its full support to business sectors and encouraging Taxable Persons to comply with tax legislation, most notably with the FTA’s advanced and integrated e-Services.

    View more highlights of the meeting.

    FTA: More than 107.1% Growth in VAT Refund Applications from UAE Nationals on Building New Residences

    date: 20211026

    Organized By: Federal Tax Authority

    External URL: https://www.tax.gov.ae/en/press-releases/federal-tax-authority-records-more-than-growth-in-vat-refund

    UAE – October 26, 2021:

    The Federal Tax Authority (FTA) has processed more than 9,640 requests to recover Value-Added Tax (VAT) incurred by UAE nationals on building their new residences by September 2021 – more than 107.1% growth from the numbers recorded in the first nine months of 2021 compared to the total number of processed requests until the end of 2020. (View the statistics )

    The Authority revealed that in the first nine months of 2021, over 4,984 applications from citizens requesting a refund of the VAT they incurred on building their new residences were approved, up from the 3,147 requests completed in 2020, 1,399 applications processed in 2019, and just 110 requests in 2018 – the year the VAT Refund Scheme for UAE Nationals Building New Residences was launched.

    FTA Director General His Excellency Khalid Ali Al Bustani attributed the massive growth in the number of citizens benefiting from the Scheme to the efforts the Authority has made with its wide-reaching awareness campaigns since the launch. “FTA will continue to streamline the process for UAE citizens eligible for a VAT refund, allowing them to submit their requests easily on the FTA website,” he asserted. “These upgradations aim to simplify the process of VAT Refund, in line with the UAE leadership’s vision to develop a modern housing system that caters to citizens’ needs and offer them the best quality of life available.”

    Read more.

    FTA's NEW Digital Tax Stamp Design - FAQs

    date: 20211025

    Organized By: Federal Tax Authority

    External URL: https://www.tax.gov.ae/-/media/Files/EN/PDF/Guides/DTS-FAQ-Eng.pdf

    UAE – October 25, 2021:

    The FTA has released FAQS on the new Digital Tax Stamp Design that will replace the existing ones which are presently in use since January 1, 2019, as per Cabinet Decision No. (42) of 2018 on Marking Tobacco and Tobacco Products.

    UAE: FTA calls on Expo 2020 participants to avail VAT refund scheme

    date: 20211012

    Organized By: Gulf Today

    External URL: https://www.gulftoday.ae/business/2021/10/11/wonderful-turnout

    UAE – October 12, 2021:

    Expo 2020 Dubai welcomed 411,768 ticketed visits in its first 10 days since the start of the mega event

    Meanwhile, the Federal Tax Authority (FTA) has called on official participants to avail the Value Added Tax (VAT) refund scheme for taxes paid on goods and services connected with Expo 2020 Dubai.

    Khalid Ali Al Bustani, Director-General of the FTA, said that the FTA has been cooperating with all relevant authorities to prepare for a smooth implementation of the procedures for the refund of VAT paid on goods and services connected with Expo 2020 Dubai.

    Al Bustani stated that the FTA provides a telephone service to facilitate and expedite VAT registration procedures for international participants. The service offers clear instructions and details about the registration requirements. The FTA also processes special VAT refund requests, submitted through the integrated platform office, dedicated to receiving and processing requests by participants not registered for VAT.

    The FTA has issued a comprehensive guide for official participants in Expo 2020 Dubai, which addresses the categories of taxes that can be refunded.

    • The first category is VAT incurred by official participants on goods and services in direct connection with the construction, installation, alteration, decoration, and dismantlement of exhibition space.
    • The second category is the VAT incurred by the official participants on goods and services in direct connection with the works and activities of organizing and operating the official participant’s exhibition space, any presentations and events taking place within the Expo 2020 site.


    View the Guide to claim your Refund of VAT Paid on Goods and Services Connected with Expo 2020 Dubai
    .

    Read more.

    New Services launched by FTA to ease VAT refund process for Emiratis building new residences

    date: 20211003

    Organized By: Khaleej Times

    External URL: https://www.khaleejtimes.com/business/real-estate/uae-fta-launches-new-services-to-ease-vat-refund-process-for-emiratis-building-new-residences

    UAE- October 3, 2021:

    The Federal Tax Authority (FTA) has released new efficient services to help UAE nationals claim with ease the Value-Added Tax (VAT) they incurred on their newly built residences.

    Different kinds of services are launched to raise the audience’s awareness, provide them with easy access to information and allow direct communications with FTA representatives. The two-way process also allows them to obtain feedback, along with top-quality services.

    The initiative includes a weekly interactive virtual workshop, the “Virtual Session”, that brings housing authorities contractors, engineers, and construction experts in the UAE to offer consultations and clarification regarding the VAT refund process, for the benefit of Emiratis.

    The new services also involves a “Personal Assistant” service, allowing applicants to book an appointment to directly communicate with FTA employees about the refund process.

    For more information click here.

    UAE elected vice-president of Belt and Road tax forum

    date: 20210925

    Organized By: Federal Tax Authority

    External URL: https://www.tax.gov.ae/press-releases/UAE-Elected-Vice-President-of-Belt-and-Road-Initiative-Tax-Administration-Cooperation-Forum

    UAE- September 25, 2021:

    For the second time in a row, the UAE has been elected as Vice President of the Belt and Road Initiative Tax Administration Cooperation Forum (BRITACOF) in its second edition, during the meetings that brought together participants from 57 countries around the globe.

    The UAE represented by FTA Director General His Excellency Khalid Ali Al Bustani – was elected Vice President of the Forum for the second time after being elected in the first meeting of the Supervisory Board in China in April 2019.

    The Second Belt and Road Initiative Tax Administration Cooperation Forum and the accompanying virtual exhibition discussed ways to collaborate on tax administration coordination between the Belt and Road initiative states. The three-day forum conducted via videoconferencing discussed the opportunities of the digital economy and analyzed ways to build an integrated digitalized tax system.

    Click here to view more.

    FTA adopts New Design for Digital Tax Stamps

    date: 20210924

    Organized By: Federal Tax Authority

    External URL: https://www.tax.gov.ae/press-releases/Federal-Tax-Authority-Adopts-New-Design-for-Digital-Tax-StampsAdhering-to-Best-and-Latest-Standards

    UAE- September 24, 2021:

    The Federal Tax Authority (FTA) announces the adoption of new features for ‘Digital Tax Stamps’ to be inserted on the packaging of all types of cigarettes, including electrically heated cigarettes and waterpipe tobacco (‘Mu’assel’) sold in local markets.

    The new Stamps will replace the existing ones which are presently in use since January 1, 2019, as per Cabinet Decision No. (42) of 2018 on Marking Tobacco and Tobacco Products.

    Decision No. (3) of 2021 for the new design will go into effect on October 1, 2021, to formally adopt the newly redesigned ‘Digital Tax Stamps’.

    • The first category of Stamps goes into effect from October 1, 2021 where the Stamps with the red design will be placed on packaging of all types of cigarettes, while those with the purple design will be applied to the packaging of electrically heated cigarettes and waterpipe tobacco, which are authorized for trade in local markets and arrival halls at airports.
    • The second category goes into effect January 1, 2022, where the Stamps with the green design would be placed on all cigarette packages, while those with a blue design would be applied to the packaging of electrically heated cigarettes and waterpipe tobacco, which are authorized for trade in duty-free shops in departure halls at airports.

    The ‘Digital Tax Scheme for Tobacco and Tobacco Products’ aims to digitally track tobacco products from production and until they reach the end consumer to ensure compliance with the latest and best standards and ensure taxpayers pay the due Excise Tax. The redesign of the stamps is part of FTA continuous improvement plans that aim to enhance FTA procedures, protect consumers from commercial fraud, and combat tax evasion using advanced technological systems.

    Click here to view more.

    FTA encourages Registrants to Benefit from the Administrative Penalties Redetermination

    date: 20210923

    Organized By: Federal Tax Authority

    External URL: https://www.tax.gov.ae/press-releases/FTA-Calls-on-Tax-Registrants-To-Re-Determine-Tax-Penalties-14Sep-2021

    UAE- September 23, 2021:

    The Federal Tax Authority (FTA) has called on registrants to take advantage from the administrative penalties redetermination – to be equal to 30% of the total unpaid penalties. View the Cabinet Decision No. 49 of 2021 on Amending Provisions of Cabinet Decision No. 40 of 2017 on the Administrative Penalties for Violation of Tax Laws.

    The decision outlines 16 types of administrative penalties that have either been reduced or had the method of calculation amended, which came into effect on June 28, 2021, and includes reductions on administrative penalties to help taxpayers meet their obligations.

    FTA outlined a set of conditions that need to be met in order to benefit from the redetermination of penalties.

    First, the administrative penalty must have been imposed under Cabinet Decision No. 40 of 2017 before June 28, 2021, and that the administrative penalty due were not settled in full until June 27, 2021. Furthermore, the registrant should settle all due payable tax by December 31, 2021, and settle 30% of the total unsettled administrative penalties imposed before June 28, 2021, no later than December 31, 2021.

    The FTA indicated that, should the registrant meet all the stipulated conditions, the administrative penalties will be re-determined to equal 30% of the total unpaid penalties that will appear on the FTA’s electronic system after December 31, 2021.

    Click here to view more.

    UAE: FTA offers 30% discount on unpaid penalties

    date: 20210915

    Organized By: Khaleej Times

    External URL: https://www.khaleejtimes.com/news/uae-tax-authority-offers-30-reduction-on-unpaid-penalties

    UAE- September 15, 2021:

    Tax regulation violators within the UAE can benefit from a 30 percent discount on unpaid penalties as per the recent Cabinet decision, the Federal Tax Authority (FTA) stated.

    The liberal move intends to boost the UAE’s global business competitiveness by establishing a tax legislation environment that encourages self-compliance and offers significant support to the national economy.

    The Cabinet Decision No. 49 of 2021 on Amending Provisions of Cabinet Decision No. 40 of 2017 outlines 16 types of administrative penalties that have either been reduced or had the method of calculation amended.

    The amendments include administrative violations related to the application of Federal Law No. 7 of 2017 on Tax Procedures, Federal Decree-Law No. 7 of 2017 on Excise Tax, and Federal Decree-Law No. 8 of 2017 on Value Added Tax.

    Read more.

    Electronic products under AED 30,000 exempted from Dubai customs service fees

    date: 20210903

    Organized By: Dubai Customs

    External URL: https://www.dubaicustoms.gov.ae/en/PoliciesAndNotices/Notices/CN_13_2021.pdf

    UAE- September 3, 2021:

    As per the Customs notice No. (13/2021) a new service charge exemption is applicable for movement of goods between companies.

    The exemption is effective from 14 November 2021. The notice stipulates that Customs declarations with value not exceeding AED 30,000 shall be exempted from relevant Customs services charges.

    The provisions of this notice apply to customs declarations in the following movement cases:

    • From GCC countries and rest of the world to the local market.
    • From the freezones and customs warehouses to the local market.
    • From GCC countries and the rest of the world to the freezone and customs warehouses.
    • From the local market to GCC countries and rest of the world.
    • From local market to the freezones and customs warehouses.
    • From freezones and customs warehouses to GCC countries and the rest of the world.
    • Temporary admission into the local market from rest of the world, freezones , customs warehouses and GCC countries.
    • Transfer within the same freezone.
    • Transit between freezones in the Emirate of Dubai
    • Transfer between customs warehouses in the Emirate of Dubai
    • From customs warehouses to freezones.
    • From freezones to customs warehouses.

    The notice also reiterates that companies wishing to trade via e-commerce channels must first register on the Dubai Customs’ customer registration system. Additionally, it is clarified that logistics companies wishing to clear goods on behalf of their client companies must also register such clients in the same system.

    This is in line with Dubai’s e-commerce strategy, which aims to strengthen Dubai’s position as the global capital of the new economy and global logistics platform for the region and create a flexible business environment.

    Expo 2020 Official Participants are eligible for VAT Refund Scheme

    date: 20210811

    Organized By: Federal Tax Authority

    External URL: https://tax.gov.ae/en/services/VAT-Refund-of-Goods-and-Services-for-Expo-2020

    UAE – August 11, 2021:

    Did you know exhibitors in Expo 2020 are entitled to request for a refund on the VAT expenses incurred on the goods and services related to the exhibition?

    FTA introduced a VAT Refund Scheme for Expo 2020 official participants to claim VAT refund incurred on expenses. Expo 2020 is a registered exhibition scheduled to take place in Dubai from 20 October 2020 to 10 April 2021. The official participants include countries and organizations that have received and accepted the official invitation from the UAE to participate in Expo 2020 as an exhibitor.

    Cabinet Decision no. 1 of 2020 on the Refund of VAT Paid on Goods and Services for Official Participants in Expo 2020 Dubai replaces the Cabinet Decision no. 1 of 2019, which was issued earlier by the FTA. View the latest guide.

    The guide provides guidance for official participants of Expo 2020 on the following:

    • The conditions which must be met to be entitled to claim the VAT refund.
    • The process to be followed to claim VAT.
    • Information required to complete the relevant forms.
    • Additional details on the registration requirements along with the importing and customs details are also covered in this guide.

    These are 5 categories in which vat can be claimable are:

    • VAT incurred by the Official Participant on Goods and Services in direct connection with the construction, installation, alteration, decoration and dismantlement of their exhibition space.
    • VAT incurred by the Official Participant on Goods and Services in direct connection with the works and activities of organizing and operating the Official Participant’s exhibition space and any presentations and events within the Expo 2020 site.
    • VAT incurred by the Official Participant on Goods and Services relating to the actual operations of the Official Participant, provided that the value of each Good or Service for which the Office of the Official Participant makes a claim is not less than AED 200.
    • VAT incurred by the Official Participant in connection with all operations, services and activities provided for the purpose of participation in Expo 2020 Dubai, whether located within or outside the boundaries of the Expo 2020 Dubai site.
    • VAT incurred on import of Goods for personal use of the Official Participant’s Section Commissioner-General, Section Staff and the Beneficiaries

    A few simple steps need to be followed for the refund:

    • Log into the FTA account.
    • Apply for refund as per the process available in the VAT refund user guide.
    • The FTA will review and approve the request within 20 working days.

    Contact FTA’s Service Channels:

    For registrants in the FTA system:
    Link: eservices.tax.gov.ae

    For non-registrants in the FTA system:
    Email : expo2020@tax.gov.ae

    To know more about the procedure of the service click here.

    Contact our tax consultants:

    Our tax experts can offer you consultancy services in connection with your activities related to Expo 2020. The list includes registration with FTA, eligibility of input tax recovery, VAT returns, submission of VAT refund application and timely completion of respective documentation.

    UAE Nationals can request a VAT Refund for a Newly Built Residence

    date: 20210810

    Organized By: Federal Tax Authority

    External URL: https://tax.gov.ae/-/media/Files/EN/PDF/Guides/VAT-Refund-for-UAE-Nationals-Building-Residences---EN---24-05-2021.pdf

    Dubai- August 10, 2021:

    Did you know that UAE Nationals can request a VAT refund for a newly built building which meets the legal requirements of a new residence?

    Emirati nationals have the right to a 5 percent value added tax (VAT) refund when constructing their homes, the Federal Tax Authority (FTA) has stated. FTA has issued VATGRH1 guide on ‘VAT Refund for UAE Nationals Building New Residence‘ to facilitate homeowners on how to claim the refund. It specifies that only UAE citizens have the right to ask for the refund. Also note that the refund option is available only for VAT relating to expenses incurred on the construction of a new residence for themselves or their family members and not for any commercial properties.

    The VAT refund is to be claimed after completion of the new building which is ready to use. The owner must file a VAT refund application within 12 months from the date of completion of the newly built residence. Processing can take up to 20 days.

    To read more about the VAT Refund Scheme on new construction click here.

    FTA records 655 Tax Violations amounting to Dh 71.48 m in Q2-2021

    date: 20210808

    Organized By: Gulf News

    External URL: https://gulfnews.com/business/markets/uaes-federal-tax-authority-cracks-down-on-retailer-violations-finds-dh7148m-in-sums-owed-in-q2-2021-1.1626177690432

    Dubai- August 8, 2021:

    The Federal Tax Authority (FTA) conducted inspection checks of the local markets in tandem with the Ministry of Economy (MoE), Federal Customs Authority and other authorities.

    It is astonishing to know that FTA recorded 655 tax violations amounting to Dh71.48 million in the second quarter of 2021. Around 2.86 million unregistered tobacco products without the Digital Tax Stamp (DTS) stamp were detected by FTA in addition to 202,000 other excise goods which include carbonated, energy and sweetened drinks/beverages.

    FTA ramped up these inspections to ensure the compliance with tax procedures and protect consumers from trafficked products that do not adhere to quality specifications stipulated in the UAE.

    Read More.

    Dubai Customs launches Trader Export Report service to enhance compliance and boost revenues

    date: 20210802

    Organized By: Gulf News

    External URL: https://gulfnews.com/business/dubai-customs-launches-trader-export-report-service-to-enhance-compliance-abidance-and-revenues-1.1627711579620

    UAE- August 2, 2021:

    Dubai Customs, in cooperation with the Federal Tax Authority (FTA), launched the Trader Export Report service to help businesses overcome the challenges, enhance compliance and boost their revenues. The new service will help clearance and shipping agents achieve Zero Rating of supply of goods exported within 90 days of export date regardless of the import date.

    The service was launched virtually in the presence of Ahmed Mahboob Muabih, Director General of Dubai Customs and Khalid Ali Al Bustani, Director General, FTA, along with Dubai Customs’ executive directors and heads of customs departments and centers.

    Traders must meet all the Zero Rating requirements that include owning an exit certificate and relevant commercial documents to prove exportation process, and exporting the shipment within the specified time frame. This service applies to imported goods only that will be exported later and not to goods possessed locally.

    The new service will be available on Dubai Trade Portal, and it will apply to certain types of declarations including:

    • Import to Local from ROW
    • Import to Local from GCC (Statistical Import)
    • Import for Re Export to Local from ROW
    • Import to CW from ROW
    • Transit (ROW to ROW)
    • Cargo Transfer from CTO to CH (Different Locations)

    Read More.


    *Zero-rated supplies in VAT refers to the taxable supply of goods and services on which VAT is charged at zero rate.
    Zero rated VAT and exempted VAT are different from each other. Zero rated VAT in UAE means you must charge VAT at 0 percent to your customers. Exempt VAT means you must not charge VAT.

    FTA published an Emailer on the steps for Making Payments through e-Services

    date: 20210714

    Organized By: Federal Tax Authority

    UAE- July 14, 2021:

    Federal Tax Authority (FTA) have circulated an Emailer to Tax registrants on 13 July 2021 elaborating on the Steps for Processing Payments through e-Services.

    Click here to download the Circular in pdf version.

    Submit VAT Reconsideration Form to challenge FTA's Decision

    date: 20210705

    Organized By: Federal Tax Authority

    External URL: https://www.tax.gov.ae/en/e-forms/reconsideration-form


    UAE- July 5, 2021:

    Businesses that function in the UAE must have thorough knowledge about the Tax Laws in the region. The Federal Tax Authority (FTA) is the Governing Authority that regulates tax laws, tax collections and penalties for non-compliance. A failure to comply with the VAT/Tax regulations will attract heavy penalties.

    However, if the businesses are not satisfied with penalties imposed by FTA, they can officially request the Authority to revise it by filing a VAT reconsideration form (as per Article (27) of the Federal Law No. (7) of 2017 on Tax Procedures). This option is to address the grievances of the businesses that are not satisfied with the penalties levied or other decisions imposed on them by the FTA and to get a waiver on the penalties.

    The request for reconsideration must be submitted via the FTA’s website within 20 business days from the date of being notified of the decision being reconsidered. The request form must be duly filled in Arabic for submission, otherwise it will be rejected. Along with the application, all the supporting documents and evidence should also be submitted in the Arabic language. You can avail assistance from experienced Tax agents in Dubai to address the language barrier and gain expert knowledge on the tax regulations.

    FTA may levy penalties on businesses for the following reasons:

    • Failure to file VAT Returns within the time frame
    • Delay in settlement of due tax
    • Late VAT registration
    • Late VAT deregistration
    • Lack of proper records or structured documentation
    • Submission of erroneous documents/ incorrect information

    The UAE VAT reconsideration form can also be submitted when the taxable person disagrees over FTA’s decisions such as VAT rate treatment, exception of registration and other tax assessments.

    Read more…

    FTA has set up Taxpayer Support Centers in Dubai and Abu Dhabi

    date: 20210703

    Organized By: Federal Tax Authority

    UAE- July 3, 2021:

    FTA has set up Taxpayer Support Centers in Dubai and Abu Dhabi. These additional contact centers have dedicated staff to respond to all tax related queries and support taxpayers with any issues they may be facing.

    Below are the address of the Taxpayer Support Centers:

    Dubai:

    Central Park Towers, DIFC P2 Floor

    Abu Dhabi:

    Emirates Property Investment Company, Ground Floor.

    FTA's New Decision Emailer urges Tax Payers to review their Tax Payables and pay Taxes before 28 June 2021

    date: 20210627

    Organized By: Federal Tax Authority

    External URL: https://www.tax.gov.ae/press-releases/Electronic-Tax-Balance-Services

    UAE- June 27, 2021:

    Federal Tax Authority (FTA) released a New Decision Emailer on 25 June 2021 informing tax payers that they can view how much of their balance is related to tax and how much is related to administrative penalties on the My Payments page, after they log into E-Services.

    This is with regards to the Cabinet Decision No 49 of 2021 on the Administrative Penalties for Violation of Tax Laws in the UAE.

    The link will open a window that includes the details of :

    • Tax Payable
    • Late Registration Penalty
    • Other Penalties Payable
    • Net Payable Amount
    • Total Credit

    Tax payers have to review their My Payments page and ensure the tax is paid before 28 June 2021 in order not to incur new administrative penalties.

    FTA would also be launching a full dashboard with Tax Payable and Administrative Penalties Payable as well as outstanding balances in relation to Cabinet Decision 49 of 2021 on 28 June 2021.

    Click here to view the New Decision Emailer.

    Read Also : The Federal Tax Authority encourages registrants to take advantage of penalty redetermination introduced by Cabinet Decision No. 49 of 2021, effective on 28th June, 2021

    FTA organizes a blood donation campaign to strengthen the values of social responsibility in employees

    date: 20210622

    Organized By: Federal Tax Authority

    External URL: https://www.tax.gov.ae/press-releases/In-collaboration-with-the-Abu-Dhabi-Blood-Bank-and--Dubai-Health-Authority

    UAE- June 22, 2021:

    The Federal Tax Authority (FTA) conducted a blood donation campaign on June 14, 2021 in collaboration with the Abu Dhabi Blood Bank and the Dubai Health Authority under the 2021 World Blood Donor Day slogan, “Give Blood and Keep the World Beating”. The Authority plans to strengthen its activities in areas of social responsibility and support voluntary activities, emphasizing the importance of blood donation as a humanitarian initiative. A large number of donors took part and donated their blood.

    His Excellency Khalid Ali Al-Bustani, Director General of the FTA, said “The blood donation campaign had seen wide participation from the staff members to support the community. The noble act saves millions of lives worldwide and ensures patients and accident victims have adequate blood supplies when in need of transfusions”.

    His Excellency concluded that “Humanitarian acts are the most fundamental principles of community-building and the FTA is keen to organize more corporate social responsibility events.”

    Click here to read more.

    UAE Federal Tax Authority launches smart app to help consumers detect non-compliant tobacco products

    date: 20210617

    External URL: http://www.allaboutvat.com/uae-federal-tax-authority-launches-smart-app-to-help-consumers-detect-non-compliant-tobacco-products/

    UAE- June 17, 2021:

    As part of its ongoing efforts to protect consumers from commercial fraud and combat tax evasion with various mechanisms, the Federal Tax Authority (FTA) of the UAE has launched an innovative smart application for consumer’s use. This latest technology allows consumers to scan the digital tobacco products and detect illegal products so that they can be reported to the FTA through the application.

    The application has been launched under the banner, “Monitor yourself, fight fraud”. The users can install the app, known as ‘FTA DTS’, on their smartphones via the Apple Store and Google Play.

    The FTA explained that the application enables consumers to scan the stamps placed on the tobacco packages or tobacco products to verify and ensure that it is an Authority accredited digital tax stamp. Should the consumer discover that the stamps are not accredited, they can file a report to the FTA directly from the smart application. The Authority will then cooperate with the relevant authorities to take legal actions against violators.

    Read more to know the objectives and method to use the Smart App.

    Read more about the Digital Tax Stamp Scheme

    Get your queries addressed by our tax experts.

    FTA's first tax agent virtual session introduced the latest developments regarding the tax legislative environment

    date: 20210616

    Organized By: Emirates News Agency

    External URL: http://wam.ae/en/details/1395302943574

    UAE- June 16, 2021:

    The Federal Tax Authority (FTA) has confirmed during its first tax agent virtual session of 2021 that Cabinet Decision No. 49 of 2021 (New Resolution), amending provisions of Cabinet Decision No. 40/2017 (Old Decision) imposed for the violation of Tax Laws in the UAE provides relief as a measure to support businesses and allows the re-determination of unpaid due administrative penalties which were imposed on taxable persons before 28th June, 2021.

    The FTA organised the virtual session to introduce the latest developments regarding the tax legislative environment. The session was attended by 268 authorised tax agents, FTA representatives and officials. A detailed presentation on the implementation of the new decision was showcased, in addition to the conditions required to benefit from the new decision.

    Cabinet Decision No. 49 of 2021 states three conditions that need to be fulfilled for tax registrants to benefit from the re-determination of unpaid administrative penalties to be 30 percent of the value due on 28th June 2021.

    • The first condition is that the administrative penalty must be imposed under Cabinet Decision No. 40 of 2017 on the Administrative Penalties for Violating Tax Laws in the UAE before 28th June, 2021, which is the effective date of the new decision, and remain outstanding on such date.
    • The second is the tax registrant must settle all payable tax by 31st December, 2021.
    • The third is that Tax registrants must pay 30 percent of administrative penalties payable and unsettled by 28th June, 2021, on or before 31st December 2021.

    Should the registrant meet all these conditions, the FTA will re-determine (after 31st December 2021) the unsettled payable administrative penalties due on 28th June, 2021, to be equal to 30 percent of such unsettled penalties. This will exonerate the tax registrant from paying the remaining 70 percent and the relief will be applied automatically when the three conditions are fulfilled.

    FTA representatives also gave an overview of the 16 violations and administrative penalties which have been amended either in value or in the calculation method. During the session, various queries raised by tax agents about the amendments of administrative penalties were clarified.

    Read : FTA releases Cabinet Decision No. 49/2021 – Amendments of Penalties for Violation of Tax Laws in the UAE

    Read Also : FTA releases two new Public Clarifications on amendments to administrative penalties and redetermination of some penalties already imposed

    Click here to read more.

    FTA releases Cabinet Decision No. 49/2021 - Amendments of Penalties for Violation of Tax Laws in the UAE

    date: 20210610

    Organized By: Federal Tax Authority

    External URL: https://www.tax.gov.ae/-/media/Files/FTA/links/Legislation/Federal-Tax-Procedures/Cabinet-Decision-No-49-of-2021--For-Publishing.pdf

    UAE- June 10, 2021:

    The Federal Tax Authority (FTA) has revised the tax penalties by issuing Decision No. 49/2021 (New Resolution), amending provisions of Cabinet Decision No. 40/2017 (Old Decision) imposed for the violation of Tax Laws in the UAE. Prior to the issuance of the New Decision, taxpayers were faced with heavy penalties for non-compliance under the regulations. Although the penalties imposed under the previous Cabinet Resolution were to reduce non-compliance and to be more compliant with the law, these always posed a heavy burden on taxpayers.

    As per Cabinet Decision No. 49/2021 amendments of penalties for violation of tax laws aims to support registrants in fulfilling their tax obligations.

    Kindly note the following:

    • The Decision will go into effect starting from 28 June 2021.
    • The Decision reduces many administrative penalties imposed on the violation of tax laws post 28 June 2021.
    • The Decision allows registrants who have been penalized prior to the effective date of the Decision to benefit from a penalty redetermination scheme, where they would only be required to settle 30% of their payable administrative penalties outstanding on 28 June 2021 subject to meeting the requirements specified in the Decision.

    In order to benefit from the penalty redetermination scheme, the FTA urges registrants to settle all pending tax until 31 December 2021 and 30% of the total administrative penalties imposed and outstanding on 28 June 2021, no later than 31 December 2021.

    For more details, please click the links below.

    FTA releases two new Public Clarifications on amendments to administrative penalties and redetermination of some penalties already imposed

    date: 20210530

    Organized By: Federal Tax Authority

    External URL: https://www.tax.gov.ae/-/media/Files/FTA/links/Public-Clarification/TAXP001---Amendment-of-Penalties---27-05-2021.pdf

    UAE- May 30, 2021:

    As part of its ongoing awareness-raising efforts, the Federal Tax Authority (FTA) has issued two new detailed public clarifications that aim to familiarize persons with simplified explanation on tax aspects, enabling them to apply the tax principles accurately.

    The first public clarification outlines the fundamental amendments to the table of administrative penalties, in order to ensure certainty of the correct application of these amended penalties.

    Click here to view the Tax Procedures Public Clarification- Amendments to the Penalties Regime

    The second public clarification details the mechanism used to re-determine some administrative penalties that were imposed before the effective date of the new amendment on June 28, 2021. This decision is applicable on all administrative penalties imposed whether in respect of tax procedures, VAT or Excise Tax.

    Click here to view the Tax Procedures Public Clarification – Redetermination of Administrative Penalties Levied Prior to the Effective Date of Cabinet Decision No. 49 of 2021

    For any queries you may contact our Tax Experts.

    UAE reduces penalties for various tax law violations

    date: 20210529

    Organized By: Khaleej Times

    External URL: https://www.khaleejtimes.com/business/local/uae-reduces-penalties-for-violating-tax-laws

    UAE- May 29, 2021:

    The Federal Tax Authority (FTA) announced a relief to businesses by reducing penalties to facilitate them in filing an accurate tax return.

    Sixteen types of administrative penalties for violation of tax laws in UAE have either been reduced or had the method of calculation amended under the latest initiative in line with Cabinet Decision No. 49 of 2021. The decision is designed to support tax registrants and help them fulfill their tax obligations.

    Khalid Ali Al Bustani, director-general of FTA, said the new amendment will become effective on June 28, 2021, and will reduce many administrative penalties imposed for violating tax laws. He said late payment penalty will not be imposed on voluntary disclosures if payment is settled within 20 business days of submitting the voluntary disclosure.

    “This comes as part of the wise leadership’s directives to implement the tax system according to the best standards that ensure further growth for the national economy and help achieve transparency and economic momentum. This provides a resilient tax legislative environment that encourages self-compliance and keeps pace with change through constant issuance of decisions in accordance with phased requirements,” Al Bustani said.

    The FTA director-general called on tax registrants to take advantage of the important benefits provided by the new amendment as it provides more relief to business sectors in order to support their effective contribution to boosting the national economy’s growth.

    Click here to read more.

    For any queries you may contact our Tax Experts.

    FTA recognizes persons or group's right to apply for a reduction or exemption for tax law violation penalties

    date: 20210528

    Organized By: Federal Tax Authority

    External URL: https://www.tax.gov.ae/press-releases/Any-person-or-group-has-the-right-to-apply-for-a-reduction

    UAE- May 28, 2021:

    The Federal Tax Authority (FTA) has announced that any person or group has the right to apply to the FTA to reduce or exempt them from the penalty imposed for the violation of the provisions of tax legislation, provided that there is an excuse acceptable to the FTA. It must supported by evidence that justifies the existence of the excuse and the violation that led to the imposition of administrative penalties.

    The FTA clarified that according to Cabinet Decision No. 51 of 2021 on amending the Executive Regulation of Federal Law on Tax Procedures, any person or group who is found to have violated the provisions of the tax law may submit such a request to the FTA to reduce or exempt from the penalties in accordance with a set of conditions. The FTA must be notified of the request within 40 business days from the end of the acceptable excuse. Also, the person must prove that the violation has been corrected, and the application for exemption or reduction is submitted in accordance with the form specified by the FTA.

    The FTA confirmed that, according to the amendments that came into effect on 28 April 2021, an excuse shall not be considered acceptable if the act that led to the violation was deliberate. An excuse can only be deemed acceptable based on a decision made by a tripartite committee formed by the Director-General of the FTA. This committee will study the excuse and accept or reject it, and will issue its decision to reduce or exempt administrative penalties within 40 business days from the date of receiving the application. Applicants shall be notified of this decision within 10 business days from the date of its issuance.

    Click here to read more.

    Cabinet Approves Double Taxation Agreement Between UAE and Jamaica

    date: 20210525

    Organized By: Jamiaca Information Service

    External URL: https://jis.gov.jm/cabinet-approves-double-taxation-agreement-between-uae-and-jamaica/

    UAE- May 25, 2021:

    Cabinet has given approval for the Double Taxation Agreement between the United Arab Emirates (UAE) and Jamaica. This would eliminate double taxation with respect to taxes on income and the prevention of tax evasion and avoidance.

    Jamaica Minister of Education, Youth and Information, Hon. Fayval Williams disclosed the update on May 19 during the post-cabinet press briefing at Jamaica House in St. Andrew.

    She said the general objectives of the bilateral tax agreement are to provide full protection of taxpayers against double taxation and to allow for the free flow of international trade or cross-border transactions and the transfer of technology. It will prevent discrimination between taxpayers in the international field and provide a reasonable element of legal and fiscal certainty as a framework within which international operations could be pursued. She noted that the agreement fosters cooperation between the tax authorities in the UAE and Jamaica, enabling them to execute their duties more effectively.

    Click here to read more.

    FTA releases VAT Payment User Guide for Commercial Property Buyers

    date: 20210524

    Organized By: Federal Tax Authority

    External URL: https://www.tax.gov.ae/-/media/Files/EN/PDF/Guides/VAT-Payment-for-Commercial-Property-Buyers-User-GuideEnglishv20-06-05-2021.pdf

    Dubai- May 24, 2021:

    FTA releases a VAT Payment User Guide for Commercial Property Buyers.

    The guide is prepared to help persons who are buying or selling a commercial property which is subject to VAT in the UAE to complete their VAT payment on the FTA’s eServices portal. This process will be completed as a miscellaneous payment.

    Kindly note that this guide is only applicable to sales of commercial property which are subject to VAT at 5%.

    Therefore, it does not apply to:

    • Any sales or leases of residential property;
    • Leases of commercial property; and
    • The sale of a commercial property with the benefit of sitting tenants to a buyer who is a Taxable Person which qualifies as the transfer of a business.

    Click here to view the guide.

    For any queries you may contact our Tax Experts.

    UAE expats can send relief material to India without tax

    date: 20210516

    Organized By: Khaleej Times

    External URL: https://www.khaleejtimes.com/coronavirus-pandemic/india-covid-19-crisis-uae-expats-can-send-relief-material-to-india-without-tax

    Dubai- May 16, 2021:

    The UAE expatriates can send Covid-related relief material to India without paying customs duty. The Ministry of Finance issued a notification on May3 exempting customs duty, integrated goods and services tax (IGST) and/or health cess on the import of a number of relief materials till June 30, 2021.

    The government at the centre said it received a number of representations from charitable organizations, corporate entities, and other associations outside India seeking exemption from IGST on the import of Covid-19 relief material donated or received free of cost from outside India for free distribution. The relief items are already exempted from customs duty till June 2021.

    Earlier, the government had also exempted the basic customs duty and health cess on certain Covid-19 related supplies, namely Remdesivir injections or active pharmaceutical ingredients (API), Beta Cyclodextrin and inflammatory diagnostic kits till October 31 and medical grade oxygen, cryogenic transport tanks, other oxygen therapy-related equipment and vaccines till July 31. The new ruling is beneficial for local community groups, businesses and individual expatriates who are keen to supply relief materials to India.

    Click here to read more.

    FTA released a decision on 'The Mechanism for Calculating the Average Retail Selling Price of Excise Goods in the Market'

    date: 20210510

    Organized By: Federal Tax Authority

    External URL: https://www.tax.gov.ae/-/media/Files/FTA/links/Legislation/Excise-tax/FTA-Decision-No-1-of-2021-on-the-mechanism-of-calculating-the-ARSP-of-Excise-Goods.pdf

    Dubai- May 10, 2021:

    In order to calculate the average retail selling price of the excise goods in the market, the FTA has released a decision approved by the Board of Directors’ at its 15th meeting held on 20 April 2021.

    For the purposes of Clause 2 of Article 14 of Cabinet Decision No. 52 of 2019, a Taxable Person shall undertake the procedures outlined in the document for the purpose of identifying the Designated Retail Selling Price as per the sequence mentioned.

    Click here to view the Federal Tax Authority Decision No. 1 of 2021 (Unofficial translation) – Issued on 28th April 2021.

    UAE reduces penalties on VAT, excise tax to cope with Covid-19 impact

    date: 20210509

    Organized By: Khaleej Times

    External URL: https://www.khaleejtimes.com/news/government/covid-impact-uae-reduces-penalties-on-vat-excise-tax

    Dubai- May 9, 2021:

    The UAE has reduced penalties on value-added tax (VAT) and excise tax in order to help companies and individuals better cope with the impact of the Covid-19 pandemic. According to newly-released Cabinet Decision No. 49 of 2021, tax payers who currently have penalties pending can see those reduced to 30 per cent, provided they settle them before December 31, 2021.

    Going forward, late payment penalties will be reduced to four per cent per month, a substantial reduction from one per cent per day while an overall cap stays at 300 per cent.

    The new provisions will be applicable 60 days as from April 28, 2021.

    For more information click here.

    For any additional queries contact our tax experts.

    READ ALSO: THE TOP 8 LIST OF VAT FINES AND PENALTIES LEVIED BY FTA.

    FTA releases New Public Clarification on VAT registration of Sole Establishments

    date: 20210508

    Organized By: Federal Tax Authority

    External URL: https://www.tax.gov.ae/-/media/Files/FTA/links/Public-Clarification/VATP026---Sole-Establishments---Legal-and-Natural---05-05-2021.pdf

    Dubai- May 8, 2021:

    The FTA (Federal Tax Authority ) issued guidance on the value added tax (VAT) registration for sole establishments and sole proprietorships.

    A natural or legal person may own a number of sole establishments. There has been uncertainty on whether each sole establishment needs to obtain a separate VAT registration or whether all such establishments should be included under one VAT registration. The Public Clarification released clarifies the VAT registration obligations of a person in respect of its sole establishments.

    A person owning a number of sole establishments should obtain only one VAT registration for all its sole establishments, and it is not permissible to register each sole establishment separately for VAT.

    This does not apply to a one-person company LLC or other similar legal entities that are seen as distinct and separate legal persons from their owners.

    The FTA will review in certain cases the VAT registrations by taxable persons in respect of sole establishments and will inform them of the corrective steps to be taken, if any.

    UAE ranked among the top 10 in 28 competitive indicators for the financial and tax sector

    date: 20210503

    Organized By: Emirates News Agency

    External URL: https://wam.ae/en/details/1395302931770

    Abu Dhabi- May 3, 2021:

    Five of the major international institutions specialized in assessing competitiveness have ranked the UAE among the top 10 in the world in 28 indicators of competitiveness in the financial and tax sector.

    This was highlighted by a report by the Federal Competitiveness and Statistics Centre (FCSC), which documented the rankings of the IMD World Competitiveness Yearbook, the Legatum Prosperity Index, the World Economic Forum’s Travel and Tourism Competitiveness Report, the Global Talent Competitiveness Index (GTCI) and the Global Competitiveness Index 4.0. The report states that the UAE was ranked first in the Real Personal Taxes Index, the Collected Personal Income Taxes Index, the Low Tax Evasion Rate Index, the Collected Indirect Tax Revenues Index, the Lack of Wastefulness in Government Spending Index and the Best Time to File Tax Returns Index.

    The UAE was also ranked second globally in the areas of corporate tax collection, real increase in government expenditures, and collection of capital and real estate taxes, while it was ranked third in the areas of intergovernmental transfers, local central governmental debt and rate of low consumption taxes.

    In early January 2018, the UAE implemented VAT at 5% on most goods and services that are supplied at every stage of the supply chain. Prior to that in 2017, an excise tax was applied to restrict the consumption of substances that affect health such as tobacco products and energy drinks.

    At a time when many countries of the world tend to increase taxes on personal and corporate profits, the UAE ranked first in the world in the absence of income taxes and low rates of tax evasion which strengthens its eligibility to attract foreign investment.

    Click here to view more.

    FTA releases Real Estate Guide

    date: 20210502

    Organized By: Federal Tax Authority

    External URL: https://www.tax.gov.ae/-/media/Files/EN/PDF/Guides/Real-Estate-Guide-VATGRE1---EN---19-04-2021.pdf

    Dubai- May 2, 2021:

    Federal Tax Authority (FTA) releases ‘Real Estate Guide‘ that throws guidance on the VAT treatment of supplies of real estate, as well as various common transactions which occur within the real estate sector. The purpose of the document is to provide guidance on how VAT affects businesses which operate within the real estate sector, as well as for owners or landlords of real estate.

    This document is meant for owners of commercial and residential real estate, landlords making supplies of commercial or residential real estate, and businesses operating within the construction industry, or making supplies which relate to real estate. Property managers and owners’ associations may also find this guide useful.

    UAE participates in 113th meeting of GCC Financial and Economic Cooperation Committee

    date: 20210428

    Organized By: Emirates News Agency

    External URL: http://wam.ae/en/details/1395302928924

    Abu Dhabi- April 28, 2021:

    Obaid Humaid Al Tayer, Minister of State for Financial Affairs, participated in the 113th meeting of the GCC Financial and Economic Cooperation Committee, held virtually on April 22, 2021 and discussed strengthening financial and economic cooperation among GCC countries.

    The Committee discussed the recommendations submitted by the GCC Committee of Monetary Authorities and Central Banks Governors during the 76th meeting; the 25th meeting of GCC Customs Union Authority; and the Gulf Market Committee at its 30th and 31st meetings.

    Also discussed were the minutes of the 8th meeting of Committee of Heads and Directors of Tax Administrations in the GCC States; the budget for supporting joint activities and programmes to develop youth work in the GCC countries; and the G20 Finance Track’s initiatives that can be issued to the GCC countries. That, in addition to the decisions of the 41st Session of GCC Supreme Council and the decisions of the 21st meeting of the GCC Ministerial Committee of following up the implementation of the GCC Joint Work Decisions.

    The committee reviewed the GCC Supreme Council’s decision on agreeing on a system of linking payments in the GCC countries; discussing the programme on achieving economic unity among the GCC countries by 2025; and discussing the issues proposed to the International Monetary Fund (IMF), which they will study and submit at the joint meeting of the GCC Financial and Economic Cooperation Committee, the GCC Committee of Governors of Monetary Institutions and Central Banks and the Director-General of the IMF.

    It also reviewed the latest developments related to the GCC-Takamul system, which is an electronic gateway for complaints and enquiries related to the Gulf Common Market. The committee praised its experimental launch among the GCC countries, and asked member countries to provide the data of those in charge of the system in the ministries of finance to the General Secretariat. The official launch of the system will take place during the next meeting of the GCC Financial and Economic Cooperation Committee in October 2021.

    Click here to read more.

    FTA collects tax liabilities worth AED74 million in Q1-21

    date: 20210427

    Organized By: Emirates News Agency

    External URL: http://wam.ae/en/details/1395302930003

    Abu Dhabi- April 27, 2021:

    The Federal Tax Authority (FTA) has conducted more than 2,707 field inspection visits through 35 inspection campaigns across UAE markets in the first quarter of 2021 (Q1-21). This is as part of its ongoing efforts to protect consumer rights and increase the level of tax compliance.

    FTA revealed that 256 VAT violations were detected and 248 violations with a total value of AED74 million during Q1.

    FTA Director-General, Khalid Ali Al Bustani, confirmed that the sophisticated, cutting-edge tools adopted by the authority during inspections enable teams to accurately carry out their tasks through the latest field electronic mechanisms which correspond to best practices. This contributes to tightening controls on UAE markets to prevent the sale, circulation, and stockpiling of products that have not fulfilled their Excise or VAT obligations.

    One of these tools is the mandatory marking of tobacco and tobacco related products which came into effect on 1st January, 2019. It specified the requirement to place Digital Tax Stamp (DTS) on cigarette packs and tobacco products, including water-pipe tobacco and electrically heated cigarettes, after registering them in the FTA database. Each DTS contains data that can be read with a special device to ensure all taxes due on the products have been paid.

    Al Bustani added, “The tax compliance rates that have been observed in the outcomes of the inspection campaigns carried out in the first quarter of 2021 highlight the success of the authority’s oversight efforts carried out in cooperation with the competent entities.”

    Click here to read more.

    FTA holds 3 interactive sessions in Q1-21 as part of “Tax Clinic” initiative for SMEs

    date: 20210422

    Organized By: Federal Tax Authority

    External URL: https://www.tax.gov.ae/press-releases/FTA-holds--interactive-sessions-Tax-Clinic

    Abu Dhabi – April 22, 2021:

    The Federal Tax Authority (FTA) has held 3 interactive sessions via video conference, as part of the “Tax Clinic” initiative, a policy of direct communication with business sectors to promote tax awareness and avoid the most common errors while implementing tax procedures.

    The awareness sessions held in Q1 of 2021focused on the small and medium enterprise (SME) sector. Teams of tax analysts and experts from the FTA’s Registration and Taxpayer Services Departments answered the inquiries of business representatives from across the emirates. The inquires were about tax registration and obligations. They also raised awareness of how to submit returns and pay tax dues without errors.

    His Excellency Khalid Ali Al Bustani, Director-General of FTA, emphasized that the FTA is committed to ensure the security and safety of its employees and clients. It maintains constant interaction with those involved in the tax system by organizing webinars and meetings with its partners in the government/private sectors via video conference to adhere to social distancing norms imposed by Covid-19.

    Click here to read more.

    New edition of the ‘Basic Tax Information Bulletin’ on the Automotive sector

    date: 20210421

    Organized By: Federal Tax Authority

    External URL: https://www.tax.gov.ae/press-releases/New-edition-of-the-Basic-Tax-Information-Bulletin

    Abu Dhabi – April 21, 2021:

    The Federal Tax Authority (FTA) has announced in its latest edition of the Basic Tax Information Bulletin that motor vehicle repairs and maintenance services provided within the UAE are subject to VAT at the standard rate of 5%. This applies even if the costs are charged to an entity based outside the UAE. The new edition mainly targets businesses in the automotive sector, including new car dealers, used car dealers, and servicing and parts’ suppliers.

    With regard to repair services and parts provided under a warranty, the FTA clarified that VAT is applicable on the sale of vehicles under warranty and warranty packages purchased separately by the customer. Any subsequent supply of repair services and parts to the owner of the vehicle under warranty is not subject to VAT, provided no additional amount is charged in respect of the repair service or parts.

    As per the Bulletin, businesses in the automotive sector making taxable supplies are eligible for the full recovery of input VAT, with the exception of blocked items such as certain entertainment services and purchased, leased, or rented motor vehicles that are available for personal use.

    Click here to read more.

    FTA receives 2 new international accreditations in Information Technology and Information Security Management System

    date: 20210420

    Organized By: Federal Tax Authority

    External URL: https://www.tax.gov.ae/press-releases/ISO-certifications-in-Information-Technology

    Abu Dhabi – April 20, 2021:

    The Federal Tax Authority (FTA) has received two certifications “ISO 20000” and “ISO 27001” in the information technology services sector: ISO certification for IT Service Management and ISO certification for IT Security Management.

    His Excellency Khalid Ali Al Bustani, FTA Director-General, emphasized that the two new certifications enhance confidence in the FTA’s IT services and electronic systems. They are being continuously improved to ensure data protection and improve its services in all sectors. This is being accomplished through the application of a comprehensive quality methodology to complete operations and document them via an integrated system approach.

    The Director-General affirmed that FTA since its establishment has been keen to provide a sophisticated digital tax system according to the best international standards. This is to carry out all operations smoothly and facilitate the processes of registration, filing tax returns, tax payments and tax refunds, thereby allowing quick completion.

    Click here to read more.

    UAE MoE extends anti-money laundering (AML) compliance date until 30th April for selected businesses

    date: 20210411

    Organized By: Khaleej Times

    External URL: https://www.khaleejtimes.com/business/banking-finance/uae-anti-money-laundering-registration-for-non-financial-entities-individuals-extended-until-april-30

    Dubai- April 11, 2021:

    The UAE Ministry of Economy announced the extension of the deadline granted to companies in the “specific non-financial business and professions” sector to register in government regulations approved for countering money laundering and combating the financing of terrorism until the end of April 2021.

    The decision is due to the large numbers of companies in the sector seeking to register in the last days of the previous deadline, which expired on March 31, taking into account the conditions of companies and the business sector in general during the period of the Covid-19 pandemic.

    Click here to read more.

    FTA released a basic tax information bulletin on Automotive Sector

    date: 20210409

    Organized By: Federal Tax Authority

    External URL: https://www.tax.gov.ae/-/media/Files/FTA/links/Public-Clarification/Bulletin-AUTOMOTIVE-SECTOR-30Mar.pdf

    Dubai- April 9, 2021:

    FTA released a basic tax information bulletin on Automotive Sector meant for new car dealers, used car dealers, servicing and part’s suppliers.

    The bulletin clarifies that supplies made by businesses in the automotive sector are generally subject to VAT, including but not limited to:

    • Sales of new and used cars
    • Sales of car parts
    • Service centers’ services, warranties, and related insurance products

    Supplies of qualified means of transport, such as buses that are designed or adapted for public transportation of 10 or more passengers and are actually used for public transportation are, however, zero-rated for VAT purposes.

    For further clarification contact our tax experts.

    FTA released public clarification VATP025 on 'Temporary Zero-rating of Certain Medical Equipment'

    date: 20210408

    Organized By: Federal Tax Authority

    External URL: https://www.tax.gov.ae/-/media/Files/FTA/links/Public-Clarification/VATP025---Zero-rating-certain-medical-equipment---06-04-2021.pdf

    Dubai- April 8, 2021:

    The Federal Tax Authority has published public clarification VATP025 on “Temporary Zero-rating of Certain Medical Equipment”.

    The key highlights are:

    • The date is extended till 31st December-2021 for VAT at the rate of 0% on certain supplies and import of medical equipment.
    • After 31st December-2021 if there is any supply then normal procedures shall apply.

    View the list of guides here.

    For further clarification contact our tax experts.

    FTA released public clarification VATP024 on bad debt relief adjustment

    date: 20210406

    Organized By: Federal Tax Authority

    External URL: https://www.tax.gov.ae/-/media/Files/FTA/links/Public-Clarification/VATP024---Adjustment-on-account-of-Bad-Debts---17-03-2021.pdf

    Dubai- April 6, 2021:
    FTA has published a public clarification VAT P024 on bad debt relief adjustment. The key points of VATP024 are as follows:

    • In the event a supplier does not receive payment from the customer, the supplier may adjust the output vat on the bad debt subject to certain conditions as follows.

    – VAT charged and accounted for on the supply (to FTA via tax returns).
    – Consideration should have been written off in full or part.
    – A duration of six months should have passed from the date of supply.
    – Supplier has notified the customer that the amount has been written off.

    • Bad debt relief can only be taken to the extent of consideration written off in the accounts.
    • During the six months period, FTA considers that supplier should engage with customer to recover the debt.
    • The supplier is required to notify the customer and communicate via a letter, email or post to the customer stating the amount of consideration that has been written off. The notification to the customer for the write-off must include:

    – Invoice number and date of invoice which has not been paid.
    – Amount of consideration which has been written off.
    Note:

    • It may not be necessary to obtain an acknowledgment from the customer. However, it is prudent to retain the evidence of having sent the notification.
    • The adjustment on account of bad debt relief should be made in the “Adjustment column” of Box 1 of the VAT Return. The adjustment amount should be the VAT amount only

    These key highlights are for your information only and should require further advice, kindly get in touch with our tax experts.

    Federal Tax Authority showcases 3 key initiatives in 'UAE Innovation Week'

    date: 20210309

    Organized By: Federal Tax Authority

    External URL: https://www.tax.gov.ae/press-releases/FTA-UAE-Innovation-Week

    Dubai- March 9, 2021:

    The Federal Tax Authority (FTA) is taking part in the UAE’s Innovation Week, under the slogan ‘UAE Innovates 2021’, with the aim of enhancing an innovation culture and encouraging community participation in designing and developing future experiences and initiatives.

    Khalid Al Bustani, Director-General of the FTA, said that the authority’s participation in UAE Innovation Week is in line with its strategy to encourage innovation, development, and to contribute to the UAE’s efforts to strengthen the national strategy for innovation and digital transformation, to continuously develop government services.

    The FTA’s three initiatives included

    • The ‘Tax Innovation Lab’ initiative, which involves holding remote brainstorming meetings on various critical topics that promote innovative ideas;
    • The ‘Monitoring Tax Innovations’, which highlighted the most remarkable innovative achievements in the tax field;
    • And a series of online comprehensive talks, comprised of virtual dialogue sessions on innovation management, research and development and future trends in the field.

    Al Bustani emphasised that this contribution reflects the FTA’s understanding of customer needs and its efforts to meet their expectations and keep them happy.

    VAT applicable for services provided by artists, influencers

    date: 20210308

    Organized By: Khaleej Times

    External URL: https://www.khaleejtimes.com/business/vat-in-uae/uae-tax-services-provided-by-artists-social-media-influencers-subject-to-vat

    Dubai- March 8, 2021:

    The Federal Tax Authority (FTA) has clarified in a bulletin that services provided by artists and social media influencers (SMIs) for consideration are subject to Value Added Tax.

    VAT applies to such services and include, but are not limited to, online promotional activities performed on behalf of other businesses for a consideration, such as promoting a product in a blog or a video or promoting a business on a social media post, any physical appearances; marketing and advertising related activities; providing access to any social media influencers’ networks on social media, and any other services that the SMIs may provide for a consideration.

    This announcement was shared in the latest Basic Tax Information Bulletin issued by the FTA on the tax treatment of services provided by artists and social media influencers.

    The bulletin clarified that if an artist or influencer incurs any costs in providing a service and subsequently recovers that cost from its client, such reimbursement falls within the scope of VAT in the UAE.

    Click here to view more.

    UAE MoE extends deadline until March 31 for DNFBPs to comply with Anti-money Laundering (AML)

    date: 20210303

    Dubai- March 3, 2021:

    The UAE has the most attractive trade regimes in the Middle East region, making it a global hub. As a committed member of the International Financial Action Task Force (FATF), the UAE has displayed readiness for anti-money laundering (AML) and counter financing of terrorism (CFT). The UAE taken proactive steps in an effort to monitor the illegal funds and align with international best practices.

    Federal Law No 20 of 2018 on Anti Money Laundering (AML) was introduced in the UAE for combating the financing of terrorism and of illegal organizations.

    The regulatory authorities under the AML set up are:

    • Ministry of Economy
    • The Central Bank of the UAE
    • Securities and Commodities Authority
    • Ministry of Justice
    • Insurance Authority
    • Dubai Financial Services Authority
    • Financial Services Regulator Authority in Abu Dhabi Global Market

    The law has enforced great responsibilities on Designated Non- Financial Businesses and Professions (DNFBP) to help tackle money laundering. The UAE’s Ministry of Economy (MoE) is entrusted with the responsibility to supervise the DNFBP and commercial free zones with regards to AML/CFT.

    Anyone engaged in the following trade or business activities would be considered a DNFBP:

    • Brokers and real estate agents
    • Dealers in precious metals and precious stones
    • Lawyers, notaries, and other independent legal professionals and independent accountants
    • Providers of corporate services and trusts

    Click here to know the process of goAML registration.

    **NOTE :

    • The deadline to register in the free goAML system to file STRs (Suspicious transaction reporting) and ARS (Automatic reporting system) for sanctions lists was February 25, 2021 and is applicable for DNFBPs registered in mainland and free zones as well.
    • MoE has extended the deadline and grace period for registration until March 31, 2021 for mainland DNFBPs.
    • DNFBPs that fail to abide with rules shall be subject to various administrative and financial penalties, that range from warnings to fines between Dh 50,000 to Dh 5 million.

    **CLARIFY YOUR QUERIES by WITH OUR TAX EXPERTS.

    FTA to deactivate VAT 301 form for VAT payment

    date: 20210216

    Organized By: Federal Tax Authority

    Dubai- February 16, 2021:

    Since the implementation of VAT in UAE, the VAT301 form has been available on e-services portal to manually process the VAT payment on Customs Declarations using the Tax Registration Number (TRN).

    Recently, FTA has communicated that form VAT301 will be discontinued on 23 February, 2021 for users who have a valid TRN and were using this form earlier for settlements via their VAT returns. Anyone registered for VAT purposes and having a valid TRN, in order to continue being able to import goods via Customs, ensure that your
    Customs Registration Numbers (CRN’s) are linked to your Tax Registration Number (TRN).

    If you do not have a CRN, ensure you register with the Customs Department and link your CRN with TRN. Alternatively, you will only be able to import goods via a clearing company registered with the FTA or use form VAT301 to utilize the payment option.

    If you are from those whom the condition and rules applies on as it is shown below :-

    1– Designated entities exempted by FTA.
    2- Free zone Companies that exports through land to GCC Countries from designated zones[AHA1] for the VAT purpose.
    3- FTA accredited Shipping and Clearance Agencies to clear shipments of on behalf of registered/non-registered importers with FTA.

    NOTE: You can request to open form VAT301 for VAT settlements based on customs declarations through FTA’s online services. To submit application download VAT-301-SETTLEMENT-ACCESS-FORM

    This will need to be filled and sent to VAT301application@tax.gov.ae along with applicable documents such as sample GCC transit customs declarations for review and approval.

    Send your inquiry and we will arrange a consultation on this subject.

    FTA Inspections in UAE: to enhance Excise Tax compliance and reduce violations

    date: 20210215

    Organized By: Federal Tax Authority

    External URL: https://www.tax.gov.ae/press-releases/Campaigns-in-Local-Markets-to-Ensure-Compliance

    Dubai- February 15, 2021:

    The number of inspection campaigns organized by the Federal Tax Authority (FTA) witnessed notable growth during 2020 across UAE markets. Some were conducted in collaboration with Departments of Economic Development and other relevant entities to protect consumer rights and increase the level of tax compliance.

    The Authority said that these campaigns were carried out as part of their extensive efforts to contribute towards strengthening market performance, protect legitimate trade and prevent the sale of contraband within the UAE and tax evasion.

    The application of Excise Tax laws achieved remarkable success since their implementation, reflecting positive results primarily in building a safe and healthy society by reducing the consumption of harmful goods.

    The FTA noted that the total value of the liabilities caught during the inspection visits amounted to AED 191,830,000 in the category of goods subject to Excise Tax, 9.4 million units of cigarette packs and 14,000 kilograms of shisha tobacco products were uncovered as goods not bearing digital tax stamps and no tax has been declared or paid on them. Other goods caught in violation of Excise Tax laws included a total of more than 803,000 items ranging from carbonated beverages, energy drinks, sweetened drinks and electronic smoking devices.

    FTA Director-General, Khalid Ali Al Bustani, confirmed that the Authority prioritizes consumers’ protection from harmful products that do not meet the UAE’s regulations and standards while actively combating tax evasion.

    The Authority will continue to conduct its inspection campaigns to enhance tax compliance and reduce transactions that violate legislation and tax procedures.

    Owners of multiple 'sole businesses' need just one VAT registration: FTA

    date: 20210210

    Organized By: Federal Tax Authority

    External URL: https://www.tax.gov.ae/press-releases/FTA-issues-a-public-clarification-regarding-VAT-registration

    Dubai- February 10, 2021:

    According to the FTA, anyone owning multiple ‘sole businesses’ in the UAE need only one tax registration for all of them, and not for each one separately. It means that all tax claims must be filed collectively by the individual and for the establishments he owns. A sole establishment is 100 per cent owned by an individual, and does not have legal standing independent of its owner.

    The FTA clarified that the sole proprietorship rule does not apply to a One-Person Company LLC or similar legal entities, which are seen as “distinct and separate legal persons” from their owners (unless the applicable legislation treats such entity and the natural person as the same person). For the avoidance of doubt, it should be noted that a legal person a company) cannot own a sole establishment. In certain cases, tax registrations by taxpayers are reviewed with regards to sole establishments and such persons will be informed of the corrective measures to be taken.

    The tax claims filed by the business owner in addition to his sole establishments must be considered collectively to determine whether the person exceeded the mandatory VAT registration threshold of Dh375,000.

    The FTA said the registrant must inform the FTA of any undeclared output tax by submitting a voluntary disclosure in accordance with Federal Law No. 7 of 2017 on Tax Procedures. A natural person is also required to notify the FTA if it failed to register for VAT and take the necessary corrective action to account for any outstanding dues.

    MoF extends deadline till January 31, 2021 for submitting ESR notifications

    date: 20210106

    Organized By: Gulf News

    External URL: https://gulfnews.com/your-money/taxation/january-31-deadline-ensure-your-business-abides-by-the-new-uae-economic-substance-rules-1.1592321061342

    Abu Dhabi- January 6, 2020:
    The Ministry of Finance (MoF) has announced the extension of the deadline for submitting Economic Substance Regulations (ESR) notifications and reports.

    All companies in the UAE that engage in any of the ESR’s relevant activities must submit an annual ESR notification to its Regulatory Authority no later than January 31, 2021 in order not to be subject to administrative penalties.

    All companies that fall under this decision are immediately to register an account in the ministry to access the ESR Portal to submit needed reports, notifications and supporting documents electronically before the mentioned deadline as no further extension will be granted to deviating companies.


    FTA conducts a second virtual workshop for tax agents on tax treatment of e-commerce

    date: 20201115

    Organized By: Federal Tax Authority

    External URL: https://www.tax.gov.ae/press-releases/workshop-for-tax-agents-e-commerce

    Abu Dhabi- November 11, 2020:

    The Federal Tax Authority (FTA) confirmed that several general Value Added Tax (VAT) rules apply to e-commerce transactions, in addition to a number of special VAT rules specifically applied to e-commerce transactions. E-commerce refers to the supplies of goods and services on digital platforms, via computers or mobile phones purchased from websites or electronic applications.

    The workshop saw the participation of 225 accredited tax agents and a number of FTA officials. The FTA gave a presentation on how to apply VAT on the supplies of goods and services made within the e-commerce framework and how to calculate VAT on these supplies. The FTA also presented an overview of e-commerce, the principles of VAT on the supply of goods via e-commerce and the supply of electronic services, and the effects of VAT on electronic markets using practical examples. The presentation indicated that all goods and services purchased through online shopping sites are generally subject to 5% VAT if the place of supply is in the UAE. The tax is also applied to most of the goods that are sold inside the UAE; subject to some exceptions per the VAT legislation (such as medicines sold on websites). Additionally, the import of goods is subject to VAT.

    His Excellency Khaled Ali Al Bustani, Director General of the FTA, stressed that the number of FTA accredited tax agents is increasing steadily, in line with the continuous growth of taxable persons within the tax system. H.E. Al Bustani said: “The number of accredited tax agents increased in the first 10 months of 2020 by more than 10% to 515, compared to 468 in the same period last year. This increase provides more opportunities for taxpayers wishing to deal with the FTA through tax agents by offering them an extensive, constantly-updated list of approved agents on the FTA’s website.”

    Click here to read more.

    FTA to issue tax residency certificates

    date: 20201108

    Organized By: Khaleej Times

    External URL: https://www.khaleejtimes.com/business/local/fta-to-issue-tax-residency-and-commercial-activities-certificates

    Dubai- November 8, 2020:

    Tax residency and commercial activities certificates will now be issued through the Federal Tax Authority of the UAE, the FTA said.

    Applications for the certificates can be made through the FTA’s e-services portal from November 14, the authority added.

    Tax residency certificates are issued to eligible government entities, companies and individuals looking to benefit from double taxation avoidance agreements signed between the UAE and other countries, while the commercial activities certificate enables applicants to refund VAT paid in advance outside of the UAE.

    Click here to read more

    Voluntary disclosures by UAE businesses on VAT or excise tax will face heavy penalties

    date: 20201020

    Organized By: Gulf News

    External URL: https://gulfnews.com/business/banking/voluntary-disclosures-by-uae-businesses-on-vat-or-excise-tax-will-now-face-heavy-penalties-1.1603193572243

    Dubai- October 20, 2020:

    There is a major development in the UAE tax litigation landscape.

    In a very significant twist, the voluntary disclosures made by UAE based businesses on their actual VAT obligations will now be charged with late payment penalties (up to 300% of the tax due). Late payment penalties would apply from the due date of the tax return and not from the date of the voluntary disclosure.

    This is according to a ruling by the UAE Federal Supreme Court judgment on an appeal filed by the UAE Federal Tax Authority.

    Click here to read more.

    Higher educational institutions can claim VAT refund

    date: 20200914

    Organized By: Gulf News

    External URL: https://gulfnews.com/business/higher-educational-instiutions-can-claim-vat-refund-1.73822828

    Abu Dhabi- September 13, 2020: The Federal Tax Authority (FTA), has confirmed that higher educational institutions making only zero-rated and/or standard-rated supplies may recover input tax in full, except where recovery is specifically blocked.

    Blocked input tax includes value-added tax (VAT) incurred on certain entertainment services, and motor vehicles that have been purchased, leased, or rented and made available for personal use, the FTA said on Sunday.

    The Authority noted that higher education institutions providing exempt supplies are eligible to recover only a portion of the input tax incurred.

    The FTA’s Basic Tax Information Bulletin focuses on the tax treatment for the higher education sector in respect of universities and higher education institutions recognised by the competent federal or local government entity regulating the higher education sector where the course is delivered.

    Zero VAT for face masks and sanitisers

    date: 20200902

    Organized By: Khaleej Times

    External URL: https://www.khaleejtimes.com/coronavirus-pandemic/fighting-coronavirus-zero-rated-vat-for-face-masks-sanitisers-in-uae-

    Dubai- September 2, 2020: Medical equipment like disposable suits, hand sanitisers, face masks, respirators for air purification and gloves will be subject to zero-rated value-added tax (VAT) in the UAE. A resolution stipulating this was adopted by the UAE Cabinet  to mitigate the repercussions of Covid-19 and support the healthcare sector in the country.

    His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, chaired the meeting at Qasr Al Watan in Abu Dhabi. He hosted virtually a number of teaching staff and students from different schools in the UAE.

    He stressed that education has always been a top priority. “The country exerts unwavering efforts to develop the educational system despite all circumstances,” he said.

     

    UAE Federal Tax Authority launches smart app to detect uncertified tobacco products

    date: 20200825

    Organized By: Federal Tax Authority, tobacco products, smart application, tax evasion

    External URL: https://tax.gov.ae/en/press-releases/UAE-Federal-Tax-Authority-launches-smart-app

    Abu Dhabi-August 25, 2020:  Tax evasion and trade in inferior products and counterfeit goods are among the main challenges facing tax authorities around the world. As part of its on-going efforts to protect consumers from commercial fraud and combat tax evasion with various mechanisms and utilizing the latest technologies, the Federal Tax Authority (FTA) has launched a smart application that can be applied to check on the legality of trademarked tobacco products.

    The app enables consumers to scan the stamps placed on the tobacco packages to verify  that it is an Authority accredited digital tax stamp, ensure that these products meet the standard specifications, are not smuggled, and have been subjected to tax. Should the consumer discover that the stamps are not accredited, they can file a report to the FTA directly from the smart application. The Authority will then cooperate with the relevant authorities to take legal actions against violators.

    The Authority said in a press release issued today that the application has been instigated under the banner, “Monitor yourself, fight fraud”, adding that users can install the app, known as ‘FTA DTS’, on their smart phones via the Apple Store and Google Play.

    Commenting on the initiative, His Excellency Khalid Ali Al Bustani, Director-General of the Federal Tax Authority, said: “The ‘FTA DTS’ smart application is one of the effective tools that support the ‘Marking Tobacco and Tobacco Products Scheme’, which came into effect at the beginning of 2019 to combat tax evasion, protect public health and reduce the risks to consumers from the inferior products entering local markets.”

     

    FTA continues to accomplish achievements, says Hamdan bin Rashid

    date: 20200721

    Organized By: Federal Tax Authority

    External URL: https://tax.gov.ae/press-releases/Federal-Tax-Authority-FTA-Board-of-Directors-holds-first

    Abu Dhabi – July 2, 2020:

    H.H. Sheikh Hamdan bin Rashid Al Maktoum chairs first FTA Board of Directors meeting since Cabinet reconstitution

    The FTA Board of Directors, chaired by His Highness Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, UAE Minister of Finance and Chairman of the FTA Board of Directors, has held its first meeting since the UAE Cabinet of Ministers approved the decision to reconstitute the FTA’s Board of Directors.

    During the virtual meeting held on Monday morning, His Excellency Obaid Humaid Al Tayer, Minister of State for Financial Affairs, was elected as Vice Chairman of the FTA’s Board of Directors.

    • The FTA continues to accomplish positive results and achievements, reflecting the strength of the national economy despite challenges faced by the global economy due to the effects of combating the spread of COVID-19.
    • The FTA supports taxpayers in fulfilling their obligations by efficiently providing services remotely.
    • AED 206 million in tax refunds for 3,124 for UAE Citizens building new residences -a growth of 136.7% over a period of 6 months.
    • An increase of VAT registrants to 335,530 and Excise Tax registrations to 1,159.

    VAT applicable for e-commerce sales, says FTA.

    date: 20200812

    Organized By: Federal Tax Authority

    External URL: https://www.tax.gov.ae/en/press-releases/Federal-Tax-Authority-issues-guide-for-the-e-commerce-sector

    Abu Dhabi, UAE, 12 Aug, 2020: The Federal Tax Authority (FTA) has clarified that Value Added Tax (VAT) is applied on e-commerce services (also known as “electronic commerce”, sometimes referred to as the “digital economy”) upon their actual use or enjoyment in the UAE. Note that although many of the general rules of VAT apply to e-commerce, there are a number of special rules that apply specifically to e-commerce transactions.

    This guide issued by the FTA clarifies how the VAT Law applies to the supply of goods and services provided through electronic means, such as the internet or similar electronic networks. The guide incudes guidance on the application of VAT on goods and services supplied within the scope of e-commerce, and the imposition and accounting for VAT on those supplies.

    The guide outlines the tax treatment of the supply of electronic services, such as services that are provided directly over the internet, an electronic network, or an electronic market, including the supply of domain names, web-hosting and remote maintenance of programs and equipment, software (including the updating thereof), images, text and information provided electronically such as pictures, screen savers, electronic books, documents and other digitized files, music, movies and games on demand, and online magazines.

    Other services identified under the banner of ‘electronic services supplies’ include the supply of advertising space on a website and the rights associated with that advertisement, and Political, cultural, artistic, sports, scientific, educational or entertainment broadcasts, including broadcasts of events, live streaming via the internet, the supply of distance learning services, and services of any equivalent type that have a similar purpose and mission.

    The FTA Director-General, His Excellency Khalid Ali Al Bustani, noted: “Tax legislation in the UAE is characterized by transparency and accuracy, and takes into account the strengthening of the nation’s leadership position as a central economic and commercial center, not only regionally but also at a global level. In light of the increasing importance of the e-commerce sector, clear mechanisms for procedures have been identified. Value Added Tax, as it relates to the supply of goods and services through electronic means, contributes to supporting the activities of this vital sector, which depends on a locally developed digital and technological infrastructure.”

    His Excellency added: “The Federal Tax Authority is keen to apply the best international standards in all its activities and the services it provides to its customers, and to contribute to preserving the advanced competitive position of the country across all sectors, with the means to encourage creativity and innovation.”

    His Excellency Khalid Al-Bustani asserted that the FTA is making continuous efforts to contribute to supporting the national economy in general, and the digital economy. His Excellency mentioned, in particular, that the e-commerce sector is witnessing rapid growth, as the UAE is one of the fastest growing e-commerce markets in the region, enhanced by the availability of an advanced digital infrastructure, and a growth-friendly legislative environment.

    The FTA indicated that all goods and services purchased through online shopping sites are subject to 5% VAT if the place of supply is in the UAE, like any other purchases made by traditional means, as per the special provisions governing the tax treatment of supplies.

    The guide, which has been published on the FTA’s website, www.tax.gov.ae, makes the point that in traditional trade transactions, goods and services are usually supplied from a physical location such as a store or representative office, with the supplier or recipient present at the same site. For e-commerce, however, it generally refers to the supply of goods and services that take place on the internet or similar electronic networks, where goods and services are obtained or supplied through electronic means such as computers or mobile phones via websites or electronic applications (apps).

    The guide also provides guidance on the VAT treatment of goods purchased through electronic platforms and services supplied through electronic means, indicating that taxable persons should charge VAT to customers when supplying taxable goods or services (generally, at the standards rate of 5%, or where the VAT Law permits, at a rate of 0%). If the supplies are exempt from tax, these supplies are not treated as a taxable supplies and therefore no VAT needs to be charged on these supplies.

    The FTA clarifies in its guide that different conditions and requirements may apply to mandatory or voluntary registration, depending on whether a person has a place of residence in the UAE. A person has a place of residence within in the UAE for the purposes of VAT registration if he has a place of establishment in the UAE.

    The guide also deals with the legal requirements for compulsory and voluntary registration, noting that a non-resident may not register voluntarily for VAT on the basis of his ‘taxable expenses. Furthermore, the guide sets out the criteria for determining the place of supply (whether it is inside or outside the UAE), the VAT treatment for supplies of goods through online platforms where the suppliers are UAE residents who are subject to tax, and for suppliers who are not resident in the UAE.

    The guide also provides more information on the procedures for recovering input tax on e-commerce transactions and the application of the ‘reverse-charge mechanism’ which could apply on e-commerce transactions. The revers-charge mechanism aims to reduce the burden of compliance and the administrative burden related to collecting VAT from non-resident suppliers. It levels the playing field between the supply of services or goods from a supplier outside the UAE and by a local supplier. This ensures that local UAE suppliers in the country are not prejudices as a result of consumers purchasing online from foreign suppliers.

    All other aspects related to the tax treatment of supplies made through agents and the requirements for tax invoices in e-commerce transactions are detailed in the guide, which is available on the FTA’s website, www.tax.gov.ae.

    FTA's dialogue led to smooth VAT implementation in the UAE, says Abdulla Al Gurg

    date: 20190910

    Organized By: Arabian Business

    External URL: arabianbusiness.com/politics-economics/427427-ftas-dialogue-led-to-smooth-vat-implementation-in-the-uae-says-abdulla-al-gurg

    The UAE’s Federal Tax Authority’s (FTA) dialogue with larger corporations will eventually trickle down to smaller traders, among whom the value-added tax (VAT) process has sometimes been problematic, according to according to Abdulla Al Gurg, the CEO of the Easa Saleh Al Gurg Group (ESAG).

    According to Al Gurg, ESAG – which is the exclusive UAE agent for the British American Tobacco Company and its subsidiaries – is one of the most significant sources of revenue from VAT and excise tax in the country.

    Despite some concerns that were expressed ahead of the implementation of VAT, Al Gurg said he believes the process was overall handled smoothly.

    “I respect them [the FTA] and admire their hard work creating something from nothing,” he said. “It must have been a huge challenge to take it from the point of just being an instruction to the point of actual being a thing that we live by.”

    Al Gurg added that “everything has a process, and I think it couldn’t have been better”.

    “I admire the approach and willingness of discussion they had with us,” he added.

    “You don’t get a lot of government entities that are very open in dialogue.”

    Trickle-down effect

    Although he said that some – particularly smaller companies – have faced difficulties with the VAT process, he is confident that the FTA’s willingness to address them with larger companies will have a trickle-down effect on the economy.

    “I’m not saying there are no problems, but when there is a problem, it is handled and taken care of,” he said. “Maybe the small traders don’t feel that way. It’s a very different experience

    “But if they are willing to change for us, the effects will ripple through,” he added. “It just needs a bit more patience.”

    In June, the government announced that it collected AED 27 billion in VAT last year, far exceeding its target of AED 12 billion.

    UAE's Federal Tax Authority issues warning over VAT scam

    date: 20190910

    External URL: https://www.arabianbusiness.com/banking-finance/427698-uaes-federal-tax-authority-issues-warning-over-vat-scam

    The UAE’s Federal Tax Authority on Tuesday issued a warning after reports of scammers trying to target bank customers over VAT refunds.

    In response to reports that some bank customers have received emails from unidentified sources impersonating banks and financial institutions requesting personal data in the promise of helping them claim VAT refunds, the FTA reaffirmed that they can only be processed through its official website.

    The authority said that some recipients have been asked to provide personal data, including names, credit card numbers, and PIN codes, claiming that providing the information will allow them to recover VAT.

    “Refunding taxes for legally eligible applicants is a direct transaction between the registered business and the FTA, and does not call for any intermediaries,” it said in a statement.

    “The process is completed via advanced electronic systems, available on the FTA’s official website, which includes security features for financial transactions. It is done through official channels using the International Bank Account Number (IBAN), and via systems under the authority of – and electronically linked to – the UAE Central Bank.”

    The FTA warned all registered businesses, calling on them to remain vigilant and maintain the confidentiality of their personal data.

    VAT receipts set to boost Ras Al Khaimah surplus in 2019, says Fitch

    date: 20190906

    Organized By: Arabian Business

    External URL: https://www.arabianbusiness.com/politics-economics/426118-vat-receipts-set-to-boost-ras-al-khaimah-surplus-in-2019-says-fitch

    Fitch Ratings has affirmed Ras Al Khaimah’s long-term foreign-currency issuer default rating (IDR) at ‘A’ with a stable outlook, saying the emirate has a low and declining government debt burden and high GDP per capita.

    The ratings are also supported by the benefits of RAK’s membership of the UAE, while the emirate’s small size and weaknesses in the policy framework weigh on the ratings, Fitch said in a statement.

    “The emirate derives substantial support from its membership of the UAE… Close integration within the UAE has allowed the emirate to focus on its development strategy and build a relatively diversified economy dominated by manufacturing and services,” it added.

    Fitch said it expects the debt of the government and its state-owned enterprises to fall to below 20 percent of GDP in 2019 from 33 percent in 2015.

    It added that the debt will fall further to close to 17 percent of GDP in 2020 as the government uses VAT receipts for the early repayment of AED678 million of private placements.

    Fitch noted that the government’s fiscal surplus increased to 2.6 percent of GDP in 2018 from 1.4 percent in 2017, buoyed by the recovery of mining and quarrying activities and receipts from the sale of the government’s 41 percent stake in Union Cement Company.

    Fitch also forecast a fiscal surplus of 2.7 percent of GDP in 2019, largely underpinned by RAK’s receipt of close to two years’ worth of VAT, amounting to over 2 percent of GDP.

    VAT was introduced in the UAE in 2018 and collected at the federal level, but an agreement on the share to be remitted to individual emirates was only reached in early 2019, which delayed the disbursement of the first year’s collection.

    Fitch added that GDP growth will slow slightly to 2.5 percent in 2019 from 2.8 percent in 2018 as the momentum from the rebound after the Qatar embargo fades and UAE-wide growth is expected to remain muted while the development of RAK’s container port could also spur new investment in the free zones and the broader economy.

    However, the continuation of the housing market slump in Dubai has led to a reduction in building permits and mortgages issued in RAK and could also weigh on tourism, Fitch said.

    Decreasing hotel occupancy rates were seen during the first half of 2019 although they remain high.

    “The government is making progress on developing the emirate as a tourist destination, and a doubling of hotel capacity by 2023 is in the pipeline. A further escalation of tensions between Iran and the US and its regional allies could also have repercussions for RAK,” Fitch noted.

    What is the penalty for not submitting a tax return on time?

    date: 20190812

    Organized By: Khaleej Times

    External URL: https://www.thenational.ae/business/money/vat-q-a-what-is-the-penalty-for-not-submitting-a-tax-return-on-time-1.897461

    The Federal Tax Authority always gives businesses a minimum of 28 days after the end of the reporting quarter to prepare and file their VAT return. When the 28th of the following month falls on either a Friday or Saturday, the deadline moves to the next working day. Any VAT returns not filed by the given deadline should be submitted as soon as possible afterwards. The FTA portal will allow you to file a return for a quarter after the deadline has passed. In fact you cannot file another VAT return until you have filed the previous one, so it forces you to file returns sequentially, even if you have missed a deadline.

    The FTA impose separate penalties for failing to file a return and failing to make payment by the given deadline.

    There is an automatic penalty for missing a filing deadline which is Dh1,000 in the first instance and then Dh2,000 for subsequent missed deadlines within 24 months.

    If you fail to settle the tax due by the deadline you will be charged 2 per cent of the unpaid tax, which is charged immediately after the due date. This rises to 4 per cent of the unpaid tax if you have not paid up within seven days of the deadline. If you have still not paid a month after the deadline, you are charged at a rate of 1 per cent each day until the penalty reaches 300 per cent of the tax due. Note that if you make a payment but fail to file the corresponding return, the FTA will not recognise the payment until the return is filed.

    FTA begins procedures on updated excise goods

    date: 20190824

    Organized By: WAM/Nour Salman

    External URL: http://www.wam.ae/en/details/1395302781424

    The Federal Tax Authority, FTA, has begun carrying out procedures related to implementing the latest Cabinet Decision on Excise Goods, Excise Tax Rates, and the Method of Calculating the Excise Price, issued in August 2019, which expanded the scope of excise goods to include electronic smoking devices and liquids, and sweetened drinks.

    The new Decision goes into effect on 1st January 2020, adding these products to the list of Excise Goods, which included tobacco and tobacco products, energy drinks, and carbonated drinks – products that have been subject to Excise Tax since 1st October 2017.

    In a press statement issued today, the Authority asserted that the new Decision is part of the government’s continuous efforts to promote healthy lifestyles in the UAE community and curb the spread of diseases stemming from consumption of harmful goods. These measures align with the UAE Vision 2021, which seeks to ensure the UAE is among the best countries in the world across all sectors.

    As part of the first phase of implementing the Cabinet Decision, the FTA called on producers, importers, and stockpilers of sweetened drinks with added sugar to abide by the Decision and start registering for excise tax purposes, noting that Excise Tax is an indirect tax that is imposed on certain products deemed harmful in an effort to curb their consumption.

    The Authority revealed that it has updated the electronic registration system for excise goods to allow for adding the new products included in the amended Cabinet Decision.

    An entirely new registration procedure was put in place as of 18th August 2019, and the FTA called on all concerned businesses – including producers, importers, and stockpilers of Excise Goods – to take the initiative and register said goods in the new system.

    MoF announces amendment of the Cabinet Decision on excise goods, rates

    date: 20190821

    Organized By: WAM/Hassan Bashir/Hatem Mohamed

    External URL: http://www.wam.ae/en/details/1395302781065

    In order to direct efforts towards reducing the negative effects of harmful consumption patterns, the Ministry of Finance announced the details of the amendment of Cabinet Resolution No. (38) of 2017 regarding excise goods, excise tax rates and the formula to calculate the excise price.

    In addition to the goods currently subject to excise tax (i.e. tobacco products, soft drinks and energy drinks), excise tax will also be imposed on e-cigarettes and the liquids used with them, as well as beverages sweetened with added sugar.

    The decision to amend excise goods and the formula of calculating excise price is to achieve government directives in terms of rationalizing consumer behavior related to harmful products, which contributes to raising community members’ public health levels, and reducing the negative health consequences caused by these products. This decision is in line with the UAE’s commitment to implementing the GCC Unified Agreement for Excise Taxes and to complement efforts to achieve economic integration among the GCC countries.

    Obaid bin Humaid Al Tayer, Minister of State for Financial Affairs, pointed out that these new amendments to the Cabinet’s decision on excise tax are part of the UAE’s keenness to reduce harmful consumer practices by establishing a legislative and procedural base that supports national efforts to curb unhealthy practices that cause chronic diseases.

    He said: “These amendments comes in line with the government’s orientation that excise tax policy targets consumption patterns harmful to public health, in order to complement efforts to raise awareness about the damaging effects of consumables harmful to health. It contributes to strengthening the health system’s work in controlling prevalent diseases and reducing the cost of treating them, promoting community health, motivating individuals to spend effectively, reducing the negative impact of harmful substances on the environment, and encouraging producers to develop better alternatives.”

    Pursuant to these amendments, effective 1 January 2020, a 100% excise tax on electronic smoking appliances and liquids used in these devices, and 50% excise tax on beverages and sugary drinks has been set. These goods were identified in addition to existing excise goods such as tobacco and tobacco products (100%), energy drinks (100%) and soft drinks (50%). The decision also specified the formula of calculating the excise and retail price, and the Federal Tax Authority (FTA) shall have the power to determine the procedures necessary to prove the classification of any product as an excise good.

    At the same time, the Cabinet set the minimum standard price for tobacco products, which set the excise price of tobacco products not less than 0.4 dirhams per roll of cigarettes, and 0.1 dirhams per gram of hookah tobacco, ready-to-use tobacco and similar products. The Minister of Finance will issue a decision on the implementation date, which is set to be before 1 January 2020.

    How to make 'recovery of cost' under VAT

    date: 20190827

    Organized By: Nimish Goel and Sunny Kachalia

    External URL: https://www.khaleejtimes.com/business/how-to-make-recovery-of-cost-under-vat

    Taxability of ‘recharges’, typically applicability of VAT is a subject matter of debate and interpretation across the VAT jurisdictions. The term ‘recharge’ also commonly known as ‘recovery of cost’ is generally not defined in the legal statues but has gained significant importance from a VAT determination viewpoint, purely because it is not clear whether a recharge in itself involves any supply of goods or services attracting VAT.

    A recharge happens when there are three entities involved. For example, Entity B incurs costs charged by Entity A which are then recharged by Entity B to Entity C. In each of the supplies, the VAT treatment could potentially change, depending on nature of the transaction, relationship between the entities and whether recharge is at cost or with a mark-up.

    The challenge in determining the VAT liability for recharges are multi-fold.

    First, it needs to be determined whether the costs that are recharged were incurred for customer’s direct benefit or were they, in fact consumed by the supplier and later recharged to the customer.

    Second, it needs to be determined whether the recharge in itself constitutes an independent supply or is it ancillary to the principal / main supply. Also, it is equally important to ascertain whether the person reimbursing the amount is acting in the capacity of an agent (i.e. recovering payment made on behalf of another person) or recovering the expenses incurred as a principal.

    Sugary drinks to cost more in UAE from January 2020

    date: 20190820

    Organized By: Waheed Abbas

    External URL: https://www.khaleejtimes.com/news/government/sugary-drinks-to-cost-more-in-uae-from-january-2020-

    The UAE will levy excise tax on additional sugary and smoking products from next year in order to reduce consumption of these unhealthy products linked to chronic diseases.

    The UAE Cabinet has approved a proposal to impose 50 per cent excise tax on products with added sugar and sweeteners, whether in the form of a beverage, liquid, concentrate, powders, extracts or any product that may be converted into a drink. While 100 per cent excise tax will be levied on electronic smoking devices – whether or not they contain nicotine or tobacco – liquids used in electronic smoking devices will also be levied the same tax.

    From October 2017, the UAE started to levy 50 per cent “sin tax” on sugary and energy drinks and 100 per cent tax on smoking products in order to curb the consumption of these harmful products.

    Anurag Chaturvedi, managing partner at Chartered House Tax Consultancy, said the new products which are likely to be included in the list are candies, cookies, cakes, pastries, pies, doughnuts, canned juices, ice creams, yogurts, milkshakes etc.

    “We have already seen the impact on energy drinks, where a fall of 65 per cent in sales was reported after the introduction of the excise tax. Definitely, I see a reduction in the sale of these products as the prices shall go up. With VAT already being levied on these products and with the addition of excise tax, prices will go up and consumers automatically shall reduce the consumption of these products,” said Chaturvedi.

    He said UAE businesses must expedite their process as January 1, 2020, provides not too much time for companies to upgrade their systems, educate their employees and be prepared for this new introduction of excise levy on products with added sugar and sweeteners.

    A statement released by the Cabinet General Secretariat said that manufacturers of these sugary products must clearly identify the sugar content to make it easier for the consumers to make sensible healthy choices.

    Nirav Shah, director at Fame Advisory DMCC, said it would be very interesting to see what this list will include as sweetened beverages could be as common as soft drinks, or the authorities will restrict it to excessive sugary sports drinks only.

    “Inclusion of e-cigarette is interesting too, as their contention has been that they do not contain tobacco and used frequently by people trying to stop tobacco consumption. Moreover, all of these items will have to comply with stringent requirements for sale in local markets, similar to other products covered in excise,” Shah said.

    The UAE will also add tobacco products used in shisha under excise tax from the fourth-quarter of this year, prohibiting the import of any type of shisha tobacco into the country if they don’t bear the digital marks.

    The UAE enjoys one of the highest tax compliance rates of close to 100 per cent for tax return requirements of excise tax, which is estimated to generate up to Dh7 billion in annual revenues for the UAE federal budget. With the addition of new items under the “sin tax”, revenues are expected to increase next year. The UAE also imposed five per cent value-added tax (VAT) on a host of goods and services from January 2018, which helped the UAE raise Dh27 billion.

    Expo 2020 will drive VAT in UAE by US$8bn

    date: 20190821

    Organized By: David Snook

    External URL: https://www.intergameonline.com/coin-op/news/expo-2020-will-drive-vat-in-uae-by-us8bn

    Dubai’s Expo 2020 will drive VAT revenues over $8bn this year, according to Rajiv Hira, chairman, RHMC Managing Consultants. However the large increases would not be sustained long-term.

    Hira, in a newspaper interview in the Arabian Business, said that over 300,000 businesses and tax groups registered for VAT would provide the figures.

    Nearly 200 countries are participating in the Expo 2020, reports the tax consultancy, with growth in retail, hospitality, aviation and shipping.

    “Considering the distribution of $7.3bn (AED27bn) on account of VAT, it can be easily concluded too touch around $8bn although we will be observing an increase in capital spending at a faster and larger scale, whereas VAT collection will not increase in that speed.”

    In another report, the VAT tax revenues are being split between central and local government, by the UAE Cabinet, at a ratio of 30-70 in favour of local government.

    Around 25 million people are expected to visit Dubai for Expo 2020.

    Federal Tax Authority launches new electronic system to register excise goods

    date: 20190817

    Organized By: Tariq alfaham

    External URL: http://www.wam.ae/en/details/1395302780330

    The Federal Tax Authority,FTA, has launched a new electronic system for registering excise goods as part of its plans to continuously develop the tax system as a whole, and excise tax procedures, in particular.

    In a press statement issued today, the authority explained that the new system offers accurate and transparent procedures for registering excise goods with clear guidelines and standards in addition to the new reporting requirements related to excise tax returns and declarations.

    The launch is aligned with the UAE leadership’s directives to enhance the country’s global competitiveness through continuous improvement of government services and ensuring accurate and transparent processes.

    The FTA called on all businesses dealing with excise goods to follow the new process of registering excise goods and ensure all required documents are readily available when submitting the registration request for the goods. The requirements clarified in the new guides include products details, ingredients, marketing information including images and videos, lab tests in some cases, and the retail price of the product based on the UAE retailers or in the relevant country in case it is not sold in the UAE.

    In relation to the new reporting requirements of the excise tax, the authority urged the excise taxable persons to comply with the new declarations and tax return forms and reporting requirements including import, produce, release from designated zones, and local purchase scenarios, which ensures increased transparency and accuracy. Additionally, The Authority pointed to the new manuals and guides it launched to raise awareness among taxpayers and offer them instructions on how to register excise goods in the new system, and comply with the new reporting requirements and forms in the excise tax system. The FTA invited businesses subject to excise tax to make use of these manuals to educate their staff about the new system, as well as the procedures for implementing excise tax in general.

    Any Person who produces or imports an excise good to be sold in local markets is subject to excise tax, as is any Person who stockpiles said goods or releases them from a designated area, the FTA asserted, urging all relevant businesses to take the initiative and register their excise goods in the new system, as per the terms and conditions stipulated in the Cabinet Decision on excise goods, which specifies the tax rates they are subject to and outlines the method used to calculate excise prices.

    The FTA asserted that there is no threshold for excise tax, meaning that any business with activities involving excise goods is required to go ahead and register in the new system, calculate its tax amounts, and refer to the FTA website for information and manuals that outline the required procedures for producers and importers of excise goods, and for excise goods stored in designated zones.

    Transfer of a Business as a Going Concern - VATP015

    date: 20190822

    External URL: http://www.allaboutvat.com/wp-content/uploads/Summary-VATP-015-Transfer-of-a-Business-as-a-Going-Concern-21Aug2019.pdf

    In accordance with Article 7(2) of the Federal Decree-Law No. (8) of 2017 on Value Added Tax (the “Decree-Law”), the transfer of whole or an  independent part of a business from a person to a taxable person for the purposes of continuing the business that was transferred is not considered to be a supply for VAT purposes.

    As a consequence of not being a “supply” for VAT purposes, such transfer of  a business, commonly known as a “transfer of business as a going concern” or a “TOGC”, is not subject to VAT. This rule has a compulsory application.

    Summary

    This Public Clarification discusses the conditions that have to be met for a  transfer to qualify as a transfer of a going concern under Article 7(2) of the
    Decree-Law.

    UAE Cabinet to expand list of excise taxable products in January 2020

    date: 20190821

    Organized By: Nour Salman

    External URL: http://wam.ae/en/details/1395302780784

    In a step to reduce consumption of unhealthy goods and modify consumers’ behaviour, the UAE Cabinet adopted a decision to expand the list of excise taxable products to include sweetened beverages, sugary drinks and electronic smoking devices, starting 1st January 2020.

    According to a statement released by the Cabinet General Secretariat, “The decision comes to support the UAE government’s efforts to enhance public health and prevent chronic diseases directly linked to sugar and tobacco consumption.”

    “A tax of 50 percent will be levied on any product with added sugar or other sweeteners, whether in form of a beverage, liquid, concentrate, powders, extracts or any product that may be converted into a drink,” the statement added.

    “The decision also requires manufacturers to clearly identify the sugar content in order for consumers to make sensible healthy choices.

    “A tax of 100 percent will be also levied on electronic smoking devices, whether or not they contain nicotine or tobacco, as well as the liquids used in electronic smoking devices. The decision aims at reducing the consumption of harmful products that put the health of people and environment at risk,” it continued.

    “In 2017, the UAE Government started introducing excise tax on specific goods, which are typically harmful to human health or the environment,” the General Secretariat of the Cabinet concluded.

    New UAE tax rule on two products from November 1

    date: 20190819

    Organized By: Staff Report

    External URL: https://www.khaleejtimes.com/business/local/fta-to-implement-phase-2-of-tobacco-marking-scheme

    The Federal Tax Authority (FTA) is ramping up its efforts in preparation to implement the second phase of the ‘Marking Tobacco and Tobacco Products Scheme’, where it will be expanded to cover waterpipe tobacco (known in Arabic as ‘Mu’assel’) and electrically heated cigarettes as of November 1, 2019.

    Digital Tax Stamps will be made available for purchase by producers and importers of waterpipe tobacco and electrically heated cigarettes, the authority revealed, as it held its second awareness workshop in Dubai to introduce them to the scheme’s procedures and objectives, as well as the timeline for the second phase. The workshop was led by FTA experts and representatives from De La Rue, the company commissioned by the authority to operate the system.

    The FTA asserted that the scheme was launched to support its efforts to collect taxes, combat tax evasion, and protect consumers from commercial fraud. The FTA went on to note that these preparations follow the successful implementation of the Scheme’s first phase, where the sale and possession of any cigarette packets not bearing the ‘Digital Tax Stamps’ was prohibited across local markets as of Thursday, August 1, 2019.

    FTA director general, Khalid Ali Al Bustani, said: “This workshop is part of the authority’s plan to raise tax awareness among taxable businesses, maintain constant communication with professionals working across all economic activities, and keep them in the loop with regards to the latest developments in tax procedures. These workshops allow us to listen to their opinions and suggestions, and address any obstacles they may be facing to ensure a smooth implementation of tax laws. The authority is committed to strengthening its partnerships with the various relevant entities in both the government and the private sector. These strategic partnerships are crucial for successfully implementing the tax system.”

    He added that the FTA is also dedicated to organising continuous awareness campaigns, seminars, and workshops for all business sectors. FTA experts went into the details of the upcoming phase two of the ‘Marking Tobacco and Tobacco Products Scheme’, noting that as of November 1, 2019, the Digital Tax Stamps will be made available for purchase, where producers and importers of waterpipe tobacco (‘Mu’assel’) and electrically heated cigarettes are required to place them on these products to indicate that all due taxes have been settled. As of March 1, 2020, it will be prohibited to import into the UAE any of the Excise Goods outlined in FTA Decision No. (2) of 2019 on Marking Tobacco and Tobacco Products, if they do not bear the stamps. Then starting on June 1, 2020, it will no longer be permissible to supply, transfer, store, or possess said Excise Goods in the UAE unless they have the stamps.

    Expo 2020 Dubai to help drive VAT revenues over $8bn this year

    date: 20190814

    Organized By: Gavin Gibbon

    External URL: https://www.arabianbusiness.com/politics-economics/425747-expo-2020-dubai-to-help-drive-vat-revenues-over-8bn-this-year

    Increased spending on Expo 2020 will help value added tax (VAT) revenues in the UAE push to over $8 billion (AED30bn) this year, according a Dubai-based tax consultancy.

    Revenues will also be boosted by a growth in retail, hospitality, aviation and shipping, but Rajiv Hira, chairman, RHMC Management Consultants, said the huge increases will not be sustained over the longer term.

    Hira told Arabian Business: “Considering the distribution of $7.3bn (AED27bn) on account of value-added tax, it can be easily concluded to touch around $8bn (AED30bn), although we will be observing an increase in capital spending at a faster and larger scale, whereas VAT collection will not increase in that speed, due to the following factors: Entities will be entitled able to claim input tax on capital spending; and VAT is already paid on account of advances for the projects related to 2020 (including other capital spendings).”

    Dubai businessman Khalaf Al Habtoor urges for end to Skype ban in UAE

    date: 20190807

    Organized By: Aarti Nagraj

    External URL: https://gulfbusiness.com/dubai-businessman-khalaf-al-habtoor-urges-for-end-to-skype-ban-in-uae/

    Dubai billionaire businessman Khalaf Al Habtoor has urged the UAE leadership to reconsider fees such as VAT while also renewing his call to lift the ban on VoIP services such as Skype and WhatsApp.

    “Our region is going through tough political conditions that affect the economic climate in general,” the founder and chairman of conglomerate Al Habtoor Group said on Twitter.

    The Emirati businessmen urged UAE leaders “to reconsider some of the laws, practices and fees imposed, which will have a positive impact on the economy”.

    The UAE imposed a 5 per cent value added tax (VAT) on goods and services in January 2018.

    Banned in UAE: Sale and possession of cigarettes without Digital Tax Stamps is prohibited from 1st August

    date: 20190801

    Organized By: Gulf News Web Report

    External URL: https://gulfnews.com/uae/government/banned-in-uae-sale-and-possession-of-cigarettes-without-digital-tax-stamps-from-august-1-1.1564572318879

    Abu Dhabi: From tomorrow, August 1, the sale and possession of all types of cigarettes not bearing the Digital Tax Stamps will be prohibited across UAE markets – the Federal Tax Authority (FTA) announced.

    Prohibiting the sale in local markets of cigarettes packets not bearing the Digital Tax Stamps is part of the timeline set for the ‘Marking Tobacco and Tobacco Products Scheme’, which went into effect at the beginning of 2019.

    What does the tax stamp mean?

    The scheme seeks to electronically track cigarettes packs from the production facility and until they reach the end-consumer, in order to protect consumers from low-quality products, combat tax evasion, and ensure that the Excise Tax due on these products has been settled.

    This is as per Cabinet Decision No. (42) of 2018 on Marking Tobacco and Tobacco Products and FTA Decision No. (3) of 2018 on Implementing the Marking Tobacco and Tobacco Products Scheme.

    “The Authority has sought to implement an integrated and widespread awareness campaign starting from the second quarter of 2018 – several months before the ‘Marking Tobacco and Tobacco Products Scheme’ went into effect – to allow sufficient time for local markets to prepare for the Scheme and avoid any adverse effects to their commercial activities,” FTA Director General Khalid Ali Al Bustani explained.

    “Furthermore, the Authority collaborated with the system operator to carry out an extensive awareness campaign through its official website, social media accounts, newspapers, television, and radio. Workshops were organised, bringing together individuals and organisations involved in the manufacture and trade of tobacco and tobacco products, introducing them to the Scheme, and answering their queries.”

    UAE VAT collection set to grow 30% to Dh35 billion in 2019

    date: 20190801

    Organized By: Waheed Abbas

    External URL: https://www.khaleejtimes.com/business/local/uae-vat-collection-set-to-grow-30-to-dh35-billion-in-2019-

    Greater compliance due to new legal aspects such as country-by-country reporting and Base Erosion and Profit Shifting (Beps), increased spending for Expo 2020, and more companies listing for value-added tax (VAT) will help the UAE to increase its revenues through VAT by up to 30 per cent this year, say tax experts.

    Jomon K. George, chairman of The Institute of Chartered Accountants of India’s South Region, estimated that the UAE’s VAT collection is expected to increase by Dh8 billion or 30 per cent in 2019 to reach Dh35 billion as compared to Dh27 billion last year.

    “With increased Expo 2020 spending, VAT revenues would easily be Dh35 billion-plus this year. The way Expo is being marketed by Dubai, naturally the spending and consumption will increase which will enhance tax collection in the UAE, notably in Dubai,” George said.

    Sangeetha Nahar, executive member of The Institute of Chartered Accountants of India (ICAI) – Dubai chapter, believes that awareness is spreading and the market is becoming more mature.

    Designated Zones for the purposes of the Federal Decree-Law No. (8) of 2017 on  Value Added Tax

    date: 20190731

    External URL: http://www.allaboutvat.com/wp-content/uploads/Designated-Zones-11-07-2019-Latest.pdf

    Based on:
    – Cabinet Decision No. (59) of 2017 on Designated Zones for the purposes of the
    Federal Decree-Law No. (8) of 2017 on Value Added Tax (effective 1 January
    2018); and
    – Cabinet Decision No. (35) of 2018 on Amending the List of Designated Zones
    Annexed to the Cabinet Decision No. (59) of 2017 on Designated Zones for the
    purposes of the Federal Decree-Law No. (8) of 2017 on Value Added Tax (effective
    18 June 2018).
    – Cabinet Decision No. (43) of 2019 on Amending the List of Designated Zones
    Annexed to the Cabinet Decision No. (59) of 2017 on Designated Zones for the
    purposes of the Federal Decree-Law No. (8) of 2017 on Value Added Tax (effective
    4 July 2019).

    VAT Public Clarification VAT Treatment of Options and Option Premiums VATP014

    date: 20190731

    External URL: http://www.allaboutvat.com/wp-content/uploads/VATP014-Public-clarification-Option-premiums.pdf

    This PC clarifies that options in only equity and dent instruments would be treated as exempt.

    Significantly tax credit notes can be issued for reversing any earlier wrongly charged VAT and the resultant VAT impact should be executed by both the parties in their VAT records.

    VAT Public Clarification Disbursements & Reimbursements VATP013

    date: 20190731

    External URL: http://www.allaboutvat.com/wp-content/uploads/VATP013-Disbursements-and-Reimbursements.pdf

    The key elements to consider payments as disbursements:

    The payments should be made as an agent of the principal.

    The invoice should be in the name of principal.

    There should be authorisation from principal for payt.

    There should not be any markup on the transaction.

    Federal Tax Authority showcases progress made on Indirect Taxes in the UAE

    date: 20190718

    Organized By: AMEinfo Staff

    External URL: https://www.ameinfo.com/industry/real-estate/federal-tax-authority-indirect-taxes-uae

    The Federal Tax Authority (FTA) is invested in facilitating procedures for the Value Added Tax (VAT) Recovery on the Building of New Residences by UAE Nationals programme, asserted His Excellency Khalid Ali Al Bustani, FTA Director General, at a discussion held at the Majlis of H.E. Abdullah Muhair Al Kutbi in Al Mushrif, Abu Dhabi.

    “The VAT Recovery on the Building of New Residences by UAE Nationals programme is in line with the wise leadership’s vision to develop a modern housing system for citizens and ensure their wellbeing,” H.E. Al Bustani explained, revealing that the second quarter of 2019 witnessed significant growth in the number and value of transactions submitted by UAE nationals who’ve built new homes. More than 390 applications – worth approximately AED18 million ($4.9 million)– were submitted in Q2 2019 by UAE citizens who successfully recovered the taxes they incurred on building their homes, up from 235 application (worth AED9.76 million or $2.66 m) submitted in Q1 2019. This amounts to a 66% growth in the number of applications received and an 84.4% increase in the value of these transactions.

    FTA reports 110 percent growth in number of authorised tax agents in 2019

    date: 20190716

    External URL: https://www.emirates247.com/news/emirates/fta-reports-110-percent-growth-in-number-of-authorised-tax-agents-in-2019-2019-07-16-1.687012

    The first half of 2019 saw the number of authorised tax agents increase by more than 110 percent to exceed 370 agents, up from 176 at the end of 2018, asserted the Federal Tax Authority, FTA, as it hosted the second Meeting of Tax Agents.

    The authority noted that the growth in the number of authorised agents provides a wider array of options for taxable persons or entities who choose to deal with the authority via an agent. This, in turn, promotes self-compliance among businesses, as it offers them counsel and support to carry out their tax obligations.

    FTA Director-General, Khalid Ali Al Bustani, inaugurated the meeting, which was attended by all 370 tax agents. He said, “These periodic meetings truly embody the effective collaboration between government entities and the private sector, which work together for the greater good and to elevate the national economy.”

    Noting that the authority has published a series of guides and e-learning modules on its website covering the legislative and executive aspects of the tax system, Al Bustani urged tax agents to benefit from these publications and study them extensively to improve their knowledge of the UAE tax system.

    FTA Board of Directors Holds 9th Meeting, Showcases Report on the Authority’s Accomplishments and Ongoing Development Projects

    date: 20190724

    External URL: https://www.tax.gov.ae/press-releases/FTA-Board-of-Directors-Holds-9tht

    The Board of Directors of the Federal Tax Authority (FTA) held its ninth meeting today (Wednesday, July 24, 2019) headed by FTA Chairman His Highness Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, UAE Minister of Finance, at the Ministry of Finance’s headquarters in Dubai.

    The Board looked into the performance of the FTA’s various systems, which facilitate registration, the submission of Tax Returns, and refunding tax to legally eligible groups through multiple Schemes, including the VAT refunds for nationals building new residences in the UAE, the Tax Refunds for Tourists Scheme, and the VAT Refunds for Business Visitors.

    The FTA Board of Directors ratified the Authority’s financial statements for 2017 and 2018, and approved several executive decisions regarding the FTA’s internal regulatory and administrative policies and operations. Attendees at the meeting then went on to showcase the Authority’s recent accomplishments, where the various tax schemes have exhibited improved performance, and the number of businesses and tax groups registered for VAT surpassed 307,000, while the number of those that registered for Excise Tax totalled 724.

    Furthermore, the figures revealed that the user base for the tax system is expanding rapidly, which compelled the Authority to authorise more than 123 clearing and forwarding companies, increase the number of accredited Tax Agents to 395, and commission 28 accredited tax accounting software vendors.

    H.H. Sheikh Hamdan bin Rashid Al Maktoum applauded the FTA’s performance and achievements, which were also lauded by experts, as well as local and international institutions. H.H. went on to highlight the Authority’s efforts to achieve the tax system’s stated developmental, economic, and social objectives, citing the strategic partnerships the FTA has forged with government and private entities, which catalysed the drastic increase in self-compliance rates and in tax awareness among taxpayers and the public.

    “The tax system has begun achieving many of its main objectives, most notably the diversification of the UAE’s resources,” H.H. added. “This allows us to continue providing high-quality services for future generations, in line with the UAE Vision 2021 and its objectives to build a sustainable ecosystem and integrated infrastructure.”

    UAE must allow itself flexibility on tax regime

    date: 20190723

    Organized By: Abdulnasser Alshaali, Special to Gulf News

    External URL: https://gulfnews.com/business/analysis/uae-must-allow-itself-flexibility-on-tax-regime-1.65340045

    VAT itself must be treated as a work in progress and changes made where and when needed.

    In 2018, the UAE’s Gross Domestic Product (GDP) was estimated at $414 billion. It was in the same year that a value-added tax (VAT) of 5 per cent was introduced for the first time, with a targeted revenue of Dh12 billion.

    The federal share of the revenues was set at 30 per cent, and the seven emirates claiming the remainder 70 per cent. According to the CIA Factbook’s 2017 estimates, UAE’s household consumption alone represented 34.9 per cent of GDP, which when multiplied by $414 billion and then by 5 per cent produces a projected VAT revenues’ figure of Dh26.5 billion.

    That said, VAT revenues collected in 2018 surpassed the announced target, with Dh27 billion. Of the Dh27 billion, Dh8.1 billion went to the federal government and Dh18.9 billion to the seven emirates in proportion to the share of VAT-related transactions that took place in each emirate.

    As a result, Dubai claimed the highest share among the seven, receiving more than 40 per cent of the Dh27 billion collected in VAT revenues. Given that more than one year elapsed since VAT’s introduction, it is time to discuss its impact and what can be improved moving forward.

    New shisha tobacco, e-cigarettes tax rule announced in UAE

    date: 20190710

    External URL: https://www.khaleejtimes.com/business/vat-in-uae/new-shisha-tobacco-e-cigarettes-tax-rule-from-november-1

    His Highness Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and Minister of Finance, and Chairman of the Federal Tax Authority, FTA, has issued a Decision whereby the “Marking Tobacco and Tobacco Products Scheme” will be implemented on water pipe tobacco and electrically heated cigarettes as of November 1, 2019.

    The decision also determines the dates when “Digital Tax Stamps” will be made available, as well as the standards for stockpiling them.

    The authority has explained that the scheme facilitates inspections at local markets and customs ports to prevent the sale of contraband products and goods where the tax liability was not paid, and combat commercial fraud. Digital Tax Stamps will be placed on packages of tobacco products and registered in the FTA database.

    The stamps store digital information that can be read with a special device to verify that all taxes due on the said products have been paid.

     

    How do I charge VAT for items that are not sold yet?

    date: 20190709

    External URL: https://www.thenational.ae/business/money/how-do-i-charge-vat-for-items-that-are-not-sold-yet-1.884236

    My business supplies sportswear and accessories, with one of our sales channels on a sale or return basis to gyms and yoga studios. We recently registered with the FTA [Federal Tax Authority] and want to know how to account for VAT on items not paid for by my clients until they are ultimately sold to their customer. It seems unfair to raise a tax invoice and demand immediate payment when I send stock to the gym, even though they will not pay for the goods until months later or possibly return the items and not pay at all. LL, Abu Dhabi

    The sales model you describe is typically known as consignment, sale on approval, or sale or return. Under this arrangement the supplier will provide products to the buyer but the buyer is not obliged to pay until he has sold them to his customer, or he agrees to take ownership of them from the supplier.

    Typically if the items remain unsold, the customer can return them to the supplier without payment. Customers like this arrangement because all the risk stays with the supplier. However, this type of sale creates some confusion from an accounting and VAT perspective.

    Because the customer does not take legal ownership of the products until they are sold on, account for them as your stock until the final sale happens, even though they are not physically in your possession.

    Shipping and logistics VAT guide released

    date: 20190707

    External URL: https://www.khaleejtimes.com/business/local/shipping-and-logistics-vat-guide-released

    WTS Dhruva Consultants has published a comprehensive guide on ‘VAT implications on the shipping and logistics sector’ for companies engaged in the business. This is its second publication, the first being on the UAE healthcare.

    The guide covers a wide range of topics across various service lines and will be a relevant tool to a wide cross-section of organisations within the sector, as it highlights the VAT implications on transportation, supply/leasing of vessels, warehouses, and courier agencies’ activities.

    Dinesh Kanabar, CEO and founder of WTS Dhruva Consultants, says that “a majority of tax jurisdictions apply for exemptions and/or zero-ratings to the inbound and outbound transportation of goods, whereas the transportation of goods locally attracts taxes. In the UAE, inbound and outbound transportation is zero-rated, while the transport of goods locally is subject to VAT at five per cent.”

    The guide has deliberated on whether local transportation can be treated as zero-rated if the same is linked to the international movement. It also addresses the VAT treatment on different reimbursable expenses incurred at the port by the shipping lines, freight forwarders, agents, etc.

    Daily cash limit for VAT refunds set at AED7,000

    date: 20190710

    Organized By: Rasha Abubaker

    External URL: http://wam.ae/en/details/1395302772660

    H.H. Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and Minister of Finance and Chairman of the Federal Tax Authority (FTA), has issued FTA Decision No. (1) of 2019, setting a daily maximum of AED7,000 for cash refunds of Value Added Tax (VAT) for tourists applying through the Tax Refunds for Tourists Scheme.

    In a press statement issued today, the FTA asserted that the Tax Refunds for Tourists Scheme, which entered into effect in November 2018, is characterised by its efficiency, seamless procedures, speed, and accuracy in processing applications.

    FTA Director-General Khalid Ali Al Bustani said: “The new decision regarding the maximum daily amount a tourist can reclaim in cash is in line with the UAE’s overall strategy to reduce reliance on cash in financial transactions, and benefit from the country’s advanced digital and technological infrastructure. These systems are key components in driving the continuous development of the UAE’s financial and economic sectors; they facilitate the flow of money and financial assets securely, increasing trust in financial transactions – both local and international.”

    “The Federal Tax Authority is committed to implementing the highest international standards across all its activities and services, in line with the directives of the UAE’s wise leadership to make the UAE one of the best countries in the world by 2021,” he added. “We are committed to maintaining the UAE’s competitiveness as the only Arab economy that is based on innovation and creativity. The new decision abides by best practices implemented in advanced economies, which prioritise effective and holistic risk management and promote e-payment solutions.”

    Do not fall for this VAT refund scam

    date: 20190709

    Organized By: Mazhar Farooqui

    External URL: https://gulfnews.com/uae/crime/uae-bank-warning-do-not-fall-for-this-vat-refund-scam-1.65084300

    If you have got a purported email from Mashreq Bank asking you to seek value added tax (VAT) refunds by submitting your bank details, banish the thought. It’s a phishing scam!

    Of late, several Mashreq Bank customers have got a dodgy email saying they are eligible to receive over Dh10,000 in VAT refunds based on ‘last audit calculations of their fiscal activity”.

    Customers are then instructed to enter their credit card details, compete with CVV numbers and expiry dates in an accompanying form and send it back by email.

    Federal Tax Authority launches new website

    date: 20190703

    External URL: https://www.thenational.ae/business/technology/federal-tax-authority-launches-new-website-1.881848

    The UAE Federal Tax Authority (FTA) launched its upgraded website with a bundle of services and amenities for users, also enabling them to submit forms online.

    “The Federal Tax Authority has designed its new website in accordance with international best practices,” said FTA director general Khalid Ali Al Bustani

    “The site plays a fundamental role as the main platform of the Federal Tax Authority in order to keep pace with the rapid technological development in this area. It has been configured to provide the best services for business, facilitate optimum access to customers and employs the latest technologies to enhance interaction between the authority and the various business sectors around the clock.

    “All forms have been automated to ensure the validity of the data submitted to the authority and thus help speed-up the authority’s response to taxpayers’ requests. The site also provides a comprehensive tax library for all guides, e-learning programs, videos and simplified graphics.”

    Mr Al Bustani said he hoped the website would contribute to improving the electronic experience of taxpayers and that it would enhance user interaction.

    VATP012 - Importation of goods by agents

    date: 20190702

    External URL: http://www.allaboutvat.com/wp-content/uploads/VATP012-Importation-of-goods-by-agents.pdf

    New clarification VAT P012 on import of goods by agents or customer of owner of goods.

    Agent/customer can reverse in box 7, the pre-populated import in box 6.

    Also, the owner of goods has to pass positive adjustment in box 7.

    There needs to be an agreement in place between the agent/customer and the owner of goods.

    Alternate arrangement still available where the agent gives a statement and recovers the VAT from owner of goods. However, he will not claim RCM credit in box 10.

    Dubai biggest beneficiary of VAT revenue

    date: 20190701

    Organized By: Waheed Abbas

    External URL: https://www.khaleejtimes.com/business/vat-in-uae/dubai-biggest-beneficiary-of-vat-revenue-12

    Dubai was the largest beneficiary among the seven emirates in value-added tax (VAT) collection last year, receiving 42 per cent or Dh11.34 billion of the Dh27 billion total, Moody’s Investors Service said.

    Data from the global ratings agency showed that the federal government will retain 30 per cent, or Dh8.1 billion, of the collected revenues while the remaining Dh18.9 billion, or 70 per cent, will be divided among the emirates.

    After Dubai and the federal government, Abu Dhabi will receive 18 per cent (Dh4.85 billion). Sharjah will get 6 per cent (Dh1.61 billion) and the Northern Emirates will receive 4 per cent (Dh1.1 billion).

    The UAE levied 5 per cent VAT on selected goods and services from January 1, 2018, in order to boost revenues and diversify economy away from hydrocarbon dependence. The Federal Tax Authority collected Dh27 billion in VAT revenues in 2018, surpassing its 2018 target of Dh12 billion and even the 2019 target of Dh20 billion.

    Thaddeus Best, analyst at Moody’s Investors Service, said the UAE surpassing its 2018 VAT collection target by 125 per cent is credit-positive for the country.

    Emirates NBD offers VAT-based loan solution to SMEs

    date: 20190703

    Organized By: PRIYA WADHWA

    External URL: https://www.sme10x.com/finance/emirates-nbd-offers-vat-based-loan-solution-to-smes

    It’s just been one year since the introduction of VAT in the UAE and while there have been many learnings, many SMEs have also faced a range of challenges. To cater to the market’s needs, Emirates NBD, Dubai’s largest bank, has launched a new VAT-based loan solution for SME customers.

    The new programme makes the lending application process easy for SMEs. They can now get their business turnover and income validated by simply providing copies of the VAT returns filed with the UAE’s Federal Tax Authority. To begin with, home, auto and business loan products will be offered.

    This programme also addresses one of the biggest challenges faced by SMEs in the region: getting bank loans. Bank lending remains the lowest in the region at 5%, and understandably so as banks face loss rates as high as 20%, as revealed by Mashreq Bank.

    UAE VAT collection exceeds expectations

    date: 20190701

    External URL: https://www.sme10x.com/10x-industry/uae-vat-collection-exceeds-expectations

    In its first step to reduce dependency on oil revenues, UAE introduced the 5% Value Added Tax (VAT), implemented since the 1st of January 2018.

    According to Moody’s report, UAE’s collection of tax has far exceeded original estimates.

    As per government data, VAT collections totalled AED 27 billion ($7.4 billion) in 2018, compared to an anticipated AED 12 billion ($3.3 billion). This amount was also higher than the government’s projection of AED 20 billion ($5.5 billion) in 2019.

    Of the total VAT collection, UAE’s federal government will retain 30 percent (AED 8.1 billion) while the remaining AED 18.9 billion will be divided amongst the country’s seven emirates.

    According to the report, Dubai was the largest beneficiary of VAT, receiving approximately 60% share of the revenue attributed to the emirates and 42% of total revenue.

    44% of UAE SMEs still unaware of automated VAT solutions

    date: 20190621

    Organized By: Waheed Abbas

    External URL: https://www.khaleejtimes.com/44-of-uae-smes-still-unaware-of-automated-vat-solutions

    It has been more than 17 months since the UAE introduced the value added tax (VAT) but 44 per cent of small and medium-sized enterprises (SMEs) still perform their daily tasks manually for VAT records and filing returns as they are unaware of automated solutions, revealed a survey conducted by Tally Solution.

    Vikas Panchal, business head for the Middle East at Tally Solutions, said that such a low level of awareness is due to a prevailing perception in the market that VAT-compliant business management software is for larger companies only.

    “As a result, investment in such a software programme is relegated in the backseat, not knowing that giving it a priority is the key to ensuring correct VAT compliance. This is further compounded by limited understanding of VAT, resistant to change, and budget constraint,” said Panchal.

    SMEs should consider it as an investment rather than expenses because committing mistakes while filing VAT returns can result in fines and penalties, he added.

    The survey covered over 200 small and medium-sized businesses in the UAE.

    High VAT revenues fortify UAE government finances

    date: 20190625

    Organized By: Babu Das Augustine

    External URL: https://gulfnews.com/business/high-vat-revenues-fortify-uae-government-finances--moodys-1.64834236

    The UAE’s value added tax (VAT) collections in the first year exceeded the original estimates and is driven by strong tax compliance, according to credit rating agency Moody’s.

    “The government’s 2018 and 2019 VAT revenue forecasts had included conservative assumptions regarding the level of compliance in the initial years of implementation. Nonetheless, the robust level of compliance in the first year of the tax framework is a positive reinforcement of the UAE’s high institutional strength,” Thaddeus Best, an analyst at Moody’s wrote in a report.

    Moody’s which rates the UAE at Aa2 stable believes that the stronger than expected tax revenues is credit positive for the country.
    VAT collection data released by the government showed collections were far higher than expected, reaching Dh27 billion ($7.4 billion) in 2018 compared to the government’s original projection of Dh12 billion ($3.3 billion), and higher even than the government’s 2019 projection of Dh20 billion ($5.5 billion).

    According to Moody’s report, the federal government will retain Dh8.1 billion (30 per cent of collected revenues) while the remaining Dh8.9 billion will be divided among the emirates.

    FTA approves 390 requests to refund housing tax worth AED17.52 million: FTA Director-General

    date: 20190626

    Organized By: Rola Alghoul/Nour Salman

    External URL: http://wam.ae/en/details/1395302770434

    Khalid Ali Al Bustani, Director-General of the Federal Tax Authority, FTA, revealed that the FTA approved 390 requests to refund housing tax worth AED17.52 million, in implementation of the vision of the UAE’s leadership to create a modern housing system for UAE citizens and provide them with the best living standards.

    In statements to the Emirates News Agency, WAM, Al Bustani revealed that the number of registrations in the VAT system exceeded 300,000 while the number of registrations in the excise tax system totalled around 724.

    The FTA also highlighted the positive outcomes of partnerships agreements signed with relevant authorities and noted their key contributions to the successful adoption of the tax system while stressing that the e-connectivity systems used jointly by the FTA, the Federal Customs Authority and the local customs departments have ensured the easy adoption of the tax system while the e-connectivity system used jointly by the Ministry of Finance and the UAE Central Bank have facilitated the payment of due taxes.

    The UAE Central Bank’s “UAEFTS” system is the country’s main tax refund system, includes several payment options, and offers tax payment services in 77 bank branches, exchange offices and financial companies through their “GIBAN” reference. Payments can also be made through the “e-AED” platform.

    The FTA also began implementing a VAT refund option for visiting foreign businesses” in April, and launched 60 manuals on VAT and excise tax, as well as e-learning programmes, short awareness films and over 50 flyers.

    The Authority noted that it provided 266 workshops for instructions related to taxation in the business sector. It also organised 95 seminars attended by 30,000 specialists from various business sectors.

     

    Will VAT rate go up in GCC?

    date: 20190617

    Organized By: Waheed Abbas

    External URL: https://www.khaleejtimes.com/will-vat-rate-go-up-in-gcc

    The GCC states will eventually increase value-added tax (VAT) rate, which is one of the lowest in the world, but it could take years before the regional government agree to hike it, tax experts said at a summit on Monday.

    Surandar Jesrani, managing partner and chief executive officer (CEO) of MMJS Tax Consultancy, said the UAE and Saudi Arabia cannot unilaterally raise VAT as it is GCC-wide framework agreed among all the six member nations.

    “The International Monetary Fund (IMF) is a driving factor as the whole GCC VAT is an IMF initiative. The GCC could increase VAT rate but we don’t know when. But it cannot be unilateral,” he said.

    The IMF recently recommended that five per cent VAT levied in Saudi Arabia and the UAE as part of a GCC-wide framework should be raised, saying it is low by global standards. “The region really needs to understand when it is right time for the increase. Considering current economic situation, five per cent is fair now. However, there could be an increase,” Jesrani said.

     

    Abu Dhabi looks at attracting MICE with new VAT waiver

    date: 20190614

    Organized By: Megha Paul

    External URL: https://www.traveldailymedia.com/abu-dhabi-looks-at-attracting-mice-with-new-vat-waiver/

    Abu Dhabi National Exhibitions Company (ADNEC) announced it has obtained the Free Trade Agreement (FTA) License for waiver from Value Added Tax (VAT) for all international companies and organisations participating in or holding shows and conferences at its venues across the UAE with effect from 1 June.

    The VAT waiver covers exhibitions and conferences held over a period not exceeding seven days. The waiver also stipulates that recipients shall not have a permanent base or established business in the UAE and shall not be registered or obliged to register in UAE as per the UAE VAT Law.

    Speaking about the development, Humaid Matar Al Dhaheri, group CEO, ADNEC, said, “The VAT waiver for ADNEC-hosted event organisers and participants will further stimulate the business tourism sector in the UAE through enhancing the competitiveness of our venues to host major international exhibitions and conferences. This move supports our strategy to attract new and world-renowned events to our venues and increase our direct and indirect contributions to the Abu Dhabi economy.”

    The business tourism sector is a major contributor identified by Plan Abu Dhabi and Abu Dhabi Economic Vision 2030 to accelerate non-oil GDP growth. Through hosting more than 3,390 events and welcoming nearly 17.5 million visitors to date, the venues – Abu Dhabi National Exhibitions Centre and Al Ain Convention Centre – have delivered a direct and indirect economic impact of more than AED32 billion since ADNEC’s inception in 2005, he added.

    VAT Administrative Exceptions User Guide

    date: 20190620

    External URL: http://www.allaboutvat.com/wp-content/uploads/VAT-Administrative-Exceptions-Form-Final.pdf

    FTA has introduced the VAT Administrative exception formality where taxable persons can seek concessions /exceptions as per VAT laws for the following categories:

    Tax Invoices – Exceptions for raising tax invoice or not mentioning particulars required.

    Tax Credit Notes – Exceptions for not raising tax credit notes or not mentioning particulars required.

    Length of Tax Period – Tax Period Change to Monthly, Quarterly or Half yearly.

    Stagger of Tax Period – Staggering of tax period to end with the month requested by tax payer.

    Extension of time for exports – Extension for physical export of goods beyond 90 days.

    FTA may take 40 business days on Decision for Tax Invoice, Credit Notes, Tax Period Length or Staggering of Tax Period.

    FTA may take upto 20 business days for Decision on export of goods extension.

    VAT-Administrative-Exceptions-Form

    No VAT for international companies holding shows at ADNEC

    date: 20190613

    Organized By: MOHD AAMIR

    External URL: http://wam.ae/en/details/1395302767635

    Abu Dhabi National Exhibitions Company, ADNEC, today announced that it has obtained the Federal Tax Authority, FTA, License for waiver from Value Added Tax, VAT, for all international companies and organisations participating in or holding shows and conferences at its venues across the UAE with effect from 1st June, 2019.

    The VAT waiver covers exhibitions and conferences held over a period not exceeding seven days. The waiver also stipulates that recipients shall not have a permanent base or established business in UAE and shall not be registered or obliged to register in UAE as per the UAE VAT Law.

    Speaking on the announcement, Humaid Matar Al Dhaheri, Group CEO of ADNEC, said, “The VAT waiver for ADNEC-hosted event organisers and participants will further stimulate the business tourism sector in the UAE through enhancing the competitiveness of our venues to host major international exhibitions and conferences. This move supports our strategy to attract new and world-renowned events to our venues and increase our direct and indirect contributions to the Abu Dhabi economy.”

    “The business tourism sector is a major contributor identified by Plan Abu Dhabi and Abu Dhabi Economic Vision 2030 to accelerate non-oil GDP growth. Through hosting more than 3,390 events and welcoming nearly 17.5 million visitors to date, our venues – Abu Dhabi National Exhibitions Centre and Al Ain Convention Centre – have delivered a direct and indirect economic impact of more than AED32 billion since ADNEC’s inception in 2005,” he concluded.

    Top 5 positive changes in GCC, thanks to VAT

    date: 20190609

    Organized By: Vikas Panchal

    External URL: https://www.khaleejtimes.com/business/vat-in-uae/top-5-positive-changes-in-gcc-thanks-to-vat

    Following the signing of the Common VAT Agreement by GCC member states, value-added tax (VAT) has become an important step towards ensuring the region’s socio-economic resilience. The new tax regime is a proactive policy meant to diversify the GCC economy, bringing fundamental positive changes to the region. Below are some of these transformative effects felt just more than a year after the system’s implementation.

    Increased transparency and accountability

    VAT is simpler to implement compared to other indirect taxes. It is also more transparent because the system entails that it be levied at each stage of the supply chain. Indeed, higher transparency and accountability levels are among the benefits of introducing VAT to the regional market.

    Companies required to register for VAT purposes contributes to the transparency level by enabling concerned government authorities to track businesses and monitor effectively their compliance. This provision also leads to the creation of a reliable and updated database, thereby aiding the governments in their respective economic performance assessments.

    Businesses are critical to collecting VAT from consumers. While before they have limited reporting requirements, companies are now required to maintain all necessary records such as tax invoices and make timely report to the government. To comply with their duties under the VAT tax regime, it is imperative, therefore, that they make sure that their relevant processes and transactions are compliant with the provisions of the law.

    Tourists to recover VAT through self-service kiosks

    date: 20190611

    Organized By: MOHD AAMIR

    External URL: http://wam.ae/en/details/1395302767219

    Self-service kiosks have been set up across all the ports included in the Tax Refunds for Tourists Scheme in order to allow tourists to recover Value Added Tax, VAT, when leaving the UAE.

    The kiosks are operated by Planet, the company enlisted by the Federal Tax Authority, FTA, to operate the system for the Tax Refunds for Tourists Scheme.

    “The kiosks are significant as tourists can recover VAT without the need to interact with employees,” said Khalid Al Bustani, FTA Director-General. “The kiosks are placed at all exit ports included in the Tax Refund Scheme for Tourists, where tourists can submit the tax invoices on their purchases, along with their passport and credit card, to recover VAT. No limit is placed on the maximum amount that can be recovered if the said amount is transferred to the tourist’s credit card. However, in the event that the applicant requests a cash refund, then the maximum amount is set at AED10,000 per day.”

    “The new service reflects our commitment to continuously upgrade our services,” he added. “Our periodic follow-ups have revealed a sustained increase in customer happiness with the Tax Refunds for Tourists Scheme, launched in November 2018 in collaboration with system operator Planet. This is part of the government’s plan to establish a legislative, executive, and technological ecosystem that would galvanise the tourism sector – one of the major contributors to national GDP, whereby the UAE has become a major destination for tourists and visitors, offering safety, hospitality, and world-class services.”

    The new system consists of integrated mechanisms to connect retail stores registered with the authority and those wishing to register for the Tax Refunds for Tourists Scheme, linking them to the UAE’s ports of entry. This, in turn, allows tourists to apply for tax refunds on their purchases through the system, which operates on the latest technology, if they are eligible to recover VAT as per the terms and criteria specified in Cabinet Decision No. (41) and FTA Decisions No. (1) and (2) of 2018.

    The FTA had outlined several conditions for a tourist to be eligible for a tax refund, such as the tourist must be at least 18 years old; must meet the criteria specified in Cabinet Decision No. (52) of 2018 regarding the Executive Regulations of Federal Decree-Law No. (8) of 2017 on VAT, and must exit the UAE along with the purchased items within 90 days.

    Sugar Sweetened Beverage – Excise update

    date: 20190601

    Saudi’s General Authority for Zakat and Tax (Gazt) said it approved amendments to existing regulations on May 15, 2019. According to the guidance published in the official gazette, a 100 per cent tax will be enforced on e-cigarettes and its accompanying tools, and a 50 per cent tax on soft and sugary drinks.

    The UAE imposed excise duty on certain items at the end of 2017 and is now considering the inclusion of more products on its excise tax list, according to a statement by the Ministry of Finance in April 2019.

    Considering the probability of implementation of Excise on Sugar Sweetened Beverages, entities involved in the manufacturing, distribution and selling of these products should evaluate the impact of potential excise levy on their business model and operations.

    UAE's VAT collections exceeds expectations by a wide margin in 2018

    date: 20190603

    Organized By: Waheed Abbas

    External URL: https://www.khaleejtimes.com/business/vat-in-uae/uaes-vat-collection-exceeds-expectations

    UAE residents paid Dh27 billion in value-added tax (VAT) last year, surpassing the government’s target of collecting of Dh12 billion, an increase of 125 per cent. It even surpassed the goal of Dh20 billion VAT revenue collections for 2019.

    The total VAT collection was also close to the UAE’s nine-month of surplus, which stood at Dh28 billion during the January-September 2018 period.

    Analysts expect that VAT revenues will further increase in 2019 as companies analyse their incomes, expenses and IT systems to ensure that correct VAT has been paid. This, in turn, will help the government to increase its spending on the infrastructure and public welfare programmes.

    UAE Cabinet approves VAT revenues distribution between federal and local governments

    date: 20190530

    Organized By: MOHD AAMIR

    External URL: http://wam.ae/en/details/1395302765668

    The UAE Cabinet has approved distribution of the value-added tax (VAT) revenues totalled approximately AED27 billion between the federal and local government.

    According to the decision 30 percent of the revenue will go to the federal government, and 70 percent to the local governments.

    The decision ensures the sustainability and the quality of government services. It also contributes to the development of economic and social projects and public services.

    The VAT was introduced in the UAE on 1st January 2018. The rate of VAT is 5 percent. VAT provides the UAE with a new source of income which will be continued to be utilised to provide high-quality public services.

    FTA urges tax agents to comply with standards

    date: 20190528

    External URL: https://www.gulftoday.ae/business/2019/05/28/fta-urges-tax-agents-to-comply-with-standards

    The Federal Tax Authority, FTA, has called on tax agents to comply with the five ‘Professional Standards for Tax Agents’, published in a new guide on the subject, in all of their transactions to ensure uninterrupted activity.

    The new guide was issued through the FTA’s official website, offering a detailed explanation of the standards and conditions required for practising the profession of tax agent in the UAE.

    In the new guide, the FTA offered a detailed explanation of the five professional standards that should be met by tax agents, noting that a system has been put in place to track and ensure compliance with these standards.

    The system relies on three methods, first of which is reviewing the timeliness and accuracy of the taxable persons’ returns if they have appointed a tax agent. The second approach is monitoring requests for clarifications and other correspondence with the FTA sent by tax agents, to ensure that their professional and technical knowledge meets the level expected of them under the outlined professional standards. The FTA has accredited 357 tax agents who meet the technical standards, conditions and qualifications required, and who have passed the exams set by the Authority.

    Shoppers can also enjoy VAT-free shopping at one of the malls.

    date: 20190530

    Organized By: Web Report

    External URL: https://www.khaleejtimes.com/ramadan-2019/24-hour-mega-sale-for-eid-al-fitr-at-malls-in-uae

    24-hour mega sale for Eid Al Fitr at malls in UAE

    Shopping malls in Abu Dhabi has announced a 24-hour mega sale during Eid Al Fitr holidays.

    For the third year running, Yas Mall is offering visitors big savings and even receive VAT back on purchases of Dh1,000 or above.

    Also read: 15-day Ramadan sale in Dubai; free parking, entry

    Running straight through from 10am on June 5, 2019, to 10am the following day, shoppers visiting Yas Mall during the 24-hour extravaganza will enjoy incredible exclusive offers and discounts, as well as tax-free shopping.

    Also read: Dubai Duty Free announces Eid sale

    For all purchases of Dh1,000 or more, shoppers will receive a Yas Mall gift card loaded with their VAT amount. This exclusive offer will only be available during the 24-hour event.

    Shoppers can also win instant prizes from mystery boxes and a triple grand prize give away as part of the sale event.

    Starting at 10am, Dalma Mall in Abu Dhabi will  be open for 24 hours and offer a Mega Sale from June 5 to June 6, 2019.

    The mall will be celebrating four days of mesmerizing Eid festivities starting with the 1st day of Eid Al Fitr.

    Dubai airport clerk stole Dh70,000 in VAT refunds

    date: 20190524

    Organized By: Ali Al Shouk

    External URL: https://gulfnews.com/uae/crime/dubai-airport-clerk-stole-dh70000-in-vat-refunds-1.64162581

     A tax refund company employee went on trial accused of stealing Dh70,000 this week.

    The 34-year-old Filipino forged electronic documents on his company’s system, which refunds value added tax (VAT) to travellers at Dubai International Airport. He then deposited the money onto credit cards for his own benefit.

    The accused’s duty was to receive travellers refund documents and use the username and password in the company system to refund money to travellers.

    However, the director of the tax refund company noticed two credit card numbers repeatedly appeared in tax refund transactions for different travellers.

    “Some travellers who applied for cash refunds were in a hurry to catch their flights,” said the company director. “The defendant changed their refund transactions from cash to credit card payments and put the refund amount for his benefit onto two credit cards.”

    FTA applies penalties for digital tax evasion on cigarettes

    date: 20190525

    Organized By: Nada El Sawy

    External URL: https://www.thenational.ae/business/economy/fta-applies-penalties-for-digital-tax-evasion-on-cigarettes-1.866135

    Penalties for not implementing the new digital tax stamp scheme on tobacco products include fines of Dh20,000 to more than Dh50,000, the Federal Tax Authority said on Saturday.

    A ban on the import of any type of cigarettes into the UAE not bearing the digital tax stamps came into effect on May 1. The sale, importation or production of tobacco products not bearing the digital tax marks will be prohibited in the UAE as of August.

    The penalties have been set “in an effort to protect consumers, prevent contraband, low-quality products from entering local markets, and halt sales of smuggled goods in the UAE,” the FTA said in a statement.

    Saudi imposes tax on e-cigarettes and sugary drinks

    date: 20190520

    Organized By: Reuters

    External URL: https://gulfbusiness.com/saudi-imposes-tax-on-e-cigarettes-and-sugary-drinks/

    Saudi Arabia has imposed a special tax on electronic cigarettes and sugary drinks, extending similar taxes introduced in 2017 as it seeks to reduce a budget deficit caused by low oil prices.

    The General Authority of Zakat and Tax said a 100 per cent tax would be levied on electronic cigarettes and products used in them, and a 50 per cent tax on sugared drinks.

    Saudi Arabia, the Arab world’s largest economy, already had a 100 per cent tax on cigarettes and tobacco products, a 100 per cent tax on energy drinks and a 50 per cent one on fizzy drinks.

    The authority took the decision on May 15 and it became effective from Saturday after publication in the official gazette.

    The taxes fall under the category of selective taxes on products deemed harmful to public health.

    Saudi Arabia, the world’s top oil exporter, introduced a 5 per cent value-added tax (VAT) in January 2018 to improve non-oil revenue generation after a plunge in oil prices from mid-2014 bruised its revenues.

    The IMF last week said the VAT introduction had been successful, but that the Saudi government should consider raising the rate, which is low by global standards.

    IMF urges Saudi Arabia to mull VAT rate increase

    date: 20190515

    Organized By: Sam Bridge

    External URL: https://www.arabianbusiness.com/politics-economics/420060-imf-urges-saudi-arabia-to-mull-vat-rate-increase

    Economic reforms in Saudi Arabia have started to yield positive results, with non-oil growth picking up and female labour force participation and employment increasing, according to the International Monetary Fund (IMF).

    The IMF hailed the successful introduction of value-added tax, saying it has underpinned an increase in non-oil fiscal revenues.

    It added that consideration should be given to raising the rate from 5 percent, which is low by global standards, in consultation with other GCC countries.

    Consulting VAT Expert before VAT Submissions to Avoid Penalties

    date: 20190511

    External URL: https://t2conline.com/consulting-vat-expert-before-vat-submissions-to-avoid-penalties/

    Ignorance is bliss but not in the case of VAT. The VAT is a very crucial matter in UAE and it should thus be dealt with carefully. Being careless about it may make a lot of hurdles for the companies based in UAE.

    Businesses who fail to comply with the rules and regulations of VAT may have to face serious penalties. These penalties may harm the business as well as the reputation of the businessman in the market. that is why it is important for the companies to get help from the VAT consultants in UAE.

    The VAT experts are preferred because they have a better understanding of the proceedings of the VAT. They know the right procedure to follow for UAE VAT registration. That is why they are a very good option to consider by the companies for their compliance with the VAT laws in UAE

    No matter where you live if tax laws have been implemented on you, you must comply with them, or else you will have to pay heavy penalties.

    UAE residents confident about state of their finances, impact of VAT falling

    date: 20190507

    Organized By: Shane McGinley

    External URL: https://www.arabianbusiness.com/politics-economics/419468-uae-residents-confident-about-state-of-their-finances-impact-of-vat-falling-survey

    Residents in the United Arab Emirates continue to be upbeat about the state of their finances, while fewer and fewer report they are seeing any impact from the introduction of value-added tax (VAT) on goods and services since last year, according to a new survey released on Tuesday.

    The Consumer Confidence Tracker Q1 2019 from financial website yallacompare surveyed around 1,000 UAE residents on the state of their finances and attitudes towards work.

    The results found that 21 percent of respondents feel more confident about their finances than they did 12 months ago, compared to 22 percent in Q4 last year and 14 percent in Q3 2018.

    IMF suggests hiking VAT; commends Saudi reforms

    date: 20190516

    Organized By: waheedabbas

    External URL: https://www.khaleejtimes.com/imf-suggests-hiking-vat-commends-saudi-reforms

    The International Monetary Fund has recommended that the 5 per cent value-added tax (VAT) levied in Saudi Arabia and the UAE as part of a GCC-wide framework should be raised, saying it is low by global standards.

    The IMF suggested in a country note on the kingdom released late on Wednesday that the decision should be taken following consultations with GCC countries.

    “The introduction of VAT has been very successful, and consideration should be given to raising the rate from 5 per cent, which is low by global standards, in consultation with other GCC countries,” it said in the note.

    The UAE and Saudi Arabia levied 5 per cent VAT on a host of goods and services from January 1, 2018, in order to bolster the revenues of the Gulf governments as part of diversification initiatives. Other Gulf countries will levy VAT at a later stage. Currently, it is one of the lowest in the world.

    UAE says processing over 8,000 VAT refunds per day

    date: 20190516

    Organized By: Shane McGinley

    External URL: https://www.arabianbusiness.com/banking-finance/420095-uae-processing-over-8000-vat-refunds-per-day-tax-authority

    The United Arab Emirates Federal Tax Authority (FTA) processes around 8,110 refunds per day on value added-tax (VAT) paid on goods and services bought in the country, it was announced on Wednesday.

    The UAE, along with Saudi Arabia, introduced VAT on January 1, 2018, as part of the region’s bid to diversify its revenue streams away from hydrocarbons. Last year, the FTA announced that the Tax Refunds for Tourists schemes, which allows tourists to claim a refund on VAT paid on goods bought during their visit, will be rolled out to all UAE airports and ports and to around more than 4,500 retailers across the country.

    In a press statement issued by WAM, the state news agency, Khalid Ali Al Bustani, director-general of the FTA, said that as part of the authority’s efforts to manage and collect federal taxes, various tax refund mechanisms have been launched for legally eligible groups to recover VAT, including the Tax Refunds for Tourists schemes, of which nearly 8,110 transactions were processed on a daily basis.

    UAE marks 500 successful days of VAT

    date: 20190515

    Organized By: WAM/MOHD AAMIR

    External URL: http://wam.ae/en/details/1395302762871

    As the Federal Tax Authority, FTA, marks 500 days of the Value Added Tax, VAT, in the UAE, Khalid Ali Al Bustani, Director-General of the FTA, revealed that the rates of compliance with tax laws and procedures have increased exponentially among all taxable businesses.

    The tax came into effect on 1st January, 2018, at a rate of five percent on the supply of most goods and services.

    In a press statement issued by the authority, Al Bustani added, “Compliance was made possible through the seamless, flexible, and clear procedures the FTA has rolled out through electronic, fully paperless systems that are among the most advanced of their kind in the world, underpinned by a sophisticated legislative environment that meets the highest standards in the field.”

    “The FTA implemented an easy-to-use system for submitting tax returns and paying taxes via the e-Services portal, available 24/7 on the FTA’s official website,” he added.

    Al Bustani said that as part of the authority’s efforts to manage and collect federal taxes, various tax refund mechanisms have been launched for legally eligible groups to recover VAT, including the Tax Refunds for Tourists schemes, of which nearly 8,110 transactions were processed on a daily basis.

    VAT Financial Guarantee or Cash Deposit Release for Non Registered Importers User Guide VAT 702

    date: 20190501

    1. About this guide

    This guide is prepared to help non-registered importers to submit a request to liquidate partially or completely an eGuarantee or refund partially or completely an eDirham deposit provided while importing goods under tax suspension.

    2. About VAT 702

    VAT 702 is a form provided by the Federal Tax Authority (“FTA”) pursuant to which a nonregistered importer notifies the FTA to either cancel or liquidate an eGuarantee or to refund or collect an eDirham deposit. In line with the relevant legal provisions, there would be specific scenarios where a non-registered importer would provide an eGuarantee or an eDirham deposit to clear goods at customs, which are subject to tax and duty suspension. Upon export of the goods, the importer is eligible for a refund or a return of the financial guarantee.

    Read more..

    Introducing Digital Tax Stamps Scheme in the UAE

    date: 20190401

    Organized By: Press Release

    External URL: https://www.tax.gov.ae/pdf/DTS%20Newsletter_2_Plus_3_en.pdf

    IMPORTANT DATES 

    1st Jan 2019

    Importers will be able to order stamps to be sent to the Manufacturers for application to the pack of cigarette products

    1st May 2019

    No cigarette products without a digital tax stamp will be permitted to be imported into the UAE. Customs departments will undertake checks on
    products from this date and penalties for non-compliance may apply.

    1st August 2019

    No cigarettes will be allowed to be stored, held out for sale, imported or produced anywhere in the UAE unless they carry a Digital Tax Stamp with
    end-to-end traceability. Penalties for non-compliance with this rule may apply. It would therefore be advisable for businesses to consider this final deadline date into their supply chain planning to ensure all unmarked products have been sold prior to this time.

    Read more..

     

    Can I avoid a Dh22,000 penalty imposed by the FTA?

    date: 20190416

    Organized By: Lisa Martin

    External URL: https://www.thenational.ae/business/money/vat-q-a-can-i-avoid-a-dh22-000-penalty-imposed-by-the-fta-1.849235

    If you fail to file the return the FTA does not recognise any payments that you have made. Therefore you get fined not only a later filing fee but also interest on the amount of the tax due, until the point at which you file the return.

    The penalty for missing the filing deadline is Dh1,000 for the first offence and then Dh2,000 for every subsequent missed deadline.

    UAE considers adding more 'harmful' products to excise tax list

    date: 20190401

    Organized By: By Lubna Hamdan

    External URL: https://www.arabianbusiness.com/politics-economics/416809-uae-considers-adding-more-harmful-products-to-excise-tax-list

    The UAE is mulling the inclusion of new products on its excise tax list, according to a statement by the Ministry of Finance, which implemented the fee on three categories in October 2017.

    The ministry is conducting a joint study with officials in Saudi Arabia “on the addition of new goods to the selective tax list, as well as to determine tax rates on certain harmful substances,” its statement said.

    While it did not share details of the goods it is considering to add to the tax list, it said in 2017 that it aims to reduce the consumption of harmful substances.

    These include tobacco and tobacco products and carbonated and energy drinks, which are currently listed under the excise tax and have doubled in price since the fee’s introduction.

    UAE's FTA sees more businesses registering for taxes in 2019

    date: 20190331

    Organized By: Tahani Karrar

    External URL: https://www.thenational.ae/business/economy/uae-s-fta-sees-more-businesses-registering-for-taxes-in-2019-1.843517

    The number of UAE businesses registering for taxation in 2019 is set to grow from levels previously seen in 2018 as more companies become tax compliant, the head of the Federal Tax Authority said.

    The limited number of businesses and people that registered for taxation last year was due to a lack in compliance, Khalid Al Bustani said at the sidelines of the Arab Regional Tax Forum in Dubai on Sunday. However, he said the authority had conducted numerous awareness campaigns to limit the number of those penalised for non-compliance.

    The rise in the number of new businesses launched in the UAE will also result in an increase in the number of registrations this year, he added.

    “Regarding registration, this is a dynamic process because we have companies that are still reaching the compulsory threshold, when they reach that they need to register,” Mr Al Bustani said.

    The Emirates introduced a 5 per cent VAT in January last year, and in 2017, it rolled out an excise tax on fizzy and energy drinks and tobacco, to diversify income and create new revenue streams as part of a plan to lower dependence on oil revenues. The International Monetary Fund estimates the introduction of VAT in the Arabian Gulf region could generate between 1.5 to 3 per cent of non-oil GDP in new revenue.

    FTA board reviews developments of ongoing projects

    date: 20190326

    Organized By: WAM/Nour Salman/Tariq alfaham

    External URL: http://wam.ae/en/details/1395302750976

    The Board of Directors of the Federal Tax Authority, FTA, has issued a number of executive decisions concerning the Authority’s operations and administrative policies during its 8th meeting, chaired by H.H. Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, Minister of Finance, and FTA Chairman.

    During the meeting, held on Tuesday at the Ministry of Finance’s Dubai headquarters, the Board reviewed a report on the developments of ongoing projects and the FTA’s recent achievements. The report also covered results pertaining to its registration processes for VAT and excise tax and transactions related to filing tax returns, payment of outstanding taxes and collection of recoverable taxes.

    The report pointed out that the level of tax compliance in the country has increased, with the number of registrants for VAT exceeding 300,000 registered businesses – tax groups and individuals. Meanwhile, the number of registrants for excise tax reached 719, and the number of approved tax agents increased to 316.

    The report confirmed the success of the VAT Refund Procedures for UAE Nationals Building New Residences, with many citizens benefiting from the simple and straightforward electronic procedure that enables them to claim refunds on the taxes incurred on the construction of their new villas and apartments. The study noted that 235 applications were approved, enabling citizens to recover a total of AED9.76 million.

    Sheikh Hamdan bin Rashid commended the positive results and major strides the Authority has made since its inception. The FTA saw to the implementation of simple and clear cutting-edge electronic systems, leading to encouraging compliance levels from business sectors. This success was the result of streamlined procedures, an advanced legislative environment, and adherence to high international standards and best practices.

    Arab Regional Tax Forum opens in Dubai

    date: 20190331

    Organized By: WAM/Esraa Ismail/MOHD AAMIR

    External URL: http://wam.ae/en/details/1395302752099

    Arab Regional Tax Forum has discussed ways of balancing tax policies, Arab countries’ competitiveness in managing them, as well as the challenges facing these nations in pursuing their tax policies.

    The two-day forum which opened today at the Grand Hyatt Hotel in Dubai, is organised by the Ministry of Finance, MoF, and the Arab Monetary Fund, AMF, in cooperation with the Federal Tax Authority, FTA, and the International Tax and Investment Centre, ITIC.

    Dr. Abdulrahman Al Hamidy, Director-General of AMF; and Khalid Al Bustani, Director-General of the FTA attended the ceremony. Senior officials from the Ministry of Finance, top tax policy and administration officials from all AMF member states, senior tax and finance executives from multinational enterprises, tax experts from international organisations, and renowned public finance academics also attended the event.

    Dr. Abdulrahman Al Hamidy opened the forum with a welcome speech, following which Sir Mark Moody-Stuart, Honorary Co-Chairman of ITIC and the Director General of the FTA gave the keynote addresses.

    The FTA Director-General stressed the importance of holding meetings with senior officials and experts, especially in light of the great economic transformation the region is undergoing. He expressed hope that the Arab Regional Tax Forum will benefit all Arab countries through the discussions and knowledge-sharing on key issues.

    FTA begins process for refunding VAT to business visitors

    date: 20190402

    Organized By: WAM/ئ /MOHD AAMIR

    External URL: http://wam.ae/en/details/1395302752645

    The Federal Tax Authority, FTA, has begun implementing the Value Added Tax, VAT, refunds for business visitors while noting that a dedicated application form for the procedure is available on its website.

    In a press statement issued today, the FTA explained all the procedures with regard to the refund of VAT to business visitors. The FTA also published a guide through its website which can be accessed through the link: Guide – VAT Refunds for Business Visitors.

    Khalid Ali Al Bustani, FTA Director-General, said, “Reciprocity is a key condition for the procedure, whereby the authority will collaborate with countries that refund VAT for UAE businesses visiting their territories.

    “The procedure abides by Federal Decree-Law No. (8) of 2017 on VAT and its Executive Regulations, which call for refunding taxes on supplies or imports made by a person not residing in the UAE or any of the Implementing States, provided they meet the necessary conditions.”

    The FTA clarified that the period of each refund claim shall be a calendar year, noting that for claims in respect of the 2018 calendar year, it started accepting refund applications as of 1st April, 2019. However, in subsequent calendar years, the opening date for refund applications submission will be 1st March of the following year. That means for the period 1st January to 31st December, 2019, applications will be accepted as of 1st March, 2020.

    VAT refunds for pavilions at Expo 2020 Dubai

    date: 20190324

    Organized By: Waheed Abbas

    External URL: https://www.khaleejtimes.com/business/local/vat-refunds-for-pavilions-at-expo-2020-dubai

    Maximum 20% of pavilion space allowed for commercial activity to claim tax return.
    Countries and inter-government agencies will be able to claim value-added tax (VAT) refunds for the costs incurred for the developments of pavilions at Expo 2020 Dubai.
     According to a Cabinet decision posted on the Federal Tax Authority’s (FTA) website, the commercial space should be less than 20 per cent of the space to be entitled for the refund. The Expo 2020 Bureau will largely administer this process.

    Business visitors to UAE to get VAT refund

    date: 20190326

    Organized By: Issac John, Khaleej Times

    External URL: https://www.zawya.com/mena/en/economy/story/Business_visitors_to_UAE_to_get_VAT_refund-SNG_141039144/

    The Federal Tax Authority has completed preparations to launch the “VAT refunds for business visitors scheme” from April 2.

    The scheme aims to reciprocate the efforts made in countries that offer VAT refunds to visiting UAE businesses,” the FTA said in a statement.

    To be eligible for the VAT refund, the first condition is that foreign businesses must not have a place of establishment or fixed establishment in the UAE or in any of the VAT-implementing GCC states.

     

    Over 300,000 businesses now registered for VAT in the UAE

    date: 20190326

    Organized By: Sam Bridge

    External URL: https://www.arabianbusiness.com/banking-finance/416295-over-300000-businesses-now-registered-for-vat-in-the-uae

    More than 300,000 businesses have now registered for WAT in the UAE, according to the Federal Tax Authority (FTA).

    At a meeting chaired Sheikh Hamdan bin Rashid Al Maktoum, also Deputy Ruler of Dubai, it was also revealed that the number of approved tax agents operating in the UAE has increased to 316.

    It also confirmed the success of the VAT refund procedures for Emiratis building new homes, with 235 applications approved, enabling citizens to recover a total of AED9.76 million.

    Sheikh Hamdan commended the positive results, saying: “The Federal Tax Authority has developed comprehensive plans to encourage tax compliance, raise the registration rate among taxable businesses, and combat tax evasion.”

    The FTA also announced that the Tax Refunds for Tourists Scheme, which was introduced in November, was recording nearly 6,000 refund transactions per day.

    Businesses in UAE urged to conduct pre-audit checks of VAT returns for expected tax audits this year

    date: 20190327

    Organized By: MENAFN - Editorial

    External URL: https://menafn.com/1098309617/Businesses-in-UAE-urged-to-conduct-preaudit-checks-of-VAT-returns-for-expected-tax-audits-this-year

    Al Dhaheri Jones and Clark (ADJC) reminded companies anew of properly filing their value added tax (VAT) returns in anticipation of a possible tax audits by the Federal Tax Authority (FTA) this year. The Dubai-based consultancy firm, which is a registered tax agent in the UAE as approved by the FTA, warned that hefty penalties await tax violators in pursuant of Cabinet Resolution No. (40) of 2017 on Administrative Penalties for Violations of Tax Laws in the UAE. Since the implementation of VAT in the UAE at the start of 2018, the number of tax returns received from businesses registered for VAT purposes has exceeded 650,000 as per the report of the FTA.

    MCA is now a FTA approved Tax Agent

    date: 20190327

    MCA Management Consultants has qualified to represent clients to FTA in matters relating to VAT after earning the approval as a FTA accredited Tax Agent.

    MCA has met the stringent conditions specified by the Federal Tax Authorities to attain this approval. The conditions safeguard the interest of registered VAT entities and ensure that VAT computation, filing and audit is as per the guidelines contained in the various statutes of the VAT law in UAE.

    Could blockchain transform the GCC's VAT system?

    date: 20190320

    External URL: https://gulfbusiness.com/blockchain-transform-gccs-vat-system/

    With the introduction of VAT in the Middle East (UAE, Saudi in 2018 and Bahrain in 2019), the governments had a clean sheet to work with.

    From e-registration to manual e-filing, they’ve introduced a lot of technology in a very short amount of time. Companies also had to adapt very quickly and both parties are just beginning their journey of tax and revenue automation.

    While the GCC VAT system has just been born, other parts of the world have already traveled a long way in this automation path and there is no doubt these developments will come sooner rather than later in the region.

    Read more…

    VAT Refund for Expo 2020

    date: 20190321

    In accordance with the Cabinet Decision No. 1 of 2019 on the ‘Refund of Value Added
    Tax Paid on Goods and Services Connected with Expo 2020 Dubai’, Official Participants
    of the Expo 2020 are able to claim a refund of VAT incurred by them on the import or
    supply of certain Goods and Services.
    This document provides guidance for Official Participants of Expo 2020 in respect to the following:

    • The conditions which have to be met to be entitled to claim the VAT refund;
    • The process to be followed to claim VAT; and
    • Information required to complete the relevant forms.

    Additional details on the registration requirements along with the importing and customs
    details are covered in this user guide.

    Click here  to know more

    Cabinet Decision is primarily for Expo 2020 Official Participants

    date: 20190320

    This Cabinet Decision is primarily for Expo 2020 Official Participants which includes Countries and Inter Govt agencies. They can claim VAT refund in case they are not VAT registered. Condition is that commercial exhibition space is less than 20% and VAT refund value is more than Aed 200 per transaction. Expo 2020 Bureau will largely administer this process.

    Click here   to know more

    How to claim VAT refund for Tourist?

    date: 20190314

    External URL: https://www.planetpayment.com/en/countries/uae/#

    Tourist leaving the country can claim the VAT refund within 90 days from the date of purchase.

    You will receive 85% of the tax paid, minus a fee of 5 AED per Tax Free tag validated. Tax Free tags are stuck to every invoice that you obtain.

    There are two counters for claiming the refund. One in the checkin area and the other past immigration. The check-in area counter can process refunds of bills upto 8000 AED and can refund to your credit card directly. If you need cash, you can process the claim at this counter, but to obtain the refund in cash you must go past immigration and collect in US Dollars from Travelex counter.

    To claim for bills of value over 8000 AED you are expected to carry and show the item at the counter after immigration in the terminal. They will follow the similar method of directly crediting your card or collect cash from Travelex.

    You will not get the full VAT refunded as you are supposed to get only 85% refund, plus pay 5 AED for the tag placed on your bill and the exchange fee to convert to US dollars.

    Planet is the official agent for processing refunds and has counters in the check in area, and inside the airport.

    Read More

    Dubai Refreshment Co's 2018 profits drop 54% after VAT, excise tax

    date: 20190312

    Organized By: By Bernd Debusmann Jr

    External URL: https://www.arabianbusiness.com/retail/415206-dubai-refreshment-cos-2018-profits-drop-54-after-vat-excise-tax

    The implementation of value-added tax (VAT) and excise tax amounted to 60 percent of the Dubai Refreshment Company’s net local revenue and led to higher consumer prices, according to a statement to shareholders posted to the Dubai Financial Market.

    In the statement, Dubai Refreshment Company, which is the sole bottler and distributor for PepsiCo in the UAE, said that the company “was forced to pass these taxes to the consumer”.

    “This happened at a time when other sugary non-carbonated drinks were not subject to the excise tax and as such did not need to increase their prices,” the statement added.

     “The price increase on company products combined with favourable tax advantages for non-carbonated sugary drinks put DRC products at a significant competitive disadvantage which resulted in significant reduction in sales and profit.”

    In 2018, Dubai Refreshment Company’s net profit fell 54 percent to AED 42.3 million ($11.52 million). Revenues totalled AED 646 million ($175.87 million), a 26 percent decline when compared to the year before.

    “The situation was especially difficult in the first few months after the excise tax implementation, however, through a combination of sales improvement and cost reduction initiatives, the company has been able to stabilise the situation and return to reasonable profitability,” the statement said.

    Dubai Refreshments distributes carbonated, non-carbonated and bottled water products. Some of brands under Dubai Refreshments’ portfolio include Pepsi, Diet Pepsi, 7-Up, Diet 7-Up, Mountain Dew, Miranda, and Shani, Mountain Dew and Aquafina.

    UAE expects to reach deal with EU soon on tax-haven blacklist

    date: 20190313

    Organized By: Waheed Abbas/Dubai

    External URL: https://www.khaleejtimes.com/business/banking-finance/uae-expects-to-reach-deal-with-eu-soon-on-tax-haven-blacklist

    The UAE expects to reach an amicable solution with the European Union soon on the issue of including the emirate in the list of non-cooperative jurisdictions for tax purposes, said a senior UAE banking official.

    “I am sure this issue will be solved in the near future. I think it was due to lack of communication and lack of understanding. The EU will be approached and discussed; I’m sure there will be a way out,” said Abdul Aziz Al Ghurair, chairman of the UAE Banking Federation and CEO of Mashreq Group.

    “Because we have chosen to be international financial centre, so we have to comply with world regulations. We had issues like this in the past and were solved,” Al Ghurair told media on the sidelines of a banking conference in Dubai on Wednesday.

    The UAE on Wednesday regretted the European Union’s decision to include it on a list of non-cooperative jurisdictions for tax purposes. This inclusion was made despite the UAE’s close cooperation with the EU on this issue and ongoing efforts to fulfill all the EU’s requirements, Wam said in a statement.

    The UAE said it had shared with the EU a detailed timeline of actions that it is currently implementing in accordance with its sovereign legal process and constitutional requirements.

    Contractors want faster processing on VAT refunds

    date: 20190309

    Organized By: Manoj Nair, Associate Editor

    External URL: https://gulfnews.com/business/contractors-want-faster-processing-on-vat-refunds-1.62552671

    Dubai for UAE’s contractors, when they get VAT refunds is getting to be as important as the amounts involved.

    “As a main contractor, I will have to pay all the VAT-related costs to the subcontractor or supplier,” said K.A. Siddiqui, Partner at Dubai Walls Construction. “It automatically becomes part of the LPO (local purchase order). There can’t be any delay on our part because any delay will invite penalties and becomes a criminal offense.

    “The second I invoice something, I have to pay up … whether the client had paid me or not.”

    Which is why contractors are now insisting on clients and project promoters to, in turn, shorten the payment cycles in releasing funds due to them.

    What inflation? Cost of living set to decrease in UAE in 2019

    date: 20190310

    Organized By: Waheed Abbas/Dubai

    External URL: https://www.khaleejtimes.com/business/economy/what-inflation-uae-cost-of-living-set-to-decrease-in-2019-1

    Following a big jump in inflation in 2018 after the implementation of a 5 percent value-added tax, some economists believe that the UAE economy will slip into deflation this year following a persistent decline in housing and fuel prices and an oversupply in the retail and hospitality sectors.

    Monica Malik, chief economist at Abu Dhabi Commercial Bank, said the UAE consumer price index contracted by 2.4 percent on a year-on-year basis in January from a 0.4 percent rise in December.

    “We had expected to see deflation from January as the impact of the introduction of VAT in 2018 dropped out of the annual data and with the fall in housing and fuel prices,” she said.

    The UAE levied 5 percent VAT on a host of goods and services from January 1, 2018 as part of a GCC framework agreed among the Gulf nations, resulting in a spike in inflation in the first few months of the implementation.

    Food delivery? VAT compliance should be on the menu

    date: 20190218

    Organized By: Nimish Goel

    External URL: https://www.khaleejtimes.com/20190218/no-title

    Getting food at your doorstep using technology could have never been imagined until the tech giants like Uber, Zomato and more recently Talabat and Careem have made it possible. Simply using fingers on customer friendly apps, one can now conveniently anytime during the day order food that will be delivered to your office or home.

    Online food delivery apps typically work on the aggregator model where various restaurants are aggregated on the digital platform that allows customers to choose the restaurant and place the order. The order is passed to the restaurant that cooks the food and the app staff gets it delivered at the customer’s doorstep.

    The food delivery apps earn income from various sources – delivery fee charged from customers, a commission from restaurants, premium listing fee from restaurants to list them on the app and third-party ad revenue through Google ads. Each source of revenue needs a close look to ensure its appropriate taxability.

    The areas of attention for apps are more on identifying who’s the supplier of food & delivery and whether they are two separate supplies or one composite supply. Typically, the apps only act as pure delivery service providers obliged to account for VAT on the delivery fee. The VAT treatment may differ where food is simply picked up from the restaurant and delivered to the customer vis-à-vis where the app buys and store food packets to ensure faster delivery to the hungry customers during peak hours.

    In the first situation, delivery fee from customers and commission from restaurants are taxable supplies. In the second situation, the app will have to account for VAT on the supply of food and its delivery to customers but simultaneously also be eligible to reclaim the VAT paid to the restaurant on the purchase of the food packets.

    The VAT may still apply under the deemed supply provisions where the food bought by the app could not be sold but consumed internally by its staff. If VAT paid to the restaurant was recovered, there would be an obligation to account for VAT on the value of food unsold.

    To entice customers hook on to the app, various promotional schemes are launched. A customer may be given a Dh50 voucher redeemable against the order to reduce his cash payout. The app will pass on the discount from its own income. Correct accounting for discounts, VAT and its appropriate reflection on the invoice is important. The VAT position will be different where the customer is given a voucher not sponsored by the app, rather by a third party. It is important to structure the transactions properly to avoid any VAT dispute later.

    Separately, the customers may also be given freebies when the order value exceeds a threshold. This can be a free dessert etc. The app would typically ask the restaurant to pack the freebie along with the order and later pay the restaurant for the value of the freebie. Similarly, some apps also make the orders free of cost should the food is not delivered within a specified time. Whether supply of a freebie or making the food free qualify as a deemed supply and subject to VAT should be analysed.

    The apps also earn revenue from placing adverts. The UAE VAT law considers online advertisements as a supply of electronic services subject to VAT based on their use and enjoyment in the UAE. It is critical to analyze the contract with the clients, their location and the location of the target audience. The app’s client may be located outside the UAE, but the adverts are targeted for the UAE audience to increase revenue for the client’s UAE based restaurants. Will this be considered a zero-rated supply (since the client does not have a presence in the UAE) or should it be subject to the standard rate of VAT since the use and enjoyment of the advert happens in the UAE. It is important the app is able to demonstrate legally the actual place of use and enjoyment of the adverts for appropriate VAT treatment.

    Issuance and delivery of the tax invoice is mandatory in the VAT law. The app should issue a tax invoice to the customers and ensure it is delivered. It has been observed generally, the app emails a payment summary to the customer that captures the value of food plus the delivery fee and VAT on it. The food invoice is issued by the restaurant and delivered by the app staff to the customer. The app should also issue and deliver a separate simplified tax invoice to the customer for the delivery fee. Non-delivery of this invoice will be considered a non-compliance of the VAT law. Where the delivery fee is fixed, the amount of VAT on it should be considered inclusive. The VAT amount, however, needs to be shown clearly on the invoice.

    The online delivery concepts are fairly new and the tax authorities across the globe are increasingly finding it challenging to tax them. Because of different business models prevalent, identifying and putting a tax treatment on every transaction becomes a task. It is critical for businesses to be vigilant on how the contracts are structured and ensure no transaction goes unnoticed by their tax team.

    Has VAT been a taxing experience?

    date: 20190220

    Organized By: Joanne Clarke - VAT tax director - MEED

    External URL: https://www.meed.com/vat-regime-uae-pinsent-masons/

    The introduction of VAT is just one of the many fiscal strategies that will enable the UAE to achieve its medium to long-term objectives to become an economic powerhouse and world-class business hub.

    A VAT system by its nature is a flexible tool for governments to regulate their annual budgets, contributing to higher revenue intake and a healthier ability to influence economic growth. This is evidenced in numerous OECD, IMF and domestic Central Bank financial and economic reports. These indicate significant increases in tax-to-GDP ratios as a result of the introduction of a new VAT regime and/or the fluctuation of rates within mature regimes.

    The UAE and indeed the GCC’s rationale for the introduction of VAT, together with the related revenues it hopes to generate, give some context to our consideration of whether it has impacted activity in the region, and in particular the construction industry.

    VAT has the essential characteristic of an economically neutral tax—ie, it flows through businesses and tax supplies to final consumers. Once a new VAT system has been introduced and businesses have adjusted, VAT should not be a direct cost for businesses and careful management of associated compliance, cash flow and administration costs should limit the indirect impact. Associated inflation is also generally short lived.

    For a VAT regime to be successful in its aim of neutrality for businesses, and therefore limit the impact on trade, there are a number of key contributing factors: the VAT rates and structure; VAT thresholds and phased introduction; administration of the system; and exemptions.

    Transitional challenges
    If we look at these in the context of the construction industry, they give us a clearer picture of some of the challenges that businesses may have faced during the first year of implementation in the UAE and Saudi Arabia, and the resulting impact on the industry across the region.

    For such an important, high-value sector, the application of a considerably low rate of 5 per cent was crucial in aiding the industry to adjust to this new demand on working capital. Also, the implementation of a simple VAT system was tactical in supporting comprehension and early adoption, especially in the UAE where businesses did not historically have experience with federal tax regimes.

    The impact VAT has had on UAE hiring levels

    date: 20190216

    Organized By: Arabian Business

    External URL: https://www.arabianbusiness.com/jobs/413123-revealed-how-has-vat-affected-uae-hiring-levels

    The majority (84 percent) of recruiters and human resource (HR) professionals in the UAE remain confident about their ability to recruit the right candidates for businesses, according to a new survey.

    However, more than half (56 percent) have experienced candidates demanding above average salaries since the roll out of VAT, according to the Recruiter Sentiment Survey by LinkedIn, the world’s largest professional network.

    The survey said the implementation of VAT in the UAE at the start of 2018 does not seem to have affected hiring rates, with most respondents (57 percent) seeing an increase in hiring from April to December 2018, when compared to the same period in 2017.

    The top reasons for the increase in hiring from April to December 2018 were attributed to business growth (63 percent), availability of more suitable candidates (52 percent) and access to relevant talent insights (51 percent).

    However, over half (55 percent) of respondents stated that there was a greater supply of candidates than available roles.

    “It is interesting to see that despite the introduction of VAT, the UAE job market and workforce appears to remain confident. However, the new tax does appear to be putting added pressure on businesses as candidates demand higher salaries to compensate for the increase,” said Ghassan Talhouk, head of LinkedIn – UAE LinkedIn Talent Solutions.

    The survey revealed that the most in-demand roles since the implementation of the VAT regime were tax and finance executives and IT specialists, as companies geared up for VAT -compliance.

    According to the survey findings, transport, public administration and design sectors are among the hardest to find candidates for, while the hiring rates in IT, food and beverage and hospitality industries have peaked since the start of 2018.

    Should I pay tax on the sale of company assets?

    date: 20190218

    Organized By: Lisa Martin

    External URL: https://www.thenational.ae/business/money/vat-q-a-should-i-pay-tax-on-the-sale-of-company-assets-1.827120

    Legislation states that VAT is charged on taxable supplies made in the normal course of your business. Some argue that selling fixed assets, such as furniture, is outside the normal course of business and is not vatable.

    I don’t agree with this argument and advise charging the tax on the sale of all company assets. The purchase of assets used to generate taxable sales are part of most businesses’ normal activities. When you purchase the new office furniture you will be charged VAT on the purchase, which you can recover in full against your output VAT on taxable sales. It makes sense therefore that if you can recover VAT on a purchase of assets, you should then charge VAT on a subsequent sale of the same item.

    IMF Managing Director commends UAE for strengthening its fiscal framework

    date: 20190209

    Organized By: WAM

    External URL: http://wam.ae/en/details/1395302738139

    The UAE is launching a fiscal risk management project with the IMF’s help and will produce its first fiscal stress test this year, according to Christine Lagarde, Managing Director and Chairwoman of the International Monetary Fund (IMF).

    Speaking at the main session of the Fourth Annual Arab Fiscal Forum organized by the IMF, Arab Monetary Fund, AMF, and the UAE Ministry of Finance, today at the World Government Summit 2019, Lagarde commended the UAE and other countries in the region for strengthening their fiscal frameworks.

    She said that the UAE as well as Saudi Arabia, Kuwait, Sudan and Lebanon have set up macro-fiscal units, a useful first step in strengthening the fiscal framework while Algeria has recently adopted a new budget law with a strong medium-term orientation. Bahrain has introduced a fiscal program designed to achieve balance over the medium term while Mauritania, Morocco, Jordan, and Lebanon are making great progress with medium-term public investment planning and execution. Egypt now publishes a fiscal risk statement with its budget and produces an internal in-year budget risk assessment.

    Speaking on the importance of fiscal policy, the head of the IMF said it plays a vital role in creating and nurturing the vision of sustainable and inclusive growth, especially as encapsulated in the Sustainable Development Goals. “This is because we need fiscal space for spending on health, education, social protection, and public investment all key priorities in this region.” She noted that without a stable foundation, even the best policies can flounder.

    Earlier in her speech, Lagarde expressed her happiness at being in Dubai which she called the “city of tomorrow” where “its economic leaders are dedicated to realizing the vision of a better tomorrow.”

    “This vision is predicated on prosperity that is shared by all, benefiting the poor and the middle class, citizens and immigrants alike; and opportunities that are open to all, including women. It is a vision of fairness over cronyism and partiality, and of trust that government policy is oriented toward the common good.”

    “This is a big vision. But as His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai,once said “The bigger your vision, the bigger your achievement will be we cannot let fear keep us small. We have to be brave to be big.”

    Speaking about the economic environment in the Arab region, Lagarde said it has not yet fully recovered from the global financial crisis and other big economic dislocations over the past decade. “Among oil importers, growth has picked up, but it is still below pre-crisis levels. Fiscal deficits remain high, and public debt has risen rapidly from 64 percent of GDP in 2008 to 85 percent of GDP a decade later. Public debt now exceeds 90 percent of GDP in nearly half of these countries.”

    She said that oil exporters have not fully recovered from the dramatic oil price shock of 2014. “Modest growth continues, but the outlook is highly uncertain reflecting in part the need for countries to shift rapidly toward renewable energy over the new few decades, in line with the Paris Agreement. With revenues down, fiscal deficits are only slowly declining despite significant reforms on both the spending and revenue sides, including the introduction of VAT and excise taxes. This has led to a sharp increase in public debt from 13 percent of GDP in 2013 to 33 percent in 2018,” she added Lagarde also drew attention to the broader economic context bearing on fiscal policy in the region. “We now think that the global economy will grow by 3.5 percent this year, 0.2 percentage points below what we expected in October. And risks are up, given escalating trade tensions and tightening financial conditions. Unsurprisingly, a weaker global environment has knock-on effects on the region through a variety of channels trade, remittances, capital flows, commodity prices, and financing conditions.”

    She said the bottom line of all this is that “the economic path ahead for the region is challenging. This makes the task of fiscal policy that much harder, which in turn makes it even more important to build strong foundations to anchor fiscal policy.”

    Speaking further on the importance of strong fiscal policy, Lagarde said the two key pillars of good fiscal management are robust fiscal frameworks, and good governance and transparency. “There is scope to improve fiscal frameworks in this region. Some of the weaknesses are short-termism and insufficient credibility,” she said.

    “Corruption is the great disruptor of fiscal policy. Without trust in the fairness of the tax system, it becomes harder to raise the revenue needed for critical spending on health, education, and social protection. Governments might be tempted to favor white elephant projects instead of investments in people and productive potential. Add this up, and we have a recipe for unsustainable fiscal policy combined with social discord,” she said.

    Lagarde concluded by saying that good fiscal policy requires good institutional foundations. “Solid foundations in areas such as fiscal frameworks and governance give citizens confidence that fiscal policy serves the good of all, not just the wealthy or the well-connected,” she said

    Revealed: Impact of VAT in Saudi Arabia, UAE, one year on

    date: 20190207

    Organized By: Arabian Business - Sam Bridge

    External URL: https://www.arabianbusiness.com/politics-economics/412762-revealed-impact-of-vat-in-saudi-arabia-uae-one-year-on

    2019 economic outlook: Weaker oil would put pressure on expenditure in countries with higher break-even prices

    Early data suggests that the inflationary impact of the value-added tax (VAT) in both Saudi Arabia and the UAE has largely been contained, according to the most recent PwC Middle East Economy Watch.

    Richard Boxshall, senior economist at PwC Middle East, writing in the report, said the impact of VAT in Saudi Arabia was “limited”, mainly because it raised more revenue than was initially expected.

    “Overall, the new tax policy has been relatively successful in diversifying government revenue without producing excessive inflation,” he said. “A fuller picture will emerge over the next six months or so, including from studying Bahrain, which joined the VAT club this year.”

    Saudi Arabia’s preliminary fiscal outturn data, released alongside the budget in December, estimates that VAT raised $12.2bn in 2018 – nearly a third more than it had expected.

    In a January 2018 projection made by the General Authority of Zakat & Tax, the amount raised is equivalent to about 1.6% of GDP.

    “This suggests a relatively high efficiency of collection in relation to private consumption by international standards,” said Boxshall.

    “The VAT brought in more funds than the expat levy and excise taxes combined, and triple the amount from taxes on income and capital gains.”

    While no data is available on the UAE as yet, Boxshall said it is likely to be higher in relative terms than in Saudi Arabia “because private consumption makes up a larger share of the economy”. Seventy percent of the revenues will be distributed to each of the seven emirates, potentially providing a substantial boost for some.

    Best year for exporters
    Boxshall said 2018 was the best in five years for Middle Eastern oil exporters, driven by two main factors – rising oil prices and increased government spending.

    “This combination of stronger prices, as well as fiscal and structural reforms put these economies on a solid footing for 2019, despite a weaker final quarter marked by increased geopolitical risks and oil prices falling into correction by year’s end,” he said.

    Oil market developments are likely to be the dominant economic driver for the region once again in 2019, following the sharp decline in prices in the final months of 2018, and OPEC and its allies agreeing to cut output by 1.2m barrels a day in November.

    Boxshall said weaker oil would put pressure on expenditure in countries with higher break-even prices.

    “This includes Saudi Arabia, whose 2019 budget envisages a 20% increase in capex and a 7% overall increase compared with the 2018 outturn,” he said. “However, Saudi Arabia’s low debt level (about 19% of GDP) means it can finance a larger deficit if needed, although it is still aiming to balance its budget by 2023.”

    Active year for M&As and IPOs
    Whatever happens at a macroeconomic level, 2019 is likely to be an active year for corporate transactions, which includes major M&A and IPO activity.

    Banking sector mergers are under discussion in several countries. The region is widely recognised as being overbanked and has begun to consolidate over the past few years. As banks scale up through mergers, this should boost the sector’s capacity to finance projects and businesses, supporting growth.

    Meanwhile, efforts to attract investment will continue, including the announcement of which sectors are eligible for 100% onshore foreign ownership under a new UAE law. There should also be progress in privatisation efforts in Saudi Arabia, Oman and Kuwait.

    VAT Public Clarification Donations, Grants and Sponsorships

    date: 20190128

    Organized By: FTA

    External URL: https://www.tax.gov.ae/pdf/VATP011%20-%20Donation%20Grants%20and%20Sponsorships.pdf

    The VAT treatment of donations, grants and sponsorships depends on whether the donor, grantor or sponsor, as the case may be, has received any benefit in return for such payments. Where any benefit is received in return for the payments, VAT implications will arise. However, where no benefit is received, the payments will be treated as outside the scope of VAT as they will not be seen as consideration for a supply.

    The VATP011 clarification states where donation and grants do not have any supply, they are considered as out of scope. Generally, sponsorship will be subject to VAT as there is usually associated supply to such sponsorship. Click here to read more.

    VAT Public Clarification - Bank Interest and Dividends

    date: 20190129

    Organized By: FTA

    External URL: https://www.tax.gov.ae/pdf/VATP010%20Interest%20and%20Dividends.pdf

    Passively earned interest income from bank deposits and dividend income are, therefore, outside the scope of VAT, and there is no requirement to report them in the VAT return.

    The clarification VAT P010 primarily states that bank interest and dividends are out of scope and need not be shown as exempt income in the VAT returns. Other interest income are considered as exempt income where there Is supply Management fee is subject to VAT. Please refer to clarification for full details.

    VAT Refunds for Business Visitors

    date: 20190102

    Organized By: FTA

    External URL: https://www.tax.gov.ae/pdf/VAT%20Refund%20User%20Guide-Business%20Visitors_EN.pdf

    Read the latest FTA guide dated Dec’18 which has been issued for Business visitors refund.

    Click here to know more

    Emirates NBD launches VAT-based loan solution for SMEs

    date: 20190106

    Organized By: Lubna Hamdan - Arabian Business

    External URL: https://www.arabianbusiness.com/banking-finance/410808-emirates-nbd-launches-vat-based-loan-solution-for-smes

    Dubai’s largest bank Emirates NBD has launched a new VAT-based loan solution for small and medium-sized enterprise (SME) customers.

    The new programme eases the lending application process for SMEs as it allows them to validate their business turnover and income by providing the bank with copies of their VAT returns filed with the UAE’s Federal Tax Authority (FTA).

    “Emirates NBD’s VAT-based loan offering symbolises our commitment to the UAE’s small and medium businesses and supports the objective of Expo 2020 Dubai to foster growth of the SME sector,” said Suvo Sarkar, senior executive vice president, Head of Retail Banking and Wealth Management at Emirates NBD.

    The new programme will cover home, auto and business loan products.

    Bank lending remains one of the biggest challenges faced by GCC-based SMEs, where less than 5% of bank loans are dedicated to small businesses in the region. It is believed to be among the lowest in the world.

    Institutions such as Mashreq Bank argued that its SME loss rate stood too high at 20%, CEO Abdulaziz Al Ghurari said at the 2017 Middle East Banking Forum in Abu Dhabi, though it is not clear whether other banks face the same rates.

    FTA clarifies VAT for independent director fees

    date: 20190113

    Organized By: waheedabbas@khaleejtimes.com

    External URL: https://www.khaleejtimes.com/business/vat-in-uae/fta-clarifies-vat-for-independent-director-fees-

    VAT for independent directors’ services depend mainly on whether the fees for the said directors were known from the outset or not.

    The Federal Tax Authority (FTA) has confirmed that the date of supply for value-added tax (VAT) with regard to independent directors’ services is determined either in accordance with the general rules or the special rules, depending mainly on whether the fees for the said directors were known from the outset or not.

    The authority said that where such fees are known from the outset, the date of supply shall be determined in accordance with the provisions of Articles (25) and (26) of Federal Decree-Law No. (8) of 2017 on VAT, depending on whether or not there will be periodic payments.

    If such fees are not known from the outset, they shall be determined upon conclusion of the annual general meeting and the date of supply shall be established only when such fees become known.

    The FTA explained that in instances where the board fees are known at the outset and involve periodic or multiple payments, the date of supply would be determined as per Article (26) of Federal Decree-Law No. (8) of 2017 on VAT, where the date of supply would be the earliest of the following three: The date of issuance of the tax invoice; the date the payment is due as shown on the tax invoice; and the date of receipt of payment.

    If 12 months have passed from the date of provision of services and none of the aforesaid events has occurred, the date of supply will be triggered at the end of the 12th month.

    As for the instances where board fees are known at the outset but there are no periodic or multiple payments, the date of supply would be determined as per Article (25) of the Federal Decree-Law No. (8) of 2017 on VAT. Accordingly, the date of supply would be the earliest of the following three: The date of issuance of a tax invoice; the date on which the provision of services was completed; and the date of receipt of payment.

    FTA issues guidelines for foreign businesses' VAT refund in UAE

    date: 20190119

    Organized By: waheedabbas@khaleejtimes.com

    External URL: https://www.khaleejtimes.com/business/vat-in-uae/fta-issues-guidelines-for-foreign-businesses-vat-refund-in-uae

    The Federal Tax Authority (FTA) has outlined four conditions that would allow foreign businesses to recover value-addded tax (VAT) incurred in the UAE.

    To be eligible for the VAT refund, the first condition is that foreign businesses must not have a place of establishment or fixed establishment in the UAE or in any of the VAT-implementing GCC states.

    Secondly, such foreign businesses must not be a taxable person in the UAE. Thirdly, they must also be registered as an establishment with a competent authority in the jurisdiction in which they are established; and finally, they must be from a country that implements VAT and that equally provides VAT refunds to UAE businesses in similar circumstances.

    The authority clarified that the period of each refund claim shall be a calendar year, noting that for claims in respect of the 2018 calendar year, refund applications can be made as of April 1, 2019. However, for subsequent calendar years, the opening date for accepting refund applications will be March 1 of the following year; this means that for the period from January 1 to December 31, 2019, applications will be accepted as of March 1, 2020.

    The FTA went on to stress that the minimum claim amount of each VAT refund application submitted by business visitors is Dh2,000, which may consist of a single purchase or multiple purchases. The Authority urged potential applicants to hold on to the original tax invoices on the purchases for which they would like to reclaim VAT, as they will be required to be submitted along with the refund applications.

    The state may still submit a VAT refund application to reclaim VAT incurred in the UAE under this scheme, the FTA assured, outlining only three situations where VAT cannot be reclaimed.

    The first situation is if the foreign business in question makes supplies in the UAE, unless the recipient is obliged to account for VAT under the reverse charge mechanism. Secondly, a VAT refund cannot be processed if the input tax in respect of any goods or services is “blocked” from recovery and, therefore, not recoverable by a taxable person in the UAE. The third situation where a refund is not possible is if the foreign business is a non-resident tour operator.

    Khalid Ali Al Bustani, director-general, FTA, noted that this procedure reflects positively on many sectors, including tourism, trade, exhibitions, conferences, etc.

    He further explained that reciprocity is a key condition for the procedure, whereby the Authority will refund the VAT to businesses resident in countries that refund VAT for UAE businesses visiting their territories.

    Cosmetic services subject to 5% VAT in UAE

    date: 20190113

    Organized By: waheedabbas@khaleejtimes.com

    External URL: https://www.khaleejtimes.com/business/vat-in-uae/cosmetic-services-subject-to-5-vat-in-uae-

    Healthcare services that are not basic or preventive in nature but more cosmetic are subject to the standard 5 per cent VAT rate, tax experts said.

    The majority of healthcare services under the UAE VAT law have been classified as zero-rated. This effectively means that such services are subject to VAT at zero per cent but with the eligibility to recover the VAT incurred on associated costs.

    “The government has a keen interest and focus on promoting the healthcare industry in the UAE. Keeping this intent in mind, the government has kept basic and preventive healthcare supply at a zero rate of VAT. But there are a lot of activities that are still subject to VAT,” said Nimish Goel, partner at WTS Dhruva Consultants, while addressing a seminar on VAT.

    Research reports suggest healthcare expenditure is projected to reach in excess of $100 billion in the GCC, with the UAE playing a prominent role. It is estimated that the UAE healthcare market is projected to reach Dh71.56 billion by 2020.

    Dr Ramadan AlBlooshi, CEO, Dubai Healthcare City Authority – Regulatory (DHCR), said following the introduction of VAT at the beginning of last year, the authority received enquiries about its implementation.

    “We are keen to provide a platform to help stakeholders have a better understanding of VAT to facilitate compliance in the free zone,” he said.

    At the seminar, WTS Dhruva Consultants also launched a comprehensive VAT guide for companies operating in the healthcare sector in the UAE. The guide, titled: “VAT on Health Care in UAE – Impact and Insights” elaborated and addressed numerous issues related to healthcare service providers, insurance companies, and related products.

    Dinesh Kanabar, CEO and founder of WTS Dhruva, said the VAT guide prepared by WTS Dhruva for the healthcare sector in the UAE is first of its kind in the country.

    “The guide addresses numerous issues related to the activities of healthcare service providers,” he said.

    UAE clarifies when companies must de-register from VAT

    date: 20190126

    Organized By: Sarah Townsend

    External URL: https://www.thenational.ae/business/economy/uae-clarifies-when-companies-must-de-register-from-vat-1.818251

    Companies registered to pay value added tax in the UAE must apply to remove themselves from the system if they stop operating or anticipate a drop in the value of their taxable sales to below Dh187,500 per annum, the government said on Saturday.

    Failure to de-register could elicit a fine from the UAE Federal Tax Authority, the official body that administers the tax said in a statement.

    “Registrants will not be de-registered unless they have paid all due taxes and administrative penalties and filed required tax returns for the period in which they were registered, as stipulated under tax legislation,” the FTA’s statement added.

    The UAE, together with Saudi Arabia, introduced a 5 per cent VAT on goods and services in January 2018, as part of plans to increase non-oil revenues and create a more transparent business environment.

    Any company generating taxable sales of above the threshold of Dh375,000 per annum must register themselves on the government’s VAT system and pay all of the tax for which they are liable each year, while companies with taxable sales above Dh187,500 per annum can voluntarily register themselves to pay VAT.

    However, if a company anticipates it will experience a drop in total annual sales to below that minimum threshold over a 30-day period ahead, it must de-register from VAT liability, the FTA said. The application must be submitted within 20 working days of the occurrence of that drop in sales, otherwise the company could be subject to a fine.

    “Failing to submit the de-registration application within the period…will lead to the imposition of administrative penalties as stipulated in the VAT tax legislation,” the statement said.

    Taxpayers in UAE and Saudi Arabia: Get ready for official tax audits in 2019

    date: 20181225

    Organized By: The National Business - Dania Saadi

    External URL: https://www.thenational.ae/business/economy/taxpayers-in-uae-and-saudi-arabia-get-ready-for-official-tax-audits-in-2019-1.806213

    Taxpayers in the UAE and Saudi Arabia will have to brace themselves for official audits next year as the roll-out of the 5 per cent VAT since January 1 this year overcomes a number of hurdles and teething problems.

    Now that regulations are in place, taxpayers are expected to prepare for audits by the UAE’s Federal Tax Authority and Saudi Arabia’s General Authority of Zakat and Tax next year. It is an exercise that will test their resources and the accuracy of record keeping as well as the filing of tax returns.

    The two states were the first countries in the Arabian Gulf to introduce the levy following the implementation of excise taxes on energy and fizzy drinks and cigarettes in 2017.

    “In the UAE and Saudi Arabia, next year there will be a lot of full-scale tax audit activity undertaken on businesses,” said David Stevens, GCC VAT

    Implementation Partner at advisory EY.

    “These businesses need to prepare themselves to be able to completely justify all of their numbers, all of their data, all of their statements, all of their payments, all of their invoices, all of their record-keeping, and all various other aspects of their VAT compliance that will come under increased scrutiny by the authorities as we go into the second year of operation.”

    GCC countries are introducing taxes to cope with the crash in Brent oil prices from more than $115 per barrel in mid-2014 to around $50 per barrel currently.

    The International Monetary Fund estimated that the introduction of VAT in the region could generate new revenue of 1.5 to 3 per cent of non-oil GDP.

    Bahrain will be the third country to introduce the levy on January 1, 2019, but it plans to introduce a more complex system that has a lot of items exempt from VAT amid a lack of clarity over many aspects of the regulations.

    Meanwhile, in the UAE and Saudi Arabia, the tax authorities – which toiled in 2018 to clarify ambiguities about VAT rules and regulations – will need to continue this exercise into 2019 as they begin to conduct tax audits.

    “The authorities will be launching audit activity while there are some areas with unclarified rules, so they won’t know how to enforce them,” said Mr Stevens.

    “The pressure falls on the authorities to resolve any unsettled, non-clarified or disputed areas of interpretation. They need those clarified so that auditors can do their job and taxpayers need that to make sure they are fully compliant.”

    Companies in 2018 struggled to be compliant for various reasons. Some waited too long, some did not expect the levies to be introduced, while others changed their processes to comply, but their work was dogged by mistakes.

    UAE to be fastest growing GCC economy in 2019: IIF

    date: 20190109

    Organized By: Khaleej Times - Waheed Abbas

    External URL: https://www.khaleejtimes.com/business/economy/uae-to-be-fastest-growing-gcc-economy-in-2019-iif

    “Consumer inflation will ease in 2019 in Saudi Arabia and the UAE after the VAT related spike in 2018. Downward pressure from the low rental prices will persist,” IIF analysts said.

    The UAE will be the fastest growing economy in the GCC region this year along with Oman, driven by non-oil sector, Dh50 billion Abu Dhabi stimulus package and projects linked to Expo 2020 Dubai, according to a new report released on Wednesday.

    The Institute of International Finance (IIF) analysts projected the UAE’s real GDP to grow 3.1 per cent in 2019 compared to 2.9 per cent estimated for 2018. But growth is projected to slow down to 2.7 per cent in 2020. Nominal GDP is estimated to increase from $434 billion (Dh1.592 trillion) in 2018 to $444 billion (Dh1.629 trillion) in 2019 and $458 billion (Dh1.681 trillion) in 2020.

    Taimur Khan, Research Manager, Knight Frank, said in an another UAE research that outlook for the UAE’s GDP growth in 2018 and 2019 remains positive on the back of higher oil prices, a range of stimulus packages and easing of business regulations in both Abu Dhabi and Dubai, which are likely to support activity in both the public and private sectors.

    International Monetary Fund had predicted 3.7 per cent growth for the UAE for 2019 in its October forecast. While World Bank on Tuesday predicted 2 per cent in 2018 which is expected to accelerate to 3.0 per cent in 2019 and 3.2 per cent in 2020 and 2021.

    According to IIF forecast, Oman’s real GDP growth is also projected at par with the UAE at 3.1 per cent for this year and 3.4 per cent in 2020. While Saudi Arabia’s real GDP is predicted to grow 2 per cent in 2019, Kuwait at 0.4 per cent, Qatar at 2 per cent and Bahrain at 2.4 per cent.

    Federal Tax Authority announces results, successes of first year of VAT implementation

    date: 20190105

    Organized By: WAM Hassan Bashir

    External URL: http://wam.ae/en/details/1395302730638

    Khalid Ali Al Bustani, Director General of the Federal Tax Authority (FTA), asserted that in the first year of implementing Value Added Tax (VAT) in the UAE, the Authority registered many successes from deploying easy-to-use, hi-tech electronic systems to ensuring high compliance rates among businesses across the country.

    The VAT system has been praised by experts and local, regional and international official bodies, he added, noting that despite the challenges that were expected at the beginning of implementation – which was a common occurrence in many countries that introduced VAT around the world – the UAE successfully rolled out a seamless and flexible tax system, complete with a progressive legislative environment that meets the highest standards in the field.

    The news came in a press statement issued by the Authority to mark the first anniversary of the introduction of VAT in the UAE, which went into effect on January 1, 2018, at a 5% rate on the supply of most goods and services in the country.

    “In collaboration with all concerned entities, the Federal Tax Authority set the foundations for a holistic and balanced tax system, making the UAE one of the first countries in the world to implement a fully electronic paperless tax system,” Al Bustani said. “Our advanced system encourages auto-compliance with procedures, all the while maintaining transparency and accuracy, as directed by the UAE’s wise leadership, which strives to make the UAE one of the best countries in the world by 2021.”

    The FTA Director General revealed that the number of businesses that registered in the tax system during the first year of implementation exceeded 296,000 companies and tax groups, noting that the rates of compliance among Taxable Persons in the UAE are increasing remarkably. Statistics show that the total number of periodic Tax Returns received by the Authority from businesses registered for VAT purposes exceeded 650,000 in 2018, he said, adding that this high compliance rate was due to the easy procedures set for submitting Tax Returns and paying due taxes, available 24/7 via the e-Services portal on the FTA official website: www.tax.gov.ae . The platform was designed according to international best practices and provides flexible and varied payment mechanisms, as well as information and guidance to promote tax awareness.

    “The Federal Tax Authority was among the 8 most searched names in the UAE on global search engine Google in 2018,” he revealed. “This demonstrates that in a short period of time, the Authority successfully became the centre of attention among large segments of society and across various sectors. It also confirms that the FTA website was among the most viewed and most interactive websites in the UAE. ”

    “The FTA will continue to upgrade its integrated tax management systems, increasing efficiency and providing all facilities to ensure compliance with tax procedures and laws, designed to meet the highest international standards,” Al Bustani noted.

    VAT ushers in second year, carrying positive influence on economic growth

    date: 20181228

    Organized By: WAM

    External URL: http://wam.ae/en/details/1395302729470

    The Value-Added Tax will usher into its second year of implementation just in a few days from now in both the UAE and Saudi Arabia, carrying forward a positive influence on economic growth in both countries, with other GCC States projected to come aboard the VAT system either in 2019 or the year after.

    According to the International Monetary Fund’s forecasts, cited by a report recently issued by the Federation Gulf Cooperation Council Chambers, the introduction of VAT in the Gulf region could generate new revenue of 1.5 to 3 percent of non-oil GDP.

    The report spotlighted the impact generated by the new tax and its contribution to the economic diversification efforts ongoing across the Gulf region to secure the necessary funds required to finance infrastructure projects and public services.

    On the UAE, the report said VAT was introduced on 1 January 2018 at a rate of 5 percent to provide a new source of income which will be continued to be utilised to provide high-quality public services and help government move towards its vision of reducing dependence on oil and other hydrocarbons as a source of revenue.

    According to published reports, VAT in the UAE has helped drive the economy by building different streams of income to help the country wean itself off oil.

    Along with its partners across the GCC, the Kingdom of Saudi Arabia has chosen to implement a standard VAT tax rate of 5 percent effective January 2018. In line with GCC Supreme Council Resolution made in its session No. 36 on authorising the Financial and Economic Committee to complete the necessary requirements of GCC VAT Unified Agreement, Saudi Arabia approved the Agreement with a Royal Decree No. M/51. The country issued its National VAT Law with Royal Decree No. M113 and published its Implementing Regulations issued by GAZT Board of Directors Resolution No.3839.

    In the meantime, the Bahrain VAT Law has been published and sets out the general principles for the application of VAT in the country. In line with the GCC VAT Unified Agreement, VAT will be implemented in Bahrain on 1 January 2019.

    Input Tax Apportionment: Special Methods

    date: 20181231

    Organized By: FTA

    Wef 1st Jan 2019, taxable entities can apply for the alternate method for input tax apportionment in relation to its industry.

    It is not compulsory to apply for special apportionment method. However, if there are differences of Aed 250k or more in the standard apportionment method and the alternate method applicable for the industry, then the annual adjustments have to be done in the immediate return subsequent to the first tax year.

    Click here to learn more.

    Federal Tax Authority: Profit Margin Scheme applies only to used cars already subjected to VAT

    date: 20181203

    Organized By: WAM/Rasha Abubaker/Esraa Ismail

    External URL: http://wam.ae/en/details/1395302724911

    The Federal Tax Authority (FTA) has announced that only those goods which have previously been subject to VAT before the supply in question may be subject to the Profit Margin Scheme. As a result, stock on hand of used goods which were acquired prior to the effective date of Federal Decree-Law No. (8) on Value Added Tax (VAT law), or which have not previously been subject to VAT for other reasons, are not eligible to be sold under the profit margin scheme. VAT is therefore due on the full selling price of such goods.

    The Authority had clarified the above to address questions from the audience at an awareness session recently organised at the Abu Dhabi Chamber of Commerce and Industry to raise awareness among car dealers about the procedures and tax treatment for this vital sector, as well as the efforts made by the FTA to remove obstacles facing those working in the sector.

    The session brought together several car dealers, experts and other stakeholders from the industry, where the FTA team introduced them to the procedures for implementing VAT and the Profit Margin Scheme.

    In a press statement issued today, FTA Director-General Khalid Ali Al Bustani asserted that the Federal Tax Authority has been committed, since the tax system went into effect, to raising awareness among all business sectors to abide by their tax obligations, by means of various media and digital channels, as well as direct contact through awareness campaigns across all seven emirates. The Authority also provides various tax awareness instruments through its website, which was designed according to international best practices.

    “The Federal Tax Authority is committed to enhancing its partnerships with business sectors and providing assistance for them to fully comply with tax regulations,” Al Bustani said. “The Authority maintains constant communication with retailers, producers and service providers to identify their views and ensure a smooth and seamless implementation of the UAE tax system with minimal effects on their business activities.”

    Phase 2 of tourist VAT refund scheme rollout from Dec 16

    date: 20181213

    Organized By: Khaleej Times - Waheed Abbas

    External URL: https://www.khaleejtimes.com/business/vat-in-uae/phase-2-of-tourist-vat-refund-scheme-rollout-from-dec-16-

    The Federal Tax Authority (FTA) on Wednesday said all preparations were complete to launch phase 2 of the Tax Refunds for Tourists Scheme from Sunday, December 16. The scheme would cover 12 air, land and sea ports across the UAE.

    The first phase went into effect on November 18, 2018, covering the Abu Dhabi, Dubai and Sharjah international airports.

    The second phase will cover Al Ain International Airport, Al Maktoum International Airport and Ras Al Khaimah International Airport; as well as 2 sea ports: Zayed Port in Abu Dhabi and Port Rashid in Dubai; and 4 land ports: Al Ghuwaifat Border Post in Abu Dhabi, Hili Border Port and Al Madheef Border Crossing in Al Ain, and Dubai’s Hatta Border Exit.

    “The FTA coordinated with the system operator Planet, running all necessary experiments to ensure the scheme is implemented smoothly and accurately,” said Khalid Ali Al Bustani, director-general of FTA.

    Al Bustani projects daily refunds of value-added tax (VAT) to grow quickly in the coming period. The number of refund requests processed surpassed 3,800 daily transactions.

    The FTA asserted that to be refundable, tax invoices must be issued by retail stores included in the scheme and registered in the system; these venues can be identified by visibly showcasing ‘tax-free’ stickers on their storefronts.

    The FTA had outlined conditions for a tourist to be eligible for a tax refund, namely: The tourist in question is at least 18 years old; goods eligible for the scheme are supplied to an overseas tourist who was on UAE soil when the purchase was made, and who intends to exit the UAE along with the purchased items within 90 days; goods must be exported out of the UAE by the tourist within 3 months of the date of supply.

    New entity to handle tax refunds at Dubai airport

    date: 20181119

    Organized By: GDN Online - TradeArabia News Service

    External URL: http://www.gdnonline.com/Details/431728

    Planet, a new entity recently appointed by the UAE’s Federal Tax Authority (FTA) will operate the Tourist Refund Scheme (TRS) at Dubai International (DXB), said a statement from Dubai Airports.

    This closely follows the recent announcement by the FTA, outlining conditions and procedures for tourists to claim their Value Added Tax (VAT) refunds when exiting the country.

    A ‘Tax Free Tag’, generated whilst shopping with the required passport or GCC ID, must be attached to the sales receipt upon purchase in-store. Prior to check-in the customer will then need to validate the Tax Free Tag and goods at one of the Planet validation points situated across DXB’s three terminals.

    Upon successful validation, the tourist is offered a choice of refund via credit card or cash. Those customers who prefer a cash refund can have it processed at one of the Travelex outlets in the airport’s airside departure areas.

    Dh10,000 cap on daily VAT refund for tourists

    date: 20181113

    Organized By: Press Reader - Gulf news

    External URL: https://www.pressreader.com/uae/gulf-news/20181113/282338270899709

    The maximum value added tax (VAT) refund that can be given to a tourist in a 24-hour period has been capped at Dh10,000, according to Decision No 2 of 2018 issued by Shaikh Hamdan Bin Rashid Al Maktoum, Deputy Ruler of Dubai, Minister of Finance, and Chairman of the Board of the Federal Tax Authority (FTA).

    The decision also stipulates that tax cannot be refunded under the scheme unless the total value of tax inclusive purchases issued by the same taxable person is Dh250 or more.

    The decision comprises seven clauses and stipulates that VAT refund claims shall be provided by retailers participating in the tax refunds for tourists as of November 18.

    An overseas tourist may get a refund at the Abu Dhabi, Dubai and Sharjah International airports as of next Sunday. The tourists may also recover VAT at the other airports, land and seaports in the UAE as of December 16.

    The decision outlined the five steps that retailers must follow when a customer asks to make a purchase under the scheme, including age and identity verification.

    Click here to know more about FTA Decision No 2 of 2018 on Tax Refunds for Tourists Scheme

    Verify that used cars were subject to VAT, says FTA

    date: 20181106

    Organized By: Khaleej Times

    External URL: https://www.khaleejtimes.com/verify-that-used-cars-were-subject-to-vat-says-fta

    The Federal Tax Authority (FTA) has called on retailers to verify that used cars were subject to the value added tax (VAT) before applying the Profit Margin Scheme, during an awareness workshop for car dealers.

    The workshop applauded the high tax compliance rate and increased tax awareness among businesses in the automotive sector, and reiterated its commitment to empowering businesses. The authority also introduced various procedures and tax treatment for the key sector, highlighting the FTA’s steps to address any obstacles that businesses face. More than 100 dealers, experts and stakeholders participated in the workshop, which was organised by the FTA in collaboration with the Dubai Municipality and Al Aweer Auto Market in Dubai.

    “Tax laws in the UAE have prioritised the establishment of an environment conducive to continued growth and prosperity in commercial activities – a sector of great importance in the government’s plans to diversify sources of income,” FTA director-general, Khalid Ali Al Bustani, asserted.

    The FTA experts presented a detailed explanation of the procedures and legalities surrounding VAT on the sale of new and used vehicles. They also shed light on the Profit Margin Scheme, its terms and conditions, the supplies eligible for it, and the obligations for the Taxable Person.

    The authority’s representatives asserted that according to Federal Decree-Law No. (8) of 2017 on VAT and Cabinet Decision No. (52) of 2017 on the Executive Regulations of said Decree-Law, the Profit Margin Scheme is only applicable to supplies that already incurred VAT prior to the current supply. Therefore, the stock of used goods purchased before Federal Decree-Law No. (8) of 2017 went into effect (or that didn’t incur tax for any reason) do not qualify for the Profit Margin Scheme, and VAT is instead calculated on the items’ full price.

    UAE businesses told to keep tax data confidential

    date: 20181104

    Organized By: Khaleej Center

    External URL: https://www.khaleejtimes.com/business/vat-in-uae/uae-businesses-/told-to-keep-tax-data-confidential

    The Federal Tax Authority (FTA) has called on businesses registered for tax purposes not to disclose their financial or tax data to any person or organisation that is not officially authorised to deal with such data.

    The authority stressed in a statement issued on Saturday that it is necessary to remain vigilant about messages received via e-mail or mobile phone and not to share tax registration numbers (TRN) or financial account numbers with any entity.

    It urged all registered businesses to maintain the confidentiality of their data, noting that it did not authorise any entity to request tax-related financial or accounting information or any other matters relating to tax registrants.

    Businesses registered with the Authority for tax purposes can submit their tax returns within the deadline and pay taxes due for specific tax periods by visiting the e-Services portal on the FTA website – eservices.tax.gov.ae – available 24/7, accessing the tax return form, entering the data, then pressing ‘submit’. Users can then proceed to pay their due taxes by clicking on the ‘My Payments’ tab.

    UAE gold retailers pin hopes on VAT refund for tourists

    date: 20181101

    Organized By: Manoj Nair, Associate Editor

    External URL: https://gulfnews.com/business/sectors/retail/uae-gold-retailers-pin-hopes-on-vat-refund-for-tourists-1.2296427

    Dubai: The UAE’s gold and jewellery sector endured its toughest quarter ever between July to end September, with demand dropping to 6 tonnes, a 13 percent decline from Q3-17, according to the latest update from the World Gold Council. Some of the “retailers registered losses for the first time”, the report adds.

    “One cannot remember a quarter that has been this tough, at least not in recent memory,” said John Mulligan, Head of Member and Market Relations at WGC.

    But the imminent introduction of VAT refunds for tourists could provide some much needed relief, according to jewellery industry sources here. “That (tax refunds) would be key to recovery – tourist-related buying of gold and jewellery in the UAE is down 30 percent in the year to date,” said Abdul Salam K.P., Executive Director at Malabar Gold & Diamonds and board member on the Dubai Gold and Jewellery Group.

    Federal Tax Authority’s Board of Directors adopts budget for 2019

    date: 20181029

    Organized By: WAM/Rola Alghoul/Esraa Ismail

    External URL: http://wam.ae/en/details/1395302716698

    The Federal Tax Authority’s, FTA, Board of Directors today held its sixth meeting, chaired by H.H. Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and UAE Minister of Finance, held at the Ministry of Finance premises.

    During the meeting, the Board adopted the FTA’s proposed budget for 2019, in addition to a number of executive decisions regarding the authority’s internal regulations, policies and operations.

    Furthermore, the Board discussed a detailed report outlining the FTA’s achievements over the past period, as well as the latest developments with regards to the authority’s activities, the registration process for Value Added Tax, VAT, and Excise Tax, import declarations, Tax Returns on Excise Tax and VAT, and audit procedures. The report revealed a high rate of tax compliance in the UAE.

    Sheikh Hamdan commended the authority for the continued progress of its systems, confirming that the FTA has successfully strengthened its partnership with the private sector, providing all necessary facilities to ensure self-compliance with tax regulations in a seamless manner supporting economic activities.

    More clarity needed for VAT on healthcare, education in UAE

    date: 20181022

    Organized By: Nimish Goel/dubai

    External URL: https://www.khaleejtimes.com/business/vat-in-uae/More-clarity-needed-for-VAT-on-healthcare-education-in-UAE-

    The UAE Cabinet has approved the Federal Budget for 2019 with more than half of the budget allocated for community, education and healthcare keeping in mind the UAE’s National Agenda 2021.

    To make the UAE a preferred education and healthcare destination in the world, the government is taking all efforts to improve and build a robust infrastructure (including setting up world-class hospitals, universities, etc., in the country) and also ensuring all constituents of the eco-system are geared up. To make it happen, even the newly introduced VAT law has been carefully drafted to play an important role in shaping up these sectors.

    Tourists can begin reclaiming VAT as of November 18

    date: 20181022

    Organized By: WAM/Tariq alfaham

    External URL: http://wam.ae/en/details/1395302715464

    The Federal Tax Authority (FTA) has announced that Tax Refund for Tourists Scheme goes into effect on November 18, allowing eligible tourists to request refunds of the Value Added Tax (VAT) incurred on their purchases.

    The first phase will see the digital system of the Tax Refund for Tourists Scheme implemented at Abu Dhabi, Dubai and Sharjah International Airports. As of mid-December, the system will be fully operational to include all airports and land and sea ports in the UAE, as stipulated in the Cabinet Decision which aims to strengthen the UAE’s leading position as a major destination on the global tourism map.

    FTA simplifies VAT refund procedures for UAE nationals building new residences

    date: 20181016

    Organized By: WAM/MOHD AAMIR/Tariq alfaham

    External URL: http://wam.ae/en/details/1395302714321

    Khalid Ali Al Bustani, the Director-General of the Federal Tax Authority, FTA, has announced that procedures to reclaim Value Added Tax, VAT, for UAE nationals who are building new residences have been simplified with electronic procedures.

    The announcement was made today through a press release that detailed the latest updates on the VAT refund process for UAE nationals building new residences. Al Bustani said the FTA was committed to adhering to the vision of the UAE’s wise leadership to develop a modern housing system and to deliver the best standards of life and well-being within the framework of care that the state provides, as the focus of development plans and as part of the basic objectives of all initiatives and projects carried out by state institutions.

    Al Bustani said, “The happiness of UAE citizens is the top priority for the Federal Tax Authority. We are committed to implementing our services through the most advanced, innovative, and easy-to-use digital systems.”

    FTA determines tax treatment for 'compensation-type payments'

    date: 20181014

    Organized By: WAM/Nour Salman

    External URL: http://wam.ae/en/details/1395302713843

    The Federal Tax Authority, FTA, has issued a public clarification regarding tax treatment of compensation-type payments, noting that value added tax, VAT, is imposed on supplies of goods and services and if any payment does not relate to a supply of goods or services, then the payment is not subject to VAT.

    The Authority noted that as part of business agreements, businesses usually make payments to compensate each other for any loss, negligence or other errors. VAT should not be applied to such amounts if they do not relate to a supply.

    In a recent press statement, the Federal Tax Authority noted that under Article 02 of Federal Decree-Law No. 08 of 2017 on Value Added Tax, VAT is imposed, among other things, on taxable supplies of goods and services. Taxable supply is defined in Article 01 of the same Law as a “supply of goods or services for a consideration by a person conducting business in the UAE and does not include exempt supply”.

    FTA clarifies VAT on healthcare of employees' families

    date: 20181007

    Organized By: Waheed Abbas/Dubai

    External URL: https://www.khaleejtimes.com/business/vat-in-uae/fta-clarifies-/vat-on-healthcare-of-employees-families

    The Federal Tax Authority issued a clarification on insurance that states that an employer would only be able to claim the input VAT on the health insurance provided to employees’ families if it is the legal obligation of the employer to provide the insurance.

    Pratik Shah, partner at Dhruva Advisors, said there is no legal obligation in Dubai on the employer to provide health insurance to the family of an employee, whereas Abu Dhabi mandates employers to provide such extended benefits.

    “It would be interesting to see how an employer having head office in Abu Dhabi and having operations and employees situated all over the country will split the recovery of VAT and vice-versa. VAT being a federal-level law should ideally provide a ‘level playing field’ for all tax registrants. However, this would lead to employers situated in Abu Dhabi at an advantageous position to employers situated in the rest of Emirates,” Shah said.

    FTA sets September 30 deadline for submitting tax returns

    date: 20180930

    Organized By: WAM/MOHD AAMIR

    External URL: http://wam.ae/en/details/1395302710744

    The Federal Tax Authority (FTA) has called on businesses registered in the Value Added Tax (VAT) system whose tax period ended on 31st August, 2018, to submit their tax returns as soon as possible and not wait until the deadline to avoid any delays.

    The Authority stressed the need to submit tax returns and settle due taxes no later than Sunday, 30th September 2018. The FTA reminded that according to Federal Decree-Law No. (8) for 2017 on VAT and its executive regulations, tax returns must be submitted to the FTA no later than the 28th of the month following the end of the tax period in question, and according to Federal Law No. (7) of 2017 on tax procedures, the deadline shall be extended to the next working day if the 28th falls on an official holiday.

    Experts opine - Bahrain to start VAT soon

    date: 20180926

    Bahrain will be the next country to implement five percent value-added tax (VAT) after the UAE and Saudi Arabia as part of the GCC framework agreed between the six states, according to tax experts.

    Bahrain seems to be the next country to implement VAT if we listen to tax experts’opinions that are recently appearing online.

    We share here links to two articles that appear to indicate that Bahrain might be announcing VAT soon.

    https://www.albawaba.com/business/bahrain-next-line-implement-vat-gcc-1191316

    http://www.gdnonline.com/Details/402361/Online-businesses-urged-to-gear-up-for-VAT-impact

    FTA urges retail companies to register in ‘Tax Refund Scheme for Tourists’ system

    date: 20180922

    Organized By: WAM/Nour Salman

    External URL: http://wam.ae/en/details/1395302709370

    The Federal Tax Authority, FTA, has invited retailers, outlets and shops registered for Value Added Tax, VAT, to register in the digital system of the Tax Refund Scheme for Tourists, which will come into effect as of the fourth quarter of 2018.

    The Authority is implementing the Scheme in cooperation with Planet, and has identified four basic conditions for registering, namely: the retailer must be registered with the Authority for VAT and have a tax registration number, TRN; the supplier’s sales of goods must not be excluded from the refund scheme, as determined by the Authority; the retailer must submit a request to participate in the Scheme as determined by the FTA; and finally, the retailer must meet the financial credit requirements specified by the system operator and be committed to submitting Tax Returns and paying due taxes regularly.

    FTA sets requirements for recovering tax on entertainment services for employees

    date: 20180924

    Organized By: WAM/Rola Alghoul/MOHD AAMIR

    External URL: http://wam.ae/en/details/1395302709797

    The Federal Tax Authority, FTA, has determined the “Entertainment Services” supplied to employees, for which registered businesses cannot recover the taxes they incurred, explaining that these are mainly the expenses associated with activities to entertain personnel, such as staff parties that are free to attend.

    The authority noted that according to Federal Decree-Law No. (8) of 2017 on Value Added Tax, VAT, and its Executive Regulations, VAT incurred on goods or services purchased to be given away to staff free of charge, in order to reward them for long service, should be blocked from recovery (unless the business accounts for a deemed supply). Examples of these gifts include long service awards, retirement gifts, Eid gifts, or gifts for other festivals or special occasions, gifts given on the occasion of a wedding or birth of a child; employee of the month gifts, or a dinner to reward service.

    UAE VAT boosts revenue base and could raise 1.7% of GDP

    date: 20180919

    Organized By: Sarah Townsend

    External URL: https://www.thenational.ae/business/economy/uae-vat-boosts-revenue-base-and-could-raise-1-7-of-gdp-says-moody-s-1.771813

    The introduction of VAT in the UAE may raise up to 1.7 per cent of the country’s gross domestic product, the rating agency Moody’s said.

    “The implementation of VAT in the UAE marks a positive step towards revenue diversification,” said Thaddeus Best, a Moody’s analyst and co-author of the report.

    The UAE’s 5 per cent VAT on goods and services introduced on January 1, may raise up to Dh24 billion per year in additional revenues for the country although take-up is likely to be lower in the first few years, Mr Best said.

    Under VAT rules, the federal government will retain 30 per cent of the revenues, with the rest distributed across the emirates, according to an yet to be announced sharing formula.

    “Depending on the structure of the formula, it could potentially have redistributive effects for the less wealthy emirates such as Sharjah,” the report said. However, this would be an indirect outcome, it added.

    VAT implementation has had only a “modest” impact on inflation, the agency said and any inflationary impact on household purchasing power has been mitigated by zero-rated and exempt items (such as certain educational, healthcare and transport services in the country as well as the first sale or rent of residential buildings), and by deflationary trends in the real estate market.

    5% VAT 'a starting point' for GCC, says banking chief

    date: 20180918

    Organized By: By Imogen Lillywhite, ZAWYA

    External URL: https://www.zawya.com/mena/en/story/5_VAT_a_starting_point_for_GCC_says_banking_chief-ZAWYA20180918030447/

    The 10th MENA CFO conference heard that VAT violators are being censured, with 3,000 offences recorded in Saudi Arabia in the first two months of 2018.

    Gulf Cooperation Council (GCC) states could see higher rates of value-added tax (VAT) in the future, with the current five percent rate applied in the United Arab Emirates (UAE) and Saudi Arabia seen as a ‘starting point’, according to one UAE banking executive.

    Pointing out that he was speaking in a personal capacity rather than for his employer, Emirates NBD, the bank’s group financial controller, Asim Rashid, said: “My personal view is that five percent is a starting point. The governance and administration of VAT is not cheap.

    Dubai Chamber workshop familiarises companies with VAT refund scheme for tourists

    date: 20180920

    Organized By: MOHD AAMIR

    External URL: http://wam.ae/en/details/1395302709143

    The Dubai Chamber of Commerce and Industry recently hosted a workshop aimed to familiarise retailers and members of the business community with the UAE’s new Value-Added Tax, VAT, refund scheme for tourists.

    The workshop, hosted at Dubai Chamber’s premises, was organised by the Federal Tax Authority, FTA, in cooperation with Planet, the Tourist Refund operator for the tourist refund scheme which will be rolled out in the last quarter of 2018.

    More than 250 members of the business community attended the workshop where participants were briefed on the steps, processes and procedures associated with registering under the UAE’s new VAT refund scheme for tourists.

    Registration for ‘Tax Refunds for Tourists scheme’ is now open

    date: 20180919

    Committed to ensuring the proper implementation of the UAE’s tax laws, maintaining the country’s Reputation as a pioneer and strengthening its international competitiveness, the Federal Tax Authority  (FTA) has announced that registration for the Tax Refunds for Tourist Scheme is now open for retailers, As per Cabinet Decision No.(41) of 2018 on introducing the Tax Refunds for Tourists Scheme. Those wishing to register for the Scheme, operated by Planet on behalf of the FTA, must meet a set of Specific terms and conditions.

    Terms and conditions for Retailers to Register:

    1. Be registered with the Federal tax Authority and hold a valid Tax Registration Number for VAT Purposes.
    2. Be a seller of goods that are not excluded from refund as determined by the Federal Tax Authority.
    3. Submit an application to join the scheme as determined by the Federal Tax Authority and be Subject to a credit check by the operator.
    4. Regularly submit VAT returns and settle payable tax to the FTA.

    Retailers who meet the necessary requirements can register through the retailers’ Registration link: https://www.planetpayment.ae

    They can also register through the FTA website www.tax.gov.ae by clicking on: Paying Tax >> VAT >>Tourist Refund Scheme

     

    After gold, this sector may get VAT exemption

    date: 20180911

    Organized By: Waheed Abbas

    External URL: https://www.khaleejtimes.com/business/local/after-gold-and-jewellery-this-sector-may-get-vat-exemption--

    Following UAE’s decision to exempt gold and precious metals from the value-added tax, the maritime industry could also get a relief as the Federal Transport Authority is negotiating VAT exemption with the Federal Tax Authority, confirmed a senior official on Monday.

    Hessa Al Malek, executive director of maritime transport at UAE’s Federal Transport Authority, said the meeting with the Federal Tax Authority will be held soon to discuss the issue.

    Firms in UAE's designated zones: Are all your supplies VAT-free?

    date: 20180909

    Organized By: Nimish Goel

    External URL: https://www.khaleejtimes.com/business/vat-in-uae/firms-in-uaes-designated-zones-are-all-your-supplies-vat-free

    The basic tenet of identifying and listing some of the free zones in the UAE as ‘designated zones’ under the country’s’s value-added tax legislation was to make them VAT free and consequently, be consistent with the tradition of keeping free zones typically free from taxes.

    Though in intent and spirit it appears the legislation has achieved the objective, in practice, there are still instances and activities that result in the application of VAT on transactions within the designated zones. Consequently, the companies can blindly not apply VAT on any transaction it enters within the designated zones.

    VAT refund for UAE tourists to start in November

    date: 20180905

    Organized By: Waheed Abbas/Dubai

    External URL: https://www.khaleejtimes.com/business/vat-in-uae/vat-refund-for/-uae-tourists-to-start-in-november

    The UAE’s Federal Tax Authority has appointed Planet as its exclusive tax refund operator for the Tourist Refund Scheme which will be rolled out in November 2018.

    “The FTA has announced that from November 2018, eligible tourists will be able to receive a proportion of the VAT as a refund when they shop at registered stores,” said an invitation sent to retailers and tax consultancies across the UAE by the FTA and the Dubai Chamber of Commerce and Industry to brief them about how to register for the tourist refund scheme.

    “We wish to invite you to an event organised by the FTA and their exclusive tax refund operator, Planet, who will be operating the Tourist Refund Scheme,” said the invite.

    VAT will attract more global investors to UAE realty

    date: 20180821

    Organized By: Ryan Fansa/Trend Tracker/Dubai

    External URL: https://www.khaleejtimes.com/vat-will-attract-more-global-investors-to-uae-realty

    When value-added tax (VAT) was introduced in the UAE and Saudi Arabia on January 1, 2018, initially stakeholders were wary on the potential impact of the new tax policy on the economy.

    A study conducted by Alliance Business Centers Network said that the UAE would be least affected by the imposition of VAT because it is one of the lowest globally compared to countries such as the UK, Switzerland, Germany, Mexico, South Africa and Australia. The study revealed that the VAT in UK and France was 20 percent, which is substantially higher than the five percent implemented in the UAE and Saudi Arabia.

    With the adoption of VAT in the real estate sector, investors and stakeholders are weighing the impact on market valuations. According to Deloitte, in the UAE, commercial property is clustered in the taxable bracket and therefore the costs of buying or leasing such property are likely to increase.

    Moreover, stakeholders in the UAE real estate sector see the pricing of ancillary services such as brokerage, maintenance services, car parking, facility management and property management increase as such services will be subject to VAT and do not fall within the exemption for rental of residential real estate, even where provided in connection with a residential contract.

    Gold jewellery demand down by 24% in the UAE

    date: 20180812

    Organized By: Zawya-Yasmine Saleh

    External URL: https://www.zawya.com/mena/en/story/Gold_Focus_VAT_drags_gold_jewellery_demand_down_in_the_UAE__World_Gold_Council-ZAWYA20180812104025/

    Demand for gold jewellery fell by 24 percent in the United Arab Emirates year-on-year in the second quarter of the year, according to a report by the World Gold Council (WGC), mainly due to the introduction of a new 5 percent value-added tax (VAT) in January that was applied to a variety of goods and services, including gold jewellery.

    “VAT in both UAE and Saudi Arabia has played an important part in the softness this year,” Alistair Hewitt, United Kingdom-based director of market intelligence in the WGC told Zawya in an email interview last Monday. The World Gold Council (WGC) said in its Q2 2018 report that gold demand fell by 10 percent year-on-year in Saudi Arabia, where VAT was also introduced in January.

    UAE gold jewelry demand fell by 23 percent in the first quarter year-one year, while demand rose 16 percent in the fourth quarter of last year ahead of the introduction of VAT, according to previous reports published by the WGC.

    Federal Tax Authority launches first phase of ‘Tax Clinic’ in Ras al-Khaimah

    date: 20180813

    Organized By: Tariq alfaham

    External URL: http://wam.ae/en/details/1395302703494

    The Federal Tax Authority (FTA) has officially launched phase one of its “Tax Clinic” initiative, which seeks to maintain direct and constant communication with taxable businesses.

    For three months, the campaign will cover all seven emirates to raise tax awareness across the country, urging taxable businesses to register with the Authority and promoting compliance with Tax Return requirements and the timely payment of due taxes. Phase one will take place in Ras al-Khaimah over the course of three days – from 7:30 am to 2:30 pm – until August 14, 2018, at the headquarters of Ras al-Khaimah’s Department of Economic Development (RAK-DED) and Ras al-Khaimah Economic Zone (RAKEZ).

    A press statement issued today explained that the “Tax Clinic” campaign will be organised as a collaboration between the Federal Tax Authority and the departments of economic development and municipalities in all emirates. Two teams of analysts and specialists from the FTA’s Registration, Tax Returns and Taxpayers Services will go on an extensive tour, which includes several meetings and an interactive seminar in each individual emirate, with taxable businesses that have not yet registered in the tax system or that have fallen behind on submitting their Tax Returns and settling their due taxes – particularly, small and medium enterprises (SMEs).

    FTA launches ‘Tax Clinic’ to promote compliance with tax return submissions

    date: 20180808

    Organized By: Rola Alghoul/MOHD AAMIR

    External URL: http://wam.ae/en/details/1395302702832

    The Federal Tax Authority, FTA, has announced a new campaign as part of its efforts to communicate directly and consistently with businesses.

    The “Tax Clinic” seeks to increase the number of registered taxable businesses and promote compliance with the timely submission of tax returns and payment of due taxes.

    The campaign kicks off on 12th August, 2018, in Ras al-Khaimah, before moving on to Fujairah and then the rest of the emirates for a duration of three months, where representatives from the authority will be present at the clinic to answer taxpayer queries regarding registration with the FTA and other tax obligations. They will encourage those who are yet to register for Value Added Tax, VAT, to promptly do so in order to avoid administrative penalties. The experts will also introduce attendees to the procedures required for submitting accurate tax returns and settling due taxes.

    Half-year review: VAT in real estate

    date: 20180806

    Organized By: Jobannie C. Tabada

    External URL: https://gulfnews.com/business/property/half-year-review-vat-in-real-estate-1.2262603

    Six months into its implementation in the UAE, the 5 per cent value-added tax (VAT) has generally had a limited impact on real estate values, if average market prices in the second quarter are anything to go by. Villa and apartment sales prices retreated by an average 4 per cent over the quarter, while apartment and villa rents were down 3 per cent and 2 per cent respectively, according to Asteco’s second-quarter market report.
    Various factors contribute to VAT’s muted impact on real estate, but analysts agree prevailing market rates have in a way helped belie fears of a tax backlash.

    Vat gets vote of confidence

    date: 20180806

    Organized By: Waheed Abbas

    External URL: https://www.khaleejtimes.com/vat-gets-vote-of-confidence

    Companies in the UAE and Saudi Arabia have given a vote of confidence to the implementation of VAT with 65 per cent of them having successfully filed their first VAT returns by April 2018.

    According to the Association of Chartered Certified Accountants (Acca) and Thomson Reuters’ VAT Return Filing and Compliance survey conducted in April, only 18 per cent of companies had found filing their first VAT returns “challenging” and eight per cent “very challenging”.

    Pierre Arman, market development leader for tax and accounting at Thomson Reuters, said that at the time of the survey in April, a lot of companies’ first VAT return deadline had been pushed by the Federal Tax Authority by one or two months, hence, about a third of firms did not file a VAT return at the time.

    FTA latest clarification on Entertainment and Employee related expenses

    date: 20180729

    Organized By: FTA

    Issue

    Article 53 of Cabinet Decision No. (52) of 2017 on the Executive Regulation of the Federal Decree-Law No. (8) of 2017 on Value Added Tax (“VAT Executive Regulations”) stipulates input tax which is nonrecoverable by businesses (which, in most cases, will mean Taxable Persons).

    There are a number of circumstances in which businesses have sought clarity over the definition of ‘entertainment’ for the purposes of the input tax restriction, and in particular what should constitute entertainment of staff or business contacts as opposed to incidental business-related expenses which would be recoverable under normal VAT
    rules.

    Summary
    This Public Clarification explains the application of Article 53 of the VAT Executive Regulations with regards to VAT which is non-recoverable in respect of entertainment or hospitality of any kind.

    VAT incurred on any costs which are used for a genuine business purpose, or which are incidental to a business purpose e.g. food and drink provided during a business meeting, shall be recoverable (subject to normal VAT recovery rules). However, where the hospitality provided becomes an end in itself and could be construed as the purpose for attending an event, such costs will be considered to be entertainment in nature and the VAT incurred shall not be recoverable. More information on how to define whether costs are incidental to a business purpose, or considered to be an end in themselves, is provided below.

    Click here to know more.

    FTA classifies ‘eligible goods’ for calculating VAT

    date: 20180725

    Organized By: Mohd Aamir

    External URL: http://wam.ae/en/details/1395302700713

    The Federal Tax Authority, FTA, has determined three main categories of “eligible goods” for calculating Value Added Tax, VAT, on the basis of the profit margin scheme.

    These are second-hand goods, meaning tangible movable property that is suitable for further use as it is or after repair; antiques, i.e. goods that are over 50 years old; and collectors’ items, such as stamps, coins, currency and other pieces of scientific, historical or archaeological interest.

    The authority asserted that only those goods, which had been subject to VAT before the supply in question, may be subject to the profit margin scheme. The profit margin is defined as the difference between the buying and selling price of an item and is inclusive of taxes.

    The announcement was made in a “Public Clarification” about eligible goods under the profit margin scheme, as per Federal Decree-Law No. (8) on VAT. The FTA offers the clarifications service through its website.

    The Director-General of FTA, Khalid Ali Al Bustani, asserted that the new service was launched as part of the authority’s efforts to empower businesses and the general public, and educate them about their rights, obligations and the UAE tax system.

    “As part of its comprehensive awareness campaign targeting all segments of society, the FTA published a series of guides that cover all legislative and executive aspects of the UAE tax system, as well as e-learning programmes and infographics,” he said, noting that these efforts reflect the FTA’s commitment to transparency and accuracy in implementing tax procedures.

    He called on businesses and experts to take advantage of the Public Clarifications service on the authority’s website, which complements the other guides and publications, and help further raise awareness of the UAE tax system and related procedures and laws.

    In a press statement issued on Wednesday, the FTA called on registered businesses to carefully verify eligible goods for the profit margin scheme, reiterating that only those goods which have previously been subject to VAT before the supply in question, may be subject to the scheme.

    As a result, stock on hand of used goods that were acquired prior to the effective date of Federal Decree-Law No. (8) on VAT, or goods that have not previously been subject to VAT for other reasons, are not eligible to be sold under the profit margin scheme. VAT is, therefore, due on the full selling price of these goods.

    UAE banks now able to charge VAT on fees

    date: 20180714

    Organized By: Gillian Duncan

    External URL: https://www.thenational.ae/business/banking/uae-banks-now-able-to-charge-vat-on-fees-1.750121

    Banks have started charging VAT on various services offered, following a June circular from the Central Bank of UAE, which rescinded a previous notice to the contrary.

    In December, the Central Bank issued a notice informing banks that they should absorb VAT charges until they received further instructions.

    In June last month, an amendment was issued, detailing 43 new caps on fees and commission charged on consumer-related banking services. The circular specified that “all fees set out in this amendment are exclusive of VAT charges.”

    Tina Hsieh, senior manager for indirect tax at global consultancy PricewaterhouseCoopers, said banks will now revise their fees and commissions, publishing any revisions in their schedule of charges.

    “To that end, retail customers, for example, will be paying VAT in addition to the fees or commissions charged by banks,” she added.

    The December notice seemed to oppose the understanding of many banks at the time, according to PwC, “where the interpretation is that charging VAT on their (maximum) fees and commissions is not an increase in fee but rather is a levy of tax on behalf of the Federal Tax Authority”.

    However, the Central Bank clarified the issue in the circular issued last month, giving banks the go-ahead to charge VAT on fees to individuals and companies.

    “The new amendment which is effective as of July 1 includes both individuals and entities. Both will be charged a 5 per cent VAT on all fees and bank services with no exception,” said Abdul Aziz Al Ghurair, chairman of UAE Banks Federation in an interview with Al Bayan Economic.

    VAT regulations maintain real estate investment competitiveness

    date: 20180718

    Organized By: WAM - Nour Salman

    External URL: http://wam.ae/en/details/1395302699470

    The Federal Tax Authority, FTA, has called on persons dealing with commercial real estate to apply the basic Value Added Tax, VAT, rate of five percent on all sales and rent of such properties, urging buyers to pay the due VAT before proceeding with the transfer of ownership.

    In a press statement issued today, the FTA stressed that tax laws had specifically aimed to provide a suitable environment for the continued growth and prosperity of the real estate sector – one of the most important economic sectors in the government’s plans to diversify sources of income, and one of the most attractive sectors for investors.

    “With the exception of selling unrented commercial property and rental contracts for commercial units, all other property is either not subject to or exempt from the five percent VAT rate on businesses,” Al Bustani noted, adding that rented commercial property is not considered a supply when sold to Taxable Persons.

    The Authority went on to explain that the sale of unrented commercial properties, or off-plan selling of commercial properties, is subject to five percent VAT, as is the rental of commercial property. However, taxes paid on the property’s expenses during a given rent period can be recovered through the Tax Return of the tenant if he/she is registered and entitled to a refund. It is also possible to recover the entirety of taxes incurred on construction that is purchased according to the capital assets system if the cost of the property is more than five million dirhams.

    FTA: Electronic System to Return VAT to Tourists Entering Final Preparation Stages

    date: 20180714

    Organized By: WAM - Tariq alfaham

    External URL: http://wam.ae/en/details/1395302698859

    The Cabinet Decision to implement a system that returns Value Added Tax (VAT) to tourists will cement the UAE’s status as a premier global tourist destination, asserted the Federal Tax Authority (FTA).

    In a press statement issued today, the Authority explained that the Cabinet Decision has set clear standards branded with transparency and accuracy in returning VAT refunds to tourists visiting the UAE.

    The Authority revealed that the project is nearing its final preparation stages, where an advanced system will be put in place to corresponds with international best practices. The system relies on an advanced integrated digital system to set up a direct connection with points of sale, as well as with all UAE ports of entry, allowing the global operator to coordinate among retailers registered with the FTA, and enable tourists to submit refund requests for their purchases.

    FTA Director General Khalid Ali Al Bustani asserted that the Cabinet Decision to implement a system that returns VAT to tourists is in line with the forward-thinking vision of the UAE’s wise leadership to diversify the national economy and promote all economic sectors to increase their contribution to the Gross Domestic Product (GDP), including the country’s vibrant and promising tourism sector.

    VAT refund decision strengthens Abu Dhabi as ‘destination of distinction,’ says Ghobash

    date: 20180711

    Organized By: WAM - Nour Salman

    External URL: http://wam.ae/en/details/1395302698542

    Following the UAE Cabinet decision to implement the value added tax refund system for tourists, Saif Saeed Ghobash, Under-Secretary of DCT Abu Dhabi, said that the decision will provide “further impetus” to Abu Dhabi’s strategy to position the emirate as “a visitor-friendly destination of distinction.”

    In a statement, Ghobash added, “The UAE in general, and Abu Dhabi specifically, will now have this added significant attraction to all types of tourists and business travellers, reinforcing the emirate’s position as a ‘go-to’ destination and further boosting potential visitor numbers.

    “This new directive in is line with the UAE’s efforts to implement an efficient tax system in the emirates. It will directly support the growth of our tourism sector.”

    “It will also work in concert with the recently announced reduction in tourism and municipality fees, which means that accommodation costs will be reduced across the emirate. Together, these directives strengthen Abu Dhabi’s position as a destination that affords the warmest of Arabian welcomes to the world,” he continued.

    Commenting on the announcement, Sultan Al Mutawa Al Dhaheri, Executive Director of the Tourism Sector at the Department, said, “The announcement of this VAT refund directive is great news for visitors planning a trip to explore our extraordinary emirate. Already firmly established as an attractive and unique distinction, this will positively impact our global appeal. Future visitors will now feel the direct impact of this decision in their travel budgets, meaning they can potentially stay longer, explore further and experience more while they are here. Our extensive touristic and cultural offerings are now even more affordable and accessible than before.

    “The tourism sector in Abu Dhabi has witnessed a significant growth in terms of visitors and offerings, in line with the development of leisure and cultural attractions in the capital,” Al Dhaheri said, adding that this new directive will guarantee “steady growth rates, especially with this year’s promising results thus far.”

    “Tourists and visitors will be encouraged to stay in Abu Dhabi for longer periods, enjoy more tourist experiences and benefit from attractive offers with wide choices and competitive prices,” he concluded.

    UAE Cabinet approves VAT refund for tourists starting Q4 2018

    date: 20180711

    Organized By: WAM - Nour Salman/Rasha Abubaker

    External URL: http://wam.ae/en/details/1395302698458

    The UAE Cabinet has adopted a decision to implement the value added tax refund system for tourists, which will integrate between retail outlets with tax refund points in line with the government’s efforts to achieve the efficient implementation of the tax system in the UAE.

    According to a press statement, the new tax refund system supports the growth of the tourism sector in the UAE and maintain its position as a global destination for tourists. “The system will be implemented beginning the fourth quarter of 2018 in cooperation with an international specialised company in tax recovery services,” it added.

    Non-resident tourists may refund VAT on purchases made at participating retailers, provided that such goods are not exempt from the tax system, through designated refund outlets.

    The tourism sector contributes directly to the local economy. The number of passengers through the UAE’s airports reached 123 million passengers in 207, and the total contribution of the tourism sector to the country’s GDP reached 11.3 percent in 2017, equivalent to AED154.1 billion.

    FTA issues more clarification on labour accommodation

    date: 20180705

    Organized By: Waheed Abbas - Khaleej Times

    External URL: https://www.khaleejtimes.com/business/local/More-relief-as-three-UAE-free-zones-are-out-of-VAT-scope--

    FTA issued clarification about the issue of the applicability of five percent VAT on labour accommodations.

    “In the initial period, there was confusion whether labour accommodation is chargeable or not. Subsequently, it was clarified by the FTA that labour accommodation is treated as residential property and hence exempt from VAT. In essence, where additional services such as cleaning, Internet etc. are provided as part of the composite labour accommodation service, there is a single pricing and it is provided by the same supplier, it will be treated as residential property and will be exempt from VAT,” said Girish Chand, director at MCA Management Consultants.

    He also pointed out that where the labour accommodation is a mixed supply consisting of various elements and it is charged separately, the tax treatment of each component will have to be determined separately.

    http://www.allaboutvat.com/wp-content/uploads/Labour-Accommodation.pdf

    FTA updates its e-Services to facilitate work of customs clearance companies

    date: 20180702

    Organized By: WAM

    External URL: http://wam.ae/en/details/1395302697123

    The Federal Tax Authority, FTA, has revealed details of updates to its electronic services, e-Services, which have been designed to provide a greater number of facilities for customs clearance companies that operate under its approval.

    The authority says that the new developments have been introduced to simplify registration procedures and enable easy submission of tax returns.

    The FTA’s e-Services updates were announced during the third seminar, organised by the authority in Dubai, for freight forwarders and customs clearance companies. The event was held to highlight the role of the authority’s e-Services in facilitating the work of shipping and clearance companies and ensuring the UAE’s smooth import and export trade.

    Attended by about 100 stakeholders from various shipping, customs clearance and logistics organisations, the seminar saw a team of specialists from the FTA’s Taxpayers’ Services Department review the electronic processes carried out by the authority to facilitate the work of this important sector and brief the participants on the steps it has taken to overcome any obstacles that might be encountered.

    Khalid Ali Al Bustani, Director-General of the FTA, said that the seminar formed part of the authority’s plans to raise the level of tax awareness among business sectors and ensure continuous communication with employees across all economic activities. He highlighted that the session was important to inform stakeholders about the latest tax procedures.

    More relief as three UAE free zones are out of VAT scope

    date: 20180705

    Organized By: Waheed Abbas - Khaleej Times

    External URL: https://www.khaleejtimes.com/business/local/More-relief-as-three-UAE-free-zones-are-out-of-VAT-scope--

    The UAE’s Federal Tax Authority (FTA) has added three new free zones to the list of designated zones that will be out of the five percent VAT scope imposed earlier this year.

    The new addition sees the total designated zones increasing to 23 across the UAE.

    Federal Decree Law No. (8) of 2017 on VAT specifies that any area meeting certain conditions and mentioned in the Cabinet decision is termed as designated zone for VAT purposes and should be treated as being outside the state for VAT purposes.

    According to the FTA, the newly-added free zones are Al Ain International Airport Free Zone, Al Bateen Executive Airport Free Zone in Abu Dhabi, and International Humanitarian City – Jebel Ali in Dubai. The treatment of these areas as designated zones was effective from June 18, 2018.

    Thomas Vanhee, partner at Aurifer Middle East Tax, said businesses that have transactions in the new designated zones will be relieved that no VAT applies on the supplies of goods inside the designated zones with some exceptions.

    “Some businesses in these designated zones may potentially now deregister for VAT purposes. It will be important for them to assess again their transactions in the zone and determine which ones are actually subject to VAT and which ones are not. Although this constitutes an important relief, the transactions with designated zones can be complex,” said Vanhee.

    Currently, eight designated zones are located in Dubai, five in Abu Dhabi, three in Ras Al Khaimah, two each in Fujairah, Sharjah and Umm Al Quwain, and one in Ajman.

    Lessons learned from the UAE and Saudi Arabia’s roll-out of VAT

    date: 20180627

    Organized By: MEED - Michael Camburn and Bruce Hamilton

    External URL: https://www.meed.com/lessons-learned-uae-saudi-arabias-roll-vat/

    With the entire supply chain affected by VAT, firms cannot start its implementation soon enough
    Two of the six GCC states, the UAE and Saudi Arabia, introduced VAT on 1 January 2018. With Bahrain, Qatar, Kuwait and Oman in the process of organising their VAT implementation, the experiences in the UAE and Saudi Arabia provide an indication of issues that businesses in the GCC may face when VAT is rolled out across the rest of the region.

    Main challenges
    One overriding challenge observed in both the UAE and Saudi Arabia was that businesses typically underestimated the scope and level of effort required to implement VAT. The combination of dealing with a new tax, coupled with the significant business and systems changes that were required, put a lot of pressure on companies to adapt.

    To their credit, most organisations got there in the end, but as our survey shows, 77 percent felt that they could have started the process at least three months earlier.

    Our survey also revealed that 90 percent of those in the consumer business sector found it took longer than three months to implement, and more concerning, all in the technology sector said it took them longer than six months.

    Creating, drafting and implementing tax law is a challenging task. Even though the intention to implement VAT was announced more than a year before the go-live date, detailed legislation was understandably and for a variety of reasons released relatively late in the process in both countries. Both the UAE and Saudi Arabia took a considered view that good tax law cannot be rushed.

    Unfortunately, a number of companies were hesitant to commence implementation projects until after the release of the VAT legislation and the timeline for registration for VAT purposes was announced, leading to truncated implementation and delays in the commencement of projects.

    7 Ways to Avoid VAT Penalties in UAE

    date: 20180621

    Organized By: Al Bawaba Business

    External URL: https://www.albawaba.com/business/7-ways-avoid-vat-penalties-uae-1148550

    The United Arab Emirates and the Kingdom of Saudi Arabia began the implementation of Value Added Tax (VAT) on January 1, 2018 at the rate of five percent, while other GCC countries are expected to follow in the near future.

    As VAT is new to the region, it is imperative for business owners to be aware and comply with the new regulations in order to avoid stiff penalties which could be as high as AED 50,000.

    Seven tips for UAE businesses to avoid financial penalties that may be imposed due to violations, errors or incorrect record-keeping include:

    Register for VAT
    Every company offering taxable goods or services with an annual revenue of AED 367,000 and above is required to register for VAT. However, those with an annual revenue between AED 200,000 and AED 367,000 will have the option to register.

    Record all transactions
    The law requires businesses that meet the minimum annual turnover (as evidenced through financial records) to register and keep a record of all their business income, costs and other associated VAT charges, whilst ensuring all records are up to date.

    Collect VAT
    Every business essentially plays the role of a tax agent, collecting on behalf of the government VAT on goods and services purchased by their consumers.

    File VAT return
    VAT returns must be filed monthly if your company has an annual turnover above AED 150 million. Businesses with revenue below that level must file quarterly.

    Understand zero rates and exempt suppliers
    The FTA has exempted some businesses in priority sectors from tax. Being a zero-rated supplier means that the goods being supplied are still VAT taxable, but at the rate of zero percent.

    Reverse charges
    Reverse charges are the amount of VAT one would have paid on goods or services if they were purchased in the UAE. These charges apply when goods and services are imported from outside the GCC.

    Get the basics right
    A tax invoice must be issued within 14 days of the date of supply. It is mandatory for a tax invoice to include the name, address and tax registration (TRN) of the registrant making the supply.

    Businesses encouraged to file VAT returns and make payments on time

    date: 20180627

    Organized By: Thomson Reuters - Zawya

    External URL: https://www.zawya.com/mena/en/story/Businesses_encouraged_to_file_VAT_returns_and_make_payments_on_time__Al_Dhaheri_Jones__Clark-ZAWYA20180627110344/

    As businesses across the UAE gear up to file Value Added Tax (VAT) returns on June 28th 2018, Al Dhaheri Jones & Clark (ADJC) provides clarity on process and the importance of filing returns.

    A VAT return is the formal statement of a registered entity’s VAT statement together with its supporting documentation and VAT payment for a specified tax period. These VAT returns are important as they contain the records of the tax paid by the users in a given period. It is a formal document that provides proof that the registered party has paid their VAT obligation.

    “Filing returns on time is crucial for your business. A delay can not only cause a huge amount of stress, but your entire business could be under threat should you fail to comply. While non-compliance can lead to penalties, it also results in backdated payments, investigation by the authority and black-listing. As such, knowing the procedure and deadlines for filing and payment of VAT returns is significantly important to lower the chances of incurring VAT fines and penalties in the UAE,” said Mohammed Fathy, General Manager of Al Dhaheri Jones & Clark.

    In the UAE, the administrative penalty for late registration is Dhs20,000 ($5,445). Other fines include Dhs15,000 ($4,084) for failing to display prices inclusive of VAT, Dhs3,000 ($817) for a first incorrect tax filing and Dhs5,000 ($1,361) for incorrect filings thereafter. Failure to submit a deregistration application will result in a fine of Dhs10,000 ($2,723). A first time tax offence will result in a Dhs1,000 ($272) fine and repeat offences within two years Dhs2,000 ($545).

    “The Federal Tax Authority (FTA) in the UAE has given businesses enough time to comprehend and follow the legislative rules to file returns. While most businesses are now ready to file returns on time, we suggest that it is best to file returns and make payments before the deadline to ensure that the payments processed through banks reaches FTA on time,” added Mohammed Fathy.

    Cut in hotel tax to help UAE's tourism industry compete with Europe

    date: 20180619

    Organized By: The National - Patrick Ryan

    External URL: https://www.thenational.ae/uae/cut-in-hotel-tax-to-help-uae-s-tourism-industry-compete-with-europe-1.741974

    Restaurants in Abu Dhabi and Dubai will be bolstered by the recent drop in municipality fees.

    That is according to Jennifer Pettinger-Haines, one of the founding members of the Global Restaurant Investment Forum, an international conference that brings together some of the leading investors from the international world of restaurants.

    The reduction in municipality fees comes as both Dubai and Abu Dhabi try to market themselves as year-round holiday destinations, instead of their more traditional standing as winter sun destinations.

    Ms. Pettinger-Haines, who is also a member of the Dubai Restaurant Industry Think Tank, was speaking in the wake of the municipality tax cuts announced last week in Abu Dhabi and Dubai.
    “The recent announcement that municipality fees on sales at hotel facilities are going to be cut from 10 per cent to 7 per cent is great news for the industry, it was made all the better when we heard that Abu Dhabi was also taking measures to reduce tourism fees from 6 per cent to 3-and-a-half per cent and municipality fees to 2 per cent,” she said.

    “These are very positive and significant steps in support of the UAE’s hospitality industry and come at a challenging time for many operators, especially as we head into the summer period. Only time will tell what the true impact will be, but it is a very positive gesture which will offer enhanced value to guests.”

    Website now allows taxable persons to connect directly with accredited tax agents

    date: 20180617

    Organized By: WAM

    External URL: http://wam.ae/en/details/1395302694988

    The Federal Tax Authority (FTA) has developed its e-Services to include new features allowing Taxable Persons to link their accounts with an accredited Tax Agency, authorising it to carry out registration procedures, submit tax returns, and complete tax transactions on behalf of the Taxable Person, who is kept posted with real-time updates.

    In a press statement issued today, the FTA explained that this update was introduced to answer requests submitted by Taxable Persons and businesses registered with the Authority; they reflect FTA’s commitment to flexibility and constructive interaction with the business community as a means to establish an environment that encourages voluntary auto-compliance with tax procedures.

    The new features allow Taxable Persons to nominate one or more persons as their Tax Agents, who would then represent them in all their transactions with the Authority, and help them comply with their tax obligations and exercise their rights. A Taxable Person can link their account on eservices.tax.gov.ae with that of an accredited Tax Agency with a simple procedure outlined on the FTA website.

    “The Federal Tax Authority is committed to continuously developing its services to ensure flexibility and enable businesses to seamlessly implement the tax system and avoid any disruptions to their activities,” said FTA Director General Khalid Ali Al Bustani, explaining that: “An FTA-accredited Tax Agent can be appointed by any natural or legal person to represent them with the Authority, and help them comply with their tax obligations and exercise their rights.”

    Federal Tax Authority receives businesses’ VAT returns for tax period ending May

    date: 20180618

    Organized By: WAM

    External URL: http://wam.ae/en/details/1395302695111

    The Federal Tax Authority, FTA, announced that it has started receiving tax returns for the tax period ending 31st May, 2018, from businesses registered for Value Added Tax, VAT.

    These returns were submitted via the e-Services portal on the authority’s official website, which enables easy and accurate tax submissions.

    In a press statement issued on Monday, the FTA reaffirmed that 28th June is the deadline for the submission of tax returns for the tax period ending on 31st May, 2018, calling on all registered businesses to comply with the requirement and settle their payable taxes within the specified period to ensure payment with the FTA before 28th June to avoid financial penalties.

    Khalid Ali Al Bustani, Director-General of the FTA, said that the authority has simplified the procedures of submitting the returns and paying due taxes through the electronic services available on the FTA’s official website, which was designed according to the best international standards. The site provides various flexible payment options and is the ideal tool to help businesses comply with tax deadlines, he added.

    Al Bustani stressed the need to check the accuracy of all data entered during the submission process and to ensure that the amount owed is transferred to the correct GIBAN number. He added that the responsibility of ensuring that the transfer is made to the correct number is that of the taxable person. He reiterated that the authority is not responsible for following up on the transfer.

    UAE's reform measures are truly bold undertakings

    date: 20180613

    Organized By: Issac John - Khaleej Times

    External URL: https://www.khaleejtimes.com/business/economy/uaes-reform-measures-are-truly-bold-undertakings

    The recent spate of investor-friendly reform initiatives by the UAE government, including 10-year visas for investors and professionals as well as a move to allow 100 per cent foreign business ownership, along with some proactive stimulus packages unveiled by Abu Dhabi and Dubai separately will stir up investor confidence and accelerate the growth of the second largest Arab economy, experts and corporate leaders said.

    Combined, the three-pronged stimulus programmes, undertaken by the federal government and two emirates, will give a major fillip to real estate, construction, information technology, small and medium enterprises sectors. In addition, these bold measures along with the easing of liquidity through the Dh50 billion package announced by Abu Dhabi will help banking and manufacturing sectors while considerably easing pressure on the business community, analysts said.

    They said other critical measures, taken by Dubai, including a one-year freeze on school-fee hikes, waiver of some fees on aviation and real estate transactions, and cutting charges levied on businesses, will help arrest cost of living and doing business.

    Most analysts and corporate leaders believe such bold strategies would help offset the impact of VAT-induced slowdown while reinforcing investor confidence leading to a pick up in foreign direct investments.

    No VAT impact on construction sector in UAE

    date: 20180612

    Organized By: Waheed Abbas - Khaleej Times

    External URL: https://www.khaleejtimes.com/business/real-estate/No-VAT-impact-on-construction-sector-in-UAE

    The UAE’s construction industry has not been impacted by the recent introduction of 5 per cent value-added tax (VAT) and it will witness over 10 per cent expansion in 2018, the second-fastest growth rate in the world, according to industry executives and research reports.

    The industry executives believe that Expo 2020 is not the end for the construction sector. Rather they are pinning hopes on multi-year plans such as Vision 2021 which would drive the industry in the post-Expo 2020 era.

    “I see good potential for the construction sector. I would say VAT has not impacted us that much; however, there is a pressure on cash flow but people are getting used to it,” said Ravi Murthy, chief financial officer, Arabtec Construction.

    Murthy attributed the strong growth potential for the industry to the hosting of Expo 2020 as well as growth in the hospitality and healthcare industries, with a massive inflow of visitors and medical tourists.

    “Dubai has won the bid to host the World Chamber Congress which is coinciding with Expo 2020. More than 14,000 chambers from 100 countries will attend the event. If 10 per cent of those chambers do business, the requirement for hotels, infrastructure, road, entertainment, leisure and shopping is going to grow substantially. The UAE target is half a million medical tourists. As compared to the West, they are in the stage of implementation; there are about 43 hospitals with more than 100 beds, which is not enough to cater to the needs. There is a big potential for healthcare. Today, we have Dh740 billion worth of construction projects under way,” he said.

    Abu Dhabi to introduce 30 per cent alcohol sales tax

    date: 20180612

    Organized By: Gillian Duncan - The National

    External URL: https://www.thenational.ae/uae/abu-dhabi-to-introduce-30-per-cent-alcohol-sales-tax-1.739369

    Abu Dhabi will introduce a 30 per cent tax on alcohol sold in off-licence outlets.

    Retailers have received a circular informing them about the introduction of the new tax.

    The levy will come into force on June 15 after Ramadan, bringing it in line with Dubai, which already imposes a 30 per cent municipality tax on alcohol sold in off-licence outlets.

    A Dh230 fee will also be introduced for special licenses, which enable non-Muslims to purchase alcohol. The licenses were previously free.

    Retailers were informed about the changes, which are being brought in by the Abu Dhabi Department of Culture and Tourism, several weeks ago.

    Many have displayed notices in stores to inform their customers of the changes, and some, such as Spinneys, are offering discounts in the run up to the introduction. The chain is offering a 15 per cent discount on the price of non-promotional items from tomorrow until the end of the month, according to staff at one of its stores.

    News of the 30 per cent hike has been the subject of much discussion on social-media among expatriates – many of whom have said they will be stocking up before June 15.

    FTA urges businesses to pay up VAT dues urgently - Non-compliance will result in penalties

    date: 20180613

    Organized By: Gulf News

    External URL: https://gulfnews.com/business/economy/vat/fta-urges-businesses-to-pay-up-vat-dues-urgently-1.2236385

    Federal Tax Authority (FTA) on Wednesday urged all UAE businesses registered for Value Added Tax (VAT) who missed the deadline for filing their tax returns to pay their tax dues immediately.

    “Respecting the deadline to file tax returns and pay due taxes is a legal responsibility borne by the registered tax person,” FTA said in an advertisement.

    In case of non-compliance with tax payments on deadlines, businesses will be required to pay the estimated taxes along with administrative penalties.

    Violations include the failure of tax registrants to submit the tax return within the timeframe specified in tax law and failure of tax person to settle the payable tax stated in the submitted tax return or tax assessment that was notified.

    Timely stimulus heralds a new dawn for Abu Dhabi economy

    date: 20180607

    Organized By: WAM

    External URL: http://wam.ae/en/details/1395302693407

    A UAE newspaper has said that in a raft of sweeping initiatives which will transform the way we work and live in the capital, two words stand out: together and tomorrow.

    “The AED50 billion stimulus package announced by His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, is as far-reaching as it is wide-ranging and will alter the landscape of Abu Dhabi, whether via help for small businesses, creating jobs or boosting tourism,” said The National in an editorial on Thursday.

    “The four strata of society upon which Abu Dhabi’s economy depends – residents, citizens, tourists and investors – will all benefit from a string of sagacious economic and social measures. This is the boost the emirate’s non-oil sector has been waiting for.

    “The need to re-evaluate the ever-evolving economic landscape made these 10 changes – the latest in a series introduced in recent months across the UAE – necessary, but few could have predicted the scale and speed at which they will be implemented,” it added.

    The paper noted, “This year began with the introduction of VAT; just five months later, the government announced the introduction of 10-year visas and 100 percent foreign ownership of UAE companies. They were followed by a series of social reforms in Abu Dhabi, including AED3bn for neighbourhood facilities, double the number of housing loans and increased civic engagement with a volunteering and social innovation platform. All the changes aim to help residents and citizens feel invested in the future growth of their communities – not simply a diversification from an oil-dependent economy but equally, a diversification from feeling life in the capital is a transient pit-stop.”

    VAT workshop for businesses held in Dubai

    date: 20180611

    Organized By: WAM

    External URL: http://wam.ae/en/details/1395302693992

    Dubai Media City, Dubai Studio City and Dubai Production City have organised a series of workshops for their business partners, aimed at raising awareness about the impact of VAT on the diverse creative community based across the three business parks.

    Held in collaboration with Morison Menon Auditors & Business Advisors, the complimentary Tuesday VAT Clinics are taking place over four weeks, with each exclusive, segment-specific workshop focusing on issues related to the introduction of VAT in January 2018. The series seeks to educate companies in the media sector about current tax rules and regulations, correct VAT implementation, and the maintenance of related records.

    Highlighting important points for businesses to keep in mind when filing VAT returns, the workshops include a VAT impact analysis for each sector. The sessions feature an interactive component that encourages in-depth discussions between speaker and participants, and facilitates a comprehensive understanding of the subject.

    Majed Al Suwaidi, Managing Director of Dubai Media City, Dubai Studio City and Dubai Production City, said, “Our media communities are committed to supporting the next phase of economic diversification in UAE. It is our endeavour at Dubai Media City, Dubai Production City and Dubai Studio City to provide our business partners across the media value chain with access to an enabling industry ecosystem – one that helps them evolve, flourish and build synergies with like-minded community members. The new Tuesday VAT Clinics initiative is a prime example of this approach.”

    After slow first quarter, new car sales start picking up in UAE

    date: 20180605

    Organized By: Waheed Abbas - Khaleej Times

    External URL: https://www.zawya.com/mena/en/story/VAT_Impact_After_slow_first_quarter_new_car_sales_start_picking_up_in_UAE-SNG_118072859/

    Sales of new cars slowed down in the UAE during the first quarter of 2018 following the introduction of five percent value-added tax (VAT) in January. However, industry executives are hopeful of reversing the trend and said sales will pick up in the second half of the year.

    According to automobile distributors in the UAE, new vehicles sales dropped by 10 to 30 percent (depending on the brand) in the first quarter of 2018 due to strong buying in the last quarter of 2017 by nationals and residents prior to implementation of the consumption tax.

    Industry executives are expected to post single-digit growth in new car sales this year due to strong appetite from buyers and introduction of new models in the market. They were of the view that VAT had a one-off initial impact in the first quarter and now both buyers and sellers treat it as an essential part of the deal.

    Axel Dreyer, general manager, Galadari Automobiles Co, distributor of Mazda vehicles in the UAE, agreed that the anticipated drop in volume in the first quarter has become a reality as the fourth quarter of 2017 sales was above expectations due to pre-VAT buying. Hence, the volume in the following month was less.

    “I’m confident that the great offers in the holy month of Ramadan from all brands will stimulate the market again and attract a lot of new car buyers,” Dreyer told Khaleej Times.
    To a question, he said sales of new and pre-owned vehicles were impacted by VAT as buyers have preponed the purchases. For price sensitive pre-owned car customers, it is difficult to digest that they have to pay 5 percent extra on the selling price, although the car is 2-3 years old.

    “I believe after more than 4 months, the customers are familiar with VAT impact on their purchases. At a certain stage, the customer has to decide what is more economical to use the old car with added repair costs or a new car with service package and less running costs,” Dreyer said.

    Negative impact of VAT on UAE, Saudi only short-term – PwC

    date: 20180604

    Organized By: Aarti Nagraj - Gulf Business

    External URL: http://gulfbusiness.com/negative-impact-vat-uae-saudi-short-term-pwc/

    The introduction of value added tax (VAT) in the UAE and Saudi Arabia this year has had a negative impact on their economies in the short term with inflation rising, a new report by consultancy PwC has found.

    Inflation rose to 3 percent year-on-year in Saudi in January, after a year in which consumer prices were largely suffering deflation, with a smaller step up in the UAE to 4.8 percent.

    This compares to very low rates of inflation in the rest of the GCC where VAT is yet to be introduced (below 1 percent in Kuwait, Qatar and Oman).

    The purchasing manager indices (PMIs) for Saudi and the UAE also showed a slump. Saudi had been close to a two-year high in December but dropped in January to a record low of 53 (albeit still above the 50-mark that signals economic expansion).

    UAE, which had been at a record level in December, slipped more gradually, down to 54.8 in March, its second lowest reading in a year.

    However, the implementation of the tax will prove beneficial for regional economies in the longer term, the report added.

    “Although adjustments such as subsidies cuts and the introduction of VAT this year have had short-term negative impacts, they should make the economy more efficient,” the report said, referring to the UAE.

    According to the latest IMF forecasts, the country’s real GDP growth is expected to reach 2 percent in 2018 ( up from an estimated 0.5 percent in 2017) and average 3.1 percent in 2019-23. The deficit is narrowing and is expected to return to a surplus by 2022.

    UAE, Saudi Arabia mobile phone shipments hit by vat

    date: 20180528

    Organized By: Gulf News Technology

    External URL: https://gulfnews.com/business/sectors/technology/uae-saudi-arabia-mobile-phone-shipments-hit-by-vat-1.2228053

    The introduction of value-added tax (VAT) and poor job security have taken a toll on first quarter mobile phone shipments into the UAE and Saudi Arabia.

    According to the latest numbers from research firm International Data Corporation (IDC), total mobile phone shipments into the UAE declined by 14.7 per cent quarter-on-quarter, and 5.4 per cent in Saudi Arabia quarter-on-quarter, while smartphone shipments into the UAE were down 4.6 per cent.

    Nabila PopalNabila Popal, a senior research manager at IDC, said the UAE market was experiencing a significant shift in consumer spending as evidenced by the first-ever cancellation of the spring edition of Gitex Shopper.

    She added that the true impact of this shift could be seen in the independent retail stores of Deira, the traditional trading and commerce centre of Dubai, where shops that were previously impossible to lease are now sitting vacant.

    “Organised mall-based retail chains that focus exclusively on consumer electronics are also struggling. Businesses in Qatar, meanwhile, will continue to suffer from the prevailing political challenges and import embargoes that have already impacted the country’s mobile phone market,” she said.

    “The size of the overall market in Saudi Arabia is expected to decline over the coming years as a direct result of the new expat dependent tax,” said Kafil Merchant, a research analyst at IDC.

    “A significant portion of the local population is expected to leave the country due to the introduction of this levy, with the exodus expected to run into the millions. The full impact remains to be felt, however, as many expatriates are waiting for the school year to end before leaving,” he said.

    The report states that Nokia continues to dominate the vendor landscape for feature phones, garnering 87 per cent share of the overall GCC market in first quarter.

    FTA outlines licensing procedure for exhibition, conference services

    date: 20180530

    Organized By: WAM

    External URL: http://wam.ae/en/details/1395302691934

    The Federal Tax Authority, FTA, has asserted that the Cabinet Decision to refund Value Added Tax, VAT, on services provided at exhibitions and conferences seeks to cement the UAE’s status as a leading destination for local, regional and international forums.

    The Decision supports the UAE leadership’s directives to ease the tax burden on business sectors, and empower them to play an effective role in the country’s sustainable development, the Authority explained.

    In a press statement issued today, the Authority called on businesses providing exhibition and conference services as defined by the Authority to register in the VAT system and acquire a Tax Registration Number, TRN, as well as a licence from the FTA to provide these services according to a set of conditions that allow them to recover taxes on their services.

    Refunds can be claimed for two types of services, the Authority indicated; the first is the grant of the right to access, attend or participate in a conference, while the second is the grant of the right to occupy space for the purpose of conducting a conference or an exhibition.

    The new Decision reflects the widespread awareness around the importance of the dynamic exhibitions and conferences sector, which attracts investors from financial markets around the world. The UAE has become a magnet for investors across all sectors with its robust infrastructure and diversified economy.

    Khalid Ali Al Bustani, FTA Director-General, said, “The Federal Tax Authority is committed to supporting UAE-based businesses to voluntarily and seamlessly comply with tax procedures, making use of the Authority’s advanced electronic systems and avoiding any disruption to their business activities.”

    “Tax legislation in the UAE has helped build a strong collaborative relationship between the FTA and all tax stakeholders, including taxpayers and all relevant government bodies, in an effort to realise the objectives of the tax system in firmly maintaining the UAE’s lead on global competitiveness indexes,” he added.

    Click here to know more

    VAT impact on gold, diamonds to be reduced between registered dealers, says FTA

    date: 20180530

    Organized By: WAM

    External URL: http://wam.ae/en/details/1395302691936

    The Federal Tax Authority, FTA, has asserted that the new Cabinet Decision issued to regulate Value Added Tax, VAT, incurred by gold and diamond dealers registered with the FTA seeks to establish the adequate legislative environment and infrastructure for the gold and diamonds sector to thrive.

    The Decision also improves cash flow among registered suppliers of gold and diamonds, reduces their tax burden, helps them maintain smooth commercial operations, and cements the UAE’s status as a leading global hub for the gold, diamond and jewellery trade sector.

    In a press statement issued today, the Authority noted that the decision only pertains to commercial transactions between registered dealers. As per the reverse charge mechanism, registered dealers shall not charge VAT when supplying another tax registered merchant with gold, diamonds or products where the principal component is of gold or diamonds, as long as the latter intends to resell such products, or use them to manufacture gold, diamonds or products where the principal component is of gold or diamonds. The registered recipient must include such supplies in his tax returns.

    The Cabinet Decision maintains that Taxable Persons are generally entitled to deduct the tax they incur on their inputs in their tax returns; hence registered gold and diamonds recipients can recover the tax they incurred on their purchases in the same tax return in which they calculate their due taxes, thus maintaining liquidity and cash flow.

    Click here to know more

    Federal Tax Authority sets requirements and procedures to refund VAT on new residences for UAE nationals

    date: 20180519

    Organized By: WAM

    External URL: http://wam.ae/en/details/1395302690015

    The Federal Tax Authority (FTA) has set three requirements and procedures for UAE nationals to refund Value Added Tax (VAT) incurred on the new residences.

    The conditions state that in order to refund VAT, applicants must be UAE national; the monetary cost in question must have gone towards financing the construction of a new residence, set to be used exclusively as a residential unit for the applicant and/or their family; and finally, the VAT refund only includes the money spent on establishing the unit, such as the amounts paid as building materials.

    The FTA issued a comprehensive guide that clarifies the VAT refund process, publishing it on its official website. The guide can be viewed on the following link: https://www.tax.gov.ae/ar/pdf/VAT-Refund-Building-New-Residences-by-UAE-Nationals-User-Guide-full.pdf In a press release issued today, the Authority explained that UAE citizens have the right to recover VAT when constructing their own residences. They ought to submit a request to recover the tax incurred on construction costs from the FTA. The request must be submitted within six months from the completion date of the construction project, which precedes the date of occupancy of the building, or the date of issuance of a certificate of completion for the building by the competent authorities, or another date determined by the Federal Tax Authority whatever comes first.

    FTA Director General Khalid Ali Al Bustani said: “The Authority has been providing transparent standards, procedures and mechanisms to ensure seamless procedures for citizens looking to recover Value Added Tax incurred on the construction of new residences. This, in turn, leads to achieving the vision of our wise leadership to develop a modern, stable housing system in the UAE.”

    DED receives 8,166 consumer complaints in Q1, 2018

    date: 20180523

    Organized By: WAM

    External URL: http://wam.ae/en/details/1395302690687

    The Commercial Compliance and Consumer Protection (CCCP) sector in the Department of Economic Development saw a 30 percent increase in consumer complaint during the first quarter (Q1) of 2018 compared to the same period last year as more and more consumers continued to come forward and raise their concerns with the authorities as well as merchants.

    CCCP, while continuing its efforts to enhance the role of DED in consumer protection and reinforcing Dubai’s reputation as a safe shopping destination for residents as well as tourists, received 270 complaints a day on average in a total of 8,166 complaints in first three months of the current year as compared to 6,275 complaints during Q1, 2017.

    The Consumer Protection section in CCCP dealt with 1,007 issues out of which consumer complaints accounted for 81 percent. The rest included 1,062 notes and 779 enquiries received from consumers. Complaints received from inside the UAE accounted for 37 percent and the nationality-wise breakdown of complainants is as follows: India (13 percent), Egypt (10 percent), Saudi Arabia (7 percent) and Jordan (5 percent).

    The services sector had a 33.9 percent share in the total complaints received while 16.7 percent were from the electronics sector, 10.7 percent relating to e-commerce, 7.9 percent regarding automobiles, and 6 percent about car rentals. Textiles and personal items (3.5 percent ), furniture (3.1 percent ), shipping (2.7 percent ), clothing and accessories (2.6 percent ) also featured among the complaints while 10 percent were from various sectors.

    Drop in House Rents Soften VAT Impact in UAE

    date: 20180523

    Organized By: Khaleej Times

    External URL: https://www.albawaba.com/business/drop-house-rents-soften-vat-impact-uae-1135684

    Although the levy of a 5 percent value-added tax (VAT) was expected to affect UAE residents in the form of increased living costs, the reduction in house rents has offset this impact to a great extent.

    While global benchmarks suggest that households should allocate no more than 35 percent of their total monthly income on housing (in the form of either rents or mortgage payments), many families in Dubai currently spend over 40 percent of their combined income on rents.

    “Tenants are definitely experiencing increasing higher living costs. It is, therefore, good news that rents continue to fall [by around 10 percent over the past 12 months]. This should help address the problem where accommodation costs in Dubai are generally too high,” says Craig Plumb, head of research, JLL Mena.

    “Although the introduction of 5 percent VAT at the beginning of the year had an impact on overall costs for residents, this was more or less offset by reduced rents. This is mainly caused by an increased supply, employment challenges and the movement of tenants from one emirate to another seeking the best value for money,” observes John Stevens, managing director, Asteco.

    Most of the UAE residential market has absorbed VAT’s limited inflationary impact in 2018. However, there has been an impact on residents’ disposable incomes.

    “Dubai’s real estate market is heavily sentiment-driven and the introduction of VAT across Dubai has undoubtedly had a negative effect on this. It is more likely that it is the change in sentiment that may cause tenants to behave more cautiously. However, it is still too early to know with any degree of certainty,” suggests Thomas Bolton, Cluttons’ director – strategic projects.

    VAT Refund to Boost MICE Industry in the UAE

    date: 20180516

    Organized By: Written by Waheed Abbas - Al Bawaba Business

    External URL: https://www.albawaba.com/business/vat-refund-boost-mice-industry-uae-1132392

    The UAE Cabinet’s decision to refund value-added tax (VAT) to the meetings, incentives, conferences and exhibitions (Mice) industry will make the country – especially Dubai – retain its competitive edge regionally and help position it as a bigger player on the global level as the refund money will be pumped back into the industry for marketing, generating more economic activity, say industry executives and tax experts.

    In addition, the refund will continue to attract more foreign companies and business tourists to Mice events which take place in the UAE all round the year.

    Humaid Matar Al Dhaheri, the group CEO of the Abu Dhabi National Exhibition Centre (Adnec), said the decision to refund VAT will significantly enhance the competitiveness of the industry and increase the capacity to attract niche global events, exhibitions and conferences.

    It will trim costs incurred by organisers and international associations while also enabling local associations to submit more bids to host major international conferences and congresses.

    “I am pleased to invite all public and private sector firms, partners, event organisers and specialised associations to make optimum use of such initiatives that will consolidate their presence in the UAE by strengthening the existing exhibitions and conferences portfolio and attracting and conducting new events,” Al Dhaheri said.

    Satish Khanna, general manager, Al Fajer Information and Services, hailed it as a landmark decision for the industry, which will help the emirates to grow in terms of market size and come closer to other global Mice destinations such as Las Vegas.

    He pointed out that exhibition companies will have more money at their disposal as a result of this government initiative and it will be distributed towards marketing the events and generate more activity in the country.

    “Whatever we save will go into marketing and this will enhance the size of exhibitions and be beneficial for the Mice industry. Dubai is on the right track to be a global Mice destination. The UAE’s will attract more Mice players to the country,” Khanna said.

    Ahmed Pauwels, CEO of Messe Frankfurt Middle East, said that VAT hasn’t noticeably affected their business. “Both in terms of exhibitors and our suppliers, we have not faced any undue hindrance in our business functions. So, with the recent announcement of the refund facility, I am sure the outcome will prove to be extremely positive and welcomed by the market.”

    ADNEC Group CEO praises VAT refund decision

    date: 20180514

    Organized By: WAM

    External URL: http://wam.ae/en/details/1395302689011

    Humaid Matar Al Dhaheri, Group CEO of ADNEC, has praised UAE Cabinet decision pertaining to VAT on exhibitions and conferences, inviting all public and private sector firms, partners, event organisers and specialised associations, to make optimum use of such initiative.

    He further said that it will consolidate their presence in the UAE by strengthening the existing exhibitions and conferences portfolio and attracting and conducting new events.

    “Our wise leadership has always been keen to support several national institutions and constantly aiming to drive the development of various economic and social sectors for the benefit of the country and its citizens, which is reflected in enhancing the emirate’s position globally and making it an ideal destination for hosting international conferences, exhibitions and events,” he said in a statement.

    “The decision to refund Value Added Tax, VAT, by institutions working in the exhibitions and conferences sector will significantly enhance the competitiveness of the industry and increase the capacity to attract niche global events, exhibitions and conferences. It will trim costs incurred by organisers and international associations while also enabling local associations to submit more bids for hosting major international conferences and congresses and enhancing the support of partnerships with the public and private sectors,” he added.

    Al Dhaheri went on to say, “The UAE, with its open, vibrant economy, world-class infrastructure and technological prowess, is at the forefront of shaping the business tourism sector at the regional and international levels. This would not have been possible without the generous support received from our wise and noble leadership and our corporate sister companies operating in this vital sector.”

    Cabinet approves resolution on VAT refunds for exhibitions, conferences

    date: 20180513

    Organized By: WAM

    External URL: http://wam.ae/en/details/1395302688751

    The Cabinet has approved a resolution pertaining to the Value Added Tax (VAT) for Conferences and Exhibitions, in line with the government’s ongoing efforts to support this sector and to enhance the country’s status as a hub for Meetings, Incentives, Conferences & Exhibitions (MICE).

    The resolution provides for granting the facilities involved in organising exhibitions and conferences the right to refund the amounts levied on providing such services, to guarantee ease of doing business and competitiveness in this sector. It supports, at the same time, the efficient implementation of the tax system, as per the best integrational practices.

    The resolution aims to support the UAE’s MICE sector and to maintain the country’s global lead in this field, in the light of the facilities offered to develop the sector and the keenness to provide the conducive environment, infrastructure and legislative framework for doing business and to attract the world’s leading event oragnising companies.

    According to recent statistics, MICE’s annual contribution to UAE economy stood at AED 2.39 billion and is anticipated to grow to AED 5.1 billion by 2020.

    UAE jewellers eye VAT relief on retail sales

    date: 20180503

    Organized By: Khaleej Times

    External URL: https://www.khaleejtimes.com/business/vat-in-uae/uae-jewellers-eye-vat-relief-on-retail-sales-

    Gold and jewellery industry executives in the UAE hope that the government will extend VAT exemption to the retail segment, similar to what was given to wholesalers and investors for the benefit of end-users.

    “We welcome the move of VAT [value-added tax] exemption by the UAE Cabinet on the gold and diamond trade in the B2B market. One of the major tourist attractions of the UAE is the jewellery sector that generates billions of dollars in revenue every year and by exempting it from the tax, the benefit will be immense for the businesses and the overall economy,” said Firoz Merchant, chairman of Pure Gold Group.

    “I hope that the government extends a similar exemption to the retail sector, which will not only benefit the jewellery retailers but also tourists and consumers,” he added.

    “We are not expecting total VAT exemption on purchases as we have requested to charge only on making charges as raw gold [pure gold] is VAT-free and jewellery is made from raw gold,” said Anil Dhanak, managing director of Kanz Jewellery.

    “Retail will greatly benefit once we go back to the old pricing structure and VAT is levied only on making charge which comes to around Dh1 per gram; it will be easy to absorb by retailers and even customers will not feel the pain.”

    UAE's maritime industry seeking VAT exemption

    date: 20180507

    Organized By: Khaleej Times

    External URL: https://www.khaleejtimes.com/business/shipping//uaes-maritime-industry-seeking-vat-exemption

    The UAE maritime industry is seeking exemption from the value-added tax levied earlier this year in line with global practices as many countries have relieved the industry from VAT, industry executives said.

    They believe that the UAE needs to look at the fees and other charges in order to become more competitive and also needs to update its maritime law.

    “It is important to think about the regulations especially the VAT because many countries around the world have exempted the shipping industry from VAT and it is important. There is discussion with the government and we hope this will be taken positively. I guess we have to apply what applies anywhere else; and the principal is that the shipping industry is usually kept free from VAT,” said Khamis Juma Buamim, managing director and group CEO, Gulf Navigation Holding.

    The UAE Cabinet last week announced exemption for the gold and precious metals trade from VAT to revive the industry.

    “In general, there are too many fees and charges and too many time-wasting [requirements to obtain services]. Time means money and people seriously think about how much time they spend [on obtaining these services],” he added.

    FTA cautions against granting exceptions when charging taxes unless specified in tax laws

    date: 20180429

    Organized By: FTA

    External URL: http://wam.ae/en/details/1395302685476

    The Federal Tax Authority, FTA, has reiterated its call for all registered businesses to collect Value Added Tax, VAT, and Excise Tax on all taxable transactions and from all customers, cautioning against excepting any individual or organisation that does not fall under one of the excepted categories specified in the UAE tax laws.

    In an official statement issued today, the FTA urged taxable businesses to remain vigilant and precise in their business transactions. Businesses must avoid granting exceptions from VAT, the Authority warned, clarifying that no transaction may be considered as outside the scope of tax, exempt, or zero-rated unless it was stated in the legislation or announced by the Ministry of Finance or the Federal Tax Authority, where any such exception was made, this is considered illegal and the supplier shall be liable for any tax not collected on the supply.

    The Federal Tax Authority reassured businesses that it periodically issues updated official notices that clearly specify the categories that are not subject to tax, exempt, or zero-rated, as stipulated in UAE tax laws and formal cabinet decisions.

    Trading in Gold and Diamond exempted from VAT

    date: 20180501

    Organized By: FTA

    External URL: http://wam.ae/en/details/1395302686143

    In line with the UAE Government’s efforts to ensure an efficient implementation of the Value Added Tax, VAT, while employing best international standards and maintaining the competitiveness of the local precious metals sector, the UAE Cabinet adopted a law to introduce the VAT Reversed Charge mechanism for investors in gold, diamond and precious metals.

    This step aims to maintain UAE’s high ranking in the ease of doing business indicators, and allows investors in gold, diamond and precious metals to conduct business with ease. The VAT Reversed mechanism will contribute to stabilising the gold and diamond sector in the UAE as well as stimulating investment in this sector.

    The law includes investments in precious metals such as gold, silver and platinum, used in trade in accordance with internationally accepted standards with a purity of 99 percent or more.

    This comes in the light of the many initiatives offered by the UAE to investors. It also provides the optimal environment, infrastructure and legislations necessary for growth and supports UAE’s position as a global hub for trade.

    The volume of gold trade in the UAE rose to AED244.3 billion in 2016, with a growth rate of 13 percent. The value of UAE’s imports of gold amounted to AED142.4 billion in the same year, while exports amounted to AED75.9 billion, and re-export amounted to AED26 billion.

    The gold, diamond and precious metals sector is one of the vital national economic sectors and one of the most important for the economic diversification that is expected to witness significant growth in the coming period as part of the UAE’s diversification objectives.

    90,000 registered businesses to submit tax returns, pay due taxes by end of April

    date: 20180422

    Organized By: FTA

    External URL: http://wam.ae/en/details/1395302683794

    The Federal Tax Authority, FTA, has revealed that approximately 90,000 businesses registered for Value Added Tax, VAT, are required to submit their tax returns and pay their taxes no later than 29th April 2018.

    Over 85,000 of these companies had their first quarterly tax period end in March, while the remaining businesses saw their monthly periods end on the same date. In a statement issued today, the Authority renewed its call to all businesses registered for VAT to expedite the submission of their tax returns and pay their due taxes on time in order to avoid administrative penalties.

    FTA Director-General, Khalid Ali Al Bustani, called on registrants to check their tax periods and the deadline for submitting tax returns and paying due taxes through the eServices portal on the FTA website. “Businesses whose tax periods ended on 31st March should submit their tax returns, and then pay their due taxes before the deadline specified by the Authority,” he explained, “The majority of registered businesses included in quarterly tax periods are small and medium enterprises,” Al Bustani said.

    “The Authority sought to streamline the procedures of filing tax returns and paying taxes to encourage taxable persons to comply and carry out their transactions by themselves electronically to meet their tax obligations in mere minutes and with four simple steps. Taxable persons may, at any time, enlist assistance from the FTA-accredited tax agents listed on the website,” he added.

    FTA Board approves Tourists Refund Scheme

    date: 20180425

    Organized By: FTA

    External URL: http://wam.ae/en/details/1395302684624

    The Federal Tax Authority’s, FTA, Board of Directors has formally approved implementation of Tourists Refund Scheme at its fifth meeting, held on Wednesday at the Dubai Ruler’s Court.

    The meeting was headed by H.H. Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and UAE Minister of Finance.

    The scheme seeks to ensure high preparedness and adherence to international standards among UAE businesses. It is set to include comprehensive procedures to connect outlets and points of sale across the UAE with the refund system.

    The Board also adopted the proposed design and security specifications of the brand to be used as a marker for tobacco products, allowing them to be tracked electronically in order to ensure that the Excise Tax on these products is paid. This advanced system seeks to prevent excise tax evasion and will be implemented in the near future in coordination with Customs Departments, as well as Departments of Economic development departments, and manufacturers and importers of tobacco products.

    During the meeting, the FTA Board of Directors approved a set of executive decisions concerning the internal regulatory and administrative policies of the Authority and its operational activities. The Board reviewed a comprehensive report covering the achievements made by the Federal Tax Authority, as well as the successful implementation of the UAE tax system. The reports revealed a remarkable increase in the number of businesses registered for VAT before the end of penalty waiver period issued by the Authority to exempt businesses from late registration penalties, where 281,000 of them are now registered for value-added tax, VAT, while 637 are registered for excise tax.

    VAT is bringing about a 'change' in payments

    date: 20180409

    The 5% VAT levy on goods and services is bringing a change in the way retail merchants have to manage ‘change’.   Items with the 5% VAT have changed the price from 5.00 to 5.25, thus expecting either the customer to give the 25 fils coins, or take back 75 fils from the merchant.

    The UAE government has clarified that there is no scarcity of small coins, however merchants have to gear up now to handle a larger volume of coins.

    However, retail will see a bigger impact when more and more customers switch to a cashless mode using their debit cards. The bank charges on debit/credit card will impact profitability that is already under stress due to the 5% VAT.

     

    UAE nationals can claim VAT refund on home construction

    date: 20180401

    Organized By: FTA

    External URL: https://www.khaleejtimes.com/business//vat-in-uae/uae-nationals-can-claim-vat-refund-on-home-construction

    Emirati house owners have the right to a five percent value-added tax (VAT) refund when constructing their homes, the Federal Tax Authority (FTA) has stated.

    The Authority has issued a guide with details for homeowners on how to claim the refund. It clarifies that only UAE citizens have the right to ask for the refund. They need no new account on the Authority’s website, and only need to download and fill a form and submit it back so the Authority

    Anurag Chaturvedi, senior director at Crowe Horwath, told Khaleej Times that UAE nationals can claim the VAT refund against the construction expenses for a residential building if they construct it for themselves or their family members.

    “UAE nationals can claim the refund against a newly constructed building to be used solely as residence, under Article (66) of Cabinet Decision No. (52) of 2017 on the Executive Regulations, of the Federal Decree-Law No (8) of 2017 on Value Added Tax,” he revealed.

    Furthermore, the VAT refund is not allowed in relation to a building that will not be used solely as a residence by the person or the person’s family. “For example, it is not to be used as a hotel, guest house, hospital, or if the property is to be used for rental purposes or for any other purpose not consistent with it being used as a residence,” Chaturvedi said.

    Nirav Shah, director at Fame Advisory DMCC, also stressed that the refund is only valid if the building is going to be used by the owner and his family. He also noted that the refund can only be claimed by Emirati nationals.

    According to the guide issued by the FTA, an Emirati owner has the right to ask for the VAT refund if he bought a piece of land and allowed an authorised person or company to establish a housing unit on it. The guide says that the VAT refund only includes the money spent on establishing the unit, adding that it includes the amounts paid as building materials, except for electricity products of furniture or green areas.

    On the other hand, the refund also includes VAT paid for doors, fire alarms systems, floors, kitchens, health units, bathrooms, windows, and electricity cables. A third entity is going to review the housing units to approve the refund and its amount after the Emirati owner submits the form. Moreover, the owner needs documents that prove his ownership for the unit, show the date of issuing the certification of establishment, prove the ownership of the land and show the value of VAT paid during the process.

    Accredited Tax Accounting Software Vendors

    date: 20180331

    Organized By: FTA

    External URL: https://www.tax.gov.ae/accredited-tax-accounting-software-vendors.aspx

    Solution Provider NameSoftware NameSoftware VersionValidity
    Zoho Corporation Private LimitedZoho BooksMILESTONE_ZFUAE_1Till March 2019
    Tally Solutions Private LimitedTally.ERP 9Release 6.3Till March 2019
    Sage Group PLCSage 50 Accounts (UK Edition)24.0.68.0Till March 2019
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    FTA urges consumers to ask for invoices

    date: 20180318

    Organized By: FTA

    External URL: http://wam.ae/en/details/1395302675581

    The Federal Tax Authority, FTA, has urged all consumers in the UAE to request tax invoices from retailers when purchasing products or services subject to Value Added Tax, VAT, to prevent attempts to manipulate the tax system.

    The Authority urged all taxable businesses to issue tax invoices when providing any supply, in order to avoid administrative penalties. In a new awareness message issued today, and as part of the FTA’s consumer awareness campaign “Be Aware of Your Rights”, the Authority stressed that failure to issue a tax invoice or alternative document when providing a product or service will expose the taxable business to an administrative penalty of AED5,000 for each tax invoice or alternative document. Similarly, failure to issue a tax credit note or alternative incurs an administrative penalty of AED5,000 for each notice or alternative document.

    The FTA urged consumers to verify the VAT amount on prices displayed in tax invoices. The Authority has launched online instruments and services to enable consumers to easily verify the value of the tax – namely, the VAT Calculator, launched in January – as well as to ensure that the issuer of the invoice is actually registered with the FTA, through the TRN Verification service.

    Limited VAT impact on real estate sector

    date: 20180320

    Organized By: FTA and DLD

    External URL: http://wam.ae/en/details/1395302676096

    The Federal Tax Authority, FTA, and Dubai Land Department, DLD, have confirmed that the UAE’s recently introduced VAT will have a limited impact on the real estate sector.

    FTA and DLD have stated that all real estate transactions, with the exception of the sale of vacant commercial properties and commercial property leases, will be either not subject to or exempt from the five percent VAT, while leased commercial property will not be considered a supply during their sale by the taxable person and will therefore not be taxable.

    The components of the tax-exempt real estate sector include bare lands, provided that they are sold or leased when no building or engineering works are on such lands. Upon commencement of any real estate development work, tax will be applied.

    Residential buildings are not taxable if sold or rented. These include apartments, buildings, residential villa complexes, housing for workers and students, accommodation for armed forces and police, and homes for the elderly, orphans and nursing homes. The law stipulates that the period of the lease shall be more than six months or to the holders of the identity card issued by the Federal Authority for Identity and Citizenship. However, this does not apply to buildings not fixed on lands, hotels and hotel apartments, or apartments offering services in addition to housing.

    New Guide - Taxable Person - issued by FTA

    date: 20180315

    Organized By: Federal Tax Authority, UAE

    External URL: https://www.tax.gov.ae/pdf/Taxable-Person-Guide-Issue-1-March-2018.pdf

    FTA has released a new guide book titled TAXABLE PERSON GUIDE FOR VALUE ADDED TAX dated March 1, 2018.

    This guide is the main reference guide to VAT in the UAE. It provides with:
    – an overview of the main VAT rules and procedures in the UAE and how to
    comply with them;
    –  assistance with the more likely questions that businesses might have; and
    –  references to more specialised publications where they have been published.

    It replaces the previous guide on the same subject.

    You may download the guide at the following URL: https://www.tax.gov.ae/pdf/Taxable-Person-Guide-Issue-1-March-2018.pdf

    KPMG sheds light on VAT challenges in Saudi, UAE

    date: 20180314

    Organized By: By: dt news , Posted on 14-Mar-2018

    External URL: http://www.newsofbahrain.com/viewNews.php?ppId=42793&TYPE=Posts&pid=21&MNU=2&SUB=50

    Around 100 business leaders and senior finance executives gathered yesterday at an event organised by KPMG in Bahrain to review and debate the first 100 days of VAT in the GCC and the lessons to be learnt for Bahraini businesses from the introduction of value-added tax (VAT) in the Kingdom of Saudi Arabia (KSA) and the United Arab Emirates (UAE).

    The half-day seminar, ‘VAT compliance for Bahrain businesses in KSA and UAE: the do’s and don’ts in Bahrain and beyond’ examined the current implications on Bahraini businesses with operations in or with Gulf countries that have already implemented VAT, how to tackle these, how to ensure a correct tax treatment from business partners and what to expect in Bahrain including process and technology solutions.

    Late registrations penalties waived till end of April

    date: 20180305

    Organized By: Federal Tax Authority, UAE

    The UAE Federal Tax Authority extended the exemption period for administrative penalties for late VAT registrants until the end of April to help businesses get ready for the five per cent levy introduced on January 1.

    “The Board [of directors of the Authority] approved a plan to exempt businesses that are late in registering with the Authority from administrative penalties until April 30, 2018,” the authority said in a statement on Wednesday. “This takes into consideration the lack of readiness of some businesses during the first phase of VAT implementation, and reflects FTA’s commitment to assisting businesses and encouraging them to be compliant with the tax procedures and to avoid administrative penalties.”

    About 260,000 companies out of an estimated 350,000 have registered for VAT, the authority’s director general Khalid Al Bustani said in January, but the FTA is showing leniency in terms of imposing fines for late registration. To help companies comply correctly with VAT regulations, the authority extended the deadlines for filing tax returns, a move experts say will help struggling businesses.

    However, the VAT will be applicable from January 1, 2018 as for all other businesses.

    Abu Dhabi's DED closes 15 commercial facilities for price hike violations

    date: 20180221

    Organized By: Abu Dhabi DED

    External URL: http://wam.ae/en/details/1395302668566

    The Department of Economic Development, DED, in Abu Dhabi shut down 15 commercial facilities in the emirate during the month of January due to price hikes on goods.

    Ahmed Tarish Al Qubaisi, Acting Director of the Commercial Protection Administration, said that the DED has conducted 98 campaigns, 50 of which were implemented in Abu Dhabi, 28 in Al Ain and 20 in the Al Dhafra Region. The campaigns focussed on the major points of sale and shops in the markets, which are visited by significant numbers of consumers to ensure that these facilities do not raise prices unjustifiably and that they implement VAT for the facilities that are registered in the tax system of the Federal Tax Authority.

    He noted that a total of 3,520 inspections were conducted throughout January, 1,350 of which were in Abu Dhabi, 1,120 in Al Ain and 1,050 in Al Dhafra. As a result of these inspections, 85 tickets were issued, 47 of which were issued in Abu Dhabi, 34 in Al Ain, and 4 in Al Dhafra.

    Al Qubaisi said that tickets were issued against those facilities that collected VAT without being registered in the tax system of the Federal Tax Authority and increased prices excessively for the period preceding the implementation of the tax by checking the previous bills. This is as per Item No. 77 of the Tickets Schedule in which it is stated that additional fees or services are imposed on the consumer unjustifiably, and Item No. 72 regarding the failure to adhere to the undertaking and the circulars presented by the DED or the instructions, conditions and controls issued by it.

    Al Qubaisi called upon the consumers to contact the DED through the Contact Centre of the Abu Dhabi Government in case they detect any explicit violations in VAT implementation.

    WAM

    Filing returns in 4 Steps - Guide issued by FTA

    date: 20180219

    Organized By: Federal Tax Authority

    External URL: http://wam.ae/en/details/1395302668161

    The Federal Tax Authority, FTA, has issued 50 guides and e-learning modules covering some legislative and implementation aspects of the UAE’s tax regulations as part of the authority’s comprehensive awareness campaign.

    Khalid Ali Al Bustani, FTA Director-General, said that this step reflects the FTA’s continued commitment to adopting the highest standards of transparency and accuracy in implementing tax procedures. The guides and e-learning modules cover many tax aspects, including import and export declaration, registration for Excise Tax, Value Added Tax, and Tax Groups, Excise Tax refund, filing tax returns, warehouse keepers and designated zones.

    The announcement coincided with the launch of the FTA’s comprehensive awareness campaign, “Filing returns in 4 Steps”, which seeks to familiarise businesses registered for VAT purposes with the FTA’s advanced online system. The FTA’s online tax system was launched earlier this month, and started receiving tax returns for the first tax period, which ended for some businesses on 31st January, 2018, as these are now required to file their returns before 28th February, 2018.

    Al Bustani called on businesses and specialists to benefit from these guides and e-learning modules to raise awareness among stakeholders and provide a comprehensive introduction to the UAE tax system with all its legislations and mechanisms. This will enable the FTA to obtain accurate and comprehensive information, which helps promote tax culture among the various business sectors, thus ensuring the successful implementation of the tax system.

    For more visit https://www.tax.gov.ae/e-learning.aspx

    UAE and KSA will be the only GCC country with VAT this year

    date: 20180218

    “Kuwait, Qatar, Bahrain and Oman will need more time than expected for implementing the GCC agreement to introduce Value Added Tax, even though Saudi Arabia and the United Arab Emirates have already implemented the tax”, says the Deputy Director of Financial Affairs Department at International Monetary Fund (IMF) Abdelhak Senhadji.

    In December 2017, Saudi Arabia and the UAE introduced excise taxes on energy drinks, fizzy drinks and cigarettes, and they introduced VAT one month later. Bahrain had also introduced excise taxes in December 2017 but the government suspended the introduction of VAT until a joint committee of the Cabinet and the parliament decides on a mechaplot nism to help Bahrainis with limited income to deal with the consequences of implementation of the tax system.

    According to a report issued by the ratings agency S&P last month, Qatar was not expected to introduce VAT in this phase as it was faced with the threat of a boycott and the closing of travel, trade and diplomatic ties by the UAE, Saudi Arabia and Bahrain.

    FTA urges businesses to complete and submit tax returns for the first tax period before February 28

    date: 20180203

    Organized By: Federal Tax Authority

    External URL: https://www.tax.gov.ae/filling-vat-returns.aspx

    The Federal Tax Authority (FTA) has set up integrated electronic systems to allow Taxable Persons to register, file tax returns and pay their due taxes seamlessly, asserted FTA Director General His Excellency Khalid Ali Al Bustani.

    The system encourages voluntary compliance, H.E. Al Bustani said, calling on all businesses registered with the Authority – whose first Tax Period ends on January 31, 2018 – to file their returns for the first Tax Period no later than February 28, 2018. The FTA Director General reiterated the importance of early preparation for submitting tax returns within the set timeframes, reminding registered businesses to submit their tax returns on a monthly or quarterly basis, as determined by the FTA based on their annual revenue, and within the deadlines set in Federal Decree-Law No. (8) of 2017 on Value Added Tax, as well as its Executive Regulation.

    H.E. Al Bustani noted that the Federal Tax Authority had made some exceptional adjustments to the first tax periods for VAT in order to afford more flexibility to businesses following requests from a large number of businesses subject to VAT, which entered into effect in the UAE on January 1, 2018. These exceptional adjustments included extending Tax Periods from one to three months for some businesses at the beginning of implementation in 2018, with Tax Periods returning to a monthly basis later on.

    The first quarterly Tax Period – which was meant to expire by the end of January or February 2018 – was extended, H.E. reminded, by merging it with the following period, making the first Tax Period four months for some businesses and five for others. Meanwhile, businesses whose first Tax Period was three months ending in March 2018 were not included in these adjustments.

     

    Committee of Consumer Protection reviews VAT impact

    date: 20180127

    External URL: http://wam.ae/en/details/1395302662885

    The Higher Committee of Consumer Protection is ensuring continued coordination between all state departments concerned with the Value-Added Tax to corroborate consumers’ confidence in the market stability and sound application of the tax and prevent any unjustifiable price hikes, Sultan bin Saeed Al Mansouri, Minister of Economy, has affirmed.

    The minister’s remarks came at a meeting of the Higher Committee of Consumer Protection at the Ministry of Economy in Dubai recently.

    “The committee received growing calls from the consumers during the first days of the VAT application. People had some concerns, but their worries have ebbed with the passage of time and by the end of the first fortnight of the application, the calls received by the committee declined from 3261 on the first day of the application to 493 on January 15,” said the minister at the meeting.

    Khalid Ali Al Bustani, Director General of the Federal Tax Authority (FTA), who attended the meeting, said the complaints received by the committee address three main issues: price hikes, tax registration numbers and erroneous calculation of VAT on some commodities.

    “Traders and departments against whom the complaints were filed have been notified and were given a grace period to rectify their strategies as per the tax rules and condition,” Al Bustani added.

    “The committee is in constant follow-up of the market to prevent any violations and in case of any non-abidance, all legal measures have been taken against the violators,” Mohammed Ahmed bin Abdul Aziz Al Shehhi, Undersecretary for Economic Affairs in the Ministry of Economy, who attended the meeting, said.

    DUBAI, 27th January, 2018 (WAM)

    VAT TRN is sufficient, no need to ask fro VAT Certificate

    date: 20180127

    Organized By: WAM

    External URL: http://wam.ae/en/details/1395302662854

    The FTA has urged businesses to conduct transactions on the basis of TRN (Tax Registration Number) and not to insist on VAT Certificates.

    Many businesses that did not meet the deadline for registration have been issued with provisional TRN and as such are not able to download the VAT certificate from the FTA site.  In light of these business partners may conduct business on the basis of TRN and not have to insist on VAT Certificates.

    The Federal Tax Authority, FTA, has confirmed that businesses are not required to present a tax certificate in order to conduct their commercial activities and can simply use their Tax Registration Number, TRN.

    In a statement issued on Saturday, the Authority called on all businesses and stakeholders in the UAE to carry out commercial or other transactions using TRNs provided by businesses, urging them not to require tax certificates in order to ensure smooth operations and minimise disruption of work.

    VAT cannot be charged if older contracts are silent on VAT

    date: 20180126

    Health clubs cannot charge VAT on membership contracts issued last year – unless they made clear reference to the tax at the time, a senior government official has said.

    Ahmad Al Zaabi, acting director of consumer protection at Dubai Economy, said gyms and other clubs could only charge VAT, or any other tax, on contracts signed last year “if the documented agreement terms specified the same”.

    His comments came after Fitness First members became embroiled in a dispute with the health club over VAT being applied to memberships signed and paid for last year.

    Many members have complained about demands from the company to pay the tax for the 2018 portion of their membership, with some claiming they were denied entry to the club until the tax was paid.

    Mr Al Zaabi said: “For example, the agreement should state that the fee applicable does not include VAT or any of the tax concerned, and also specify that the merchant reserves the right to charge VAT or any other tax that may be implemented in the country at any point during the agreement period.”

    He said if this does not happen, the contact will be considered “silent” and the merchant “cannot charge VAT from the consumers, or to gain an accepted settlement with their consumers”.

    Tourist VAT refund coming soon, says FTA

    date: 20180124

    In a recent press conference, the FTA chief Khalid Al Bustani said they are in talks with four international firms to establish refund centres at airports for facilitate refund of VAT to tourists departing UAE.

    These firms have experience in managing refund of VAT and will be soon finalized.

    In the same meeting the FTA also announced that over 260,000 businesses and 10,000 groups have already registered.

    FTA relaxes the timeline for filing the first VAT returns

    date: 20180116

    External URL: https://www.khaleejtimes.com/business/vat-in-uae/vat-in-uae-tax-authority-defers-date-to-file-returns

    The Federal Tax Authority (FTA) has relaxed the timeline for filing the first value-added tax (VAT) returns, easing reporting and compliance pressure on companies, especially SMEs.

    The first tax return filing for companies with more than Dh 150 million turnovers was one month. For others, it was quarterly. Now, firms can file their first tax returns after four or five months in June as per the new timelines appearing on the FTA’s dashboard after log-in by a member company. Such an extension in filing returns shall help firms to better comply.

     

    FTA makes amendments to the first tax period

    date: 20180118

    External URL: https://www.zawya.com/uae/en/story/UAE_tax_authority_makes_exceptional_amendments_to_VAT_period-WAM20180117170045894/

    The Federal Tax Authority, FTA, has made some exceptional amendments to the first tax period for those subject to value-added tax, VAT, to be more flexible with the business sectors included in the tax.

    The tax period for some businesses will, therefore, be four months, and five months for other businesses while businesses with a three-month tax period ending in March will not be affected by the amendments, he further added.

    You can view the first tax period for your organization by logging into your account on the e-services portal on the FTA’s website.

    As per the regulations, the tax declaration must be submitted to the authority no later than on the 28th day after the end of the relevant tax period.

    Online Shopping Purchases Subject to VAT

    date: 20180119

    Organized By: Federal Tax Authority

    External URL: https://www.tax.gov.ae/online-shopping.aspx

    The Federal Tax Authority (FTA) has confirmed that all purchases made through online shopping portals are subject to the same 5% Value Added Tax (VAT) as any other purchase made through traditional outlets if the products purchased online are received within the United Arab Emirates.

    The Authority explained in an awareness flyer issued today that according to Federal Decree-Law No. (8) of 2017 on Value Added Tax and its Executive Regulations, all online sales are subject to VAT where a seller’s supplies exceed the mandatory registration threshold of AED375,000 over the previous 12 months or the coming 30 days.

    Government Declares which Free Zones are Exempt from VAT

    date: 20180109

    The Cabinet has passed a decision on the Designated Free Zones for the purpose of the implementation of Value Added Tax.

    The designated zones are special zones for VAT purposes, which are generally considered outside of the UAE in terms of value-added taxation. While VAT applies throughout the UAE, in the designated zones VAT generally does not apply. Only fenced free zones with special controls on goods and services going in and out could benefit from this status.

    No.Designated Zone ( Abu Dhabi)
    1Free Trade Zone of Khalifa Port
    2Abu Dhabi Airport Free Zone
    3Khalifa Industrial Zone
    No.Designated Zone (Dubai)
    1Jebel Ali Free Zone (North-South)
    2Dubai Cars and Automotive Zone (DUCAMZ)
    3Dubai Textile City
    4Free Zone Area in Al Quoz
    5Free Zone Area in Al Qusais
    6Dubai Aviation City
    7Dubai Airport Free Zone
    No.Designated Zones (Sharjah)
    1Hamriyah Free Zone
    2Sharjah Airport International Free Zone
    No.Designated Zones (Ajman)
    1Ajman Free Zone
    No.Designated Zones (Umm Al Quwain)
    1Umm Al Quwain Free Trade Zone in Ahmed Bin Rashid Port
    2Umm Al Quwain Free Trade Zone on Sheikh Monhammed Bin Zayed Road
    No.Designated Zones (Ras Al Khaimah)
    1RAK Free Trade Zone
    2RAK Maritime City Free Zone
    3RAK Airport Free Zone
    No. Designated Zones (Fujairah)
    1Fujairah Free Zone
    2FOIZ (Fujairah Oil Industry Zone)

     

    Traders not to charge more than 20 fils in addition to the bill amount

    date: 20180108

    The Abu Dhabi Department of Economic Development (ADDED) on Thursday said that a small change of 10 fils and 5 fils can be rounded off to 25 fils and traders should not charge customers more than 20 fils in addition to the bill amount.
    The statement comes after complaints from consumers that they are not being handed out the exact change after the purchase of items post introduction of VAT (value added tax) in the UAE from January 1.

    Elaborating further, the Department8 said if the bill shows Dh10 and 5 fils, one may pay up to Dh10.25, and if the bill is Dh10.35 fils, it is fine to pay up to Dh10.50 fils.
    “This is to stop any confusion about the lack of 10 and 5 fil coins in the market,” ADDED stated.
    VAT is levied on most items including food and beverages, electronic goods, jewelry, among others.

    Further, the consumer protection department of Ministry of Economy has warned traders to pay the exact change or face penalties. “The ministry emphasizes the right of the consumer to recover any amounts of money and no trader has the right to take any additional amounts on the goods,” Hashem Al Nuaimi, Director of Consumer Protection Department at the Ministry of Economy, told Gulf News on Thursday. He asked members of the public to report any complaint via the call center in the Ministry of Economy on the number 600522225, which works from 7 am to 10:30 pm.

    Retailers warned against unjustified price hike

    date: 20180102

    The Department of Economic Development (DED) in Abu Dhabi has warned it will monitor any price hikes after the UAE implemented value-added tax (VAT) from January 1 and asked consumers to report any violations and complaints.

    The Department collected price details of products in 2017 from retailers and it will verify in the first quarter of 2018 to ensure that the price hikes are not beyond the permitted level in line with the implementation of five per cent VAT.

     

    The UAE has levied VAT at five per cent following thorough research studies conducted by competent bodies at ministries and federal entities. Economists have projected that inflation in the UAE will marginally inch up due to VAT as the tax rate is one of the lowest in the world.

    This is an excerpt of an article in the Khaleej Times which you can read here

    VAT-free Salik recharge only if done online

    date: 20180102

    There is a 5 per cent value-added tax (VAT) when you buy a Salik (toll gates) recharge card or tag from a petrol station or supermarket but no extra charge when you recharge your Salik account online or via the RTA website.

    There is no VAT on Salik charge – it is still Dh4 deduction from smart tags every time a vehicle passes under these toll gates.

    Last month, the Roads and Transport Authority (RTA) has clarified that VAT will not be levied on Salik or public transport facilities, after rumours on social media that VAT will also apply on Salik.

    Passengers and commuters of public transport facilities like the buses, metro, tram and maritime transport, as well as cab passengers, will not be subject to VAT.

    This is an excerpt from a Khaleej Times article and which you can read here

    Provisional Tax Registration Numbers issued, says FTA

    date: 20171224

    Organized By: Federal Tax Authority

    External URL: http://gulfnews.com/business/economy/vat/federal-tax-authority-gives-businesses-provisional-tax-registration-numbers-1.2145798

    In a statement on Saturday, as reported in the Gulf News, the Federal Tax Authority has started issuing provisional tax registration numbers to Tax Groups, and will soon be issuing provisional tax numbers to individual businesses to ensure that there is no delay in the January 1, 2018 deadline for VAT roll-out in UAE.

    It is presumed that the permanent numbers will be issued once the application has been fully reviewed and amendments made by business to ensure completeness.

    What UAE Property Buyers and Renters Need to Know Now

    date: 20171223

    External URL: https://arabiangazette.com/vat-uae-property-buyers-renters/

    As the United Arab Emirates (UAE) is gearing up for the rollout of the first-ever tax in the country, here are the implications for the real estate sector

    • Real estate brokering is defined as a service under the new UAE tax law, which will take effect 1 January 2018.
    • This means that UAE residents renting or buying property in the UAE will pay an additional 5% to the UAE government, collected by their broker, on the total commission of a rent or sale.

    For owners of residential properties, either homeowners or investors of residential buildings, there is no need to register for VAT as long as they do not have any other business activities. The first supply of a new residence that is upon the first handover by a developer is zero-rated within the first three years after its construction. Subsequent sale or rental of such property is exempt from VAT whenever such transaction occurs.

    Owners of commercial property, however, will have to register with the Federal Tax Authority (FTA) if the value of supply (the lease and/or sale) over the preceding 12 months or the coming 30 days exceeds Dh375,000. The VAT rate for such sale and rent of a commercial property is 5%. However, such owner, by registering with the FTA, will generally also be able to recover VAT with respect to expenses related to the supply of the building.

    This is an excerpt from a news article published in the Arabian Gazette and you can read it here

    Multiple stores 'change prices ahead of VAT'

    date: 20171223

    External URL: http://gulfnews.com/business/economy/vat/multiple-stores-change-prices-ahead-of-vat-1.2144712

    A number of retailers across the UAE have begun raising prices ahead of the January launch of the VAT, according to members of staff at each store who asked to remain anonymous. Importantly, the staff members said the retailers who have raised prices are not yet collecting VAT and are not claiming to be charging VAT.

    Retailers have a number of mechanisms they can use to try and pre-empt any negative impact from the introduction of a tax.

    Multiple instances of price increases across stores including major pharmacies, fashion retailers, clothiers, and household goods sellers have been found. Speaking on the condition of anonymity because of the sensitivity of the topic, staff members said that they had been asked to reprice multiple products to reflect the introduction of VAT, before the tax is officially implemented on January 1, 2018.

    Several retailers declined to comment for this story.

    While stating that retailers taking advantage of customers under the guise of VAT was an important issue to address, the FTA’s Al Bustani emphasised, however, that any complaints about retailers increasing prices and not telling customers was “not [the FTA’s] responsibility,” as it was “not a tax issue.”

    This is an excerpt from a news story in Gulf News which you can read here

    No VAT on withdrawals from other banks' ATMs in UAE

    date: 20171222

    External URL: https://www.khaleejtimes.com/business/vat-in-uae/no-vat-on-withdrawals-from-other-banks-atms-in-uae-

    The VAT will be payable only on the fee charged by the banks, which is a nominal amount of Dh2 per transaction. While many residents in the UAE are struggling to understand how the value-added tax (VAT) will impact the way they interact with their banks, experts say that there is no reason to be alarmed.

    Customers will not be charged five percent VAT on the amount withdrawn from ATMs other than their own bank, rather only on the Dh2 fee charged by the banks, according to tax experts. The five percent VAT will be levied on the Dh2 fee charged by banks when withdrawing from ATMs of other banks – which translates to around a nominal 10 fils per transaction.

    This is an excerpt from a Gulf News article which you can read here

    No plans to delay VAT in UAE for businesses

    date: 20171218

    External URL: https://www.khaleejtimes.com/nation/we-are-ready-for-vat-says-minister-at-fnc-session-concerns-delay-abu-dhabi

    There are no plans to delay VAT for businesses or banks in the UAE and no company will be exempted or will be given an extension for applying, the Minister of State for Financial Affairs announced on Tuesday.

    “The date is set for levying VAT from January 1, 2018, and the government is ready for VAT,” minister Obaid Humaid Al Tayer said during a session of the Federal National Council (FNC), held in its headquarters. During the session chaired by FNC Speaker Dr Amal Al Qubaisi, council members raised concerns over the readiness of businesses for VAT, and the impact of VAT on the overall national economy to the minister.

    “The imposition of value added tax is a historic step forward,” said the minister, adding that it is a step forward towards achieving “financial stability”.

    However, a statement by the Chairman of UAE Banks Federation, Abdul Aziz Abdulla Al Ghurair, revealed the concerns that banks in the UAE had over the VAT, highlighting that banks are not ready and require a six-month extension.

    “The government does not like to postpone anything, so it’s impossible to exempt anyone from the tax. There will not be any favours given to anyone,” said the minister.

    This is an excerpt from a Khaleej Times article and you can read the complete article here

    Government declares: No increase in salaries to reduce VAT impact

    date: 20171220

    External URL: http://gulfnews.com/news/uae/government/no-increase-in-salaries-to-cope-with-vat-minister-says-1.2143896

    There will be no increase in salaries to cope with the levying of the value-added tax (VAT), Obaid Humaid Al Tayer, Minister of State for Financial Affairs, told the Federal National Council on Tuesday.

    Al Tayer said the tax will have a minimal socioeconomic impact on people and investments.

    In the medium term, the impact of the tax will be 0.11 percent and as the economy grows it will go further down, Al Tayer added. The minister told reporters after the House’s session that the government is ready for implementation of VAT, while the “readiness of the businesses is their own responsibility”.

    Al Tayer told the House that the impact on current and future investments in the country is expected at 0.68 percent, adding that VAT is aimed at “achieving financial sustainability” for the government. The minister was answering questions about the implementation of VAT from the beginning of next year.

    This is an excerpt from an article from Gulf Times and you can read the complete article here

    MCA on panel of VAT Clinic by Khaleej Times

    date: 20171215

    Organized By: Khaleej Times

    External URL: https://www.khaleejtimes.com/business/vat-in-uae/smooth-transition-a-must-for-uae-companies

    Image: Khaleej TimesKhaleej Times organized a VAT Clinic on 15th December at the Indian Consulate which drew a large crowd of professionals and businessmen.

    Professionals from the Institute of Chartered Accountants of India (ICAI) Dubai Chapter clarified some of the misconceptions regarding the tax at the Indian Consulate in Dubai.

    The VAT Clinic is organised by Khaleej Times in collaboration with the ICAI Dubai Chapter and Qadi Accountants.

    Girish Chand, director of MCA Management Consultants, along with Manu Nair, CEO of Emirates Chartered Accountants Group; Sangeetha Nahar, senior manager of finance at Dubai Properties Group; and Dilip Jain, VAT lead at the ICAI VAT Faculty participated in this event.

    “The reality of the tax has set in and we should do our best to prepare for it from next year,” he said. “The ICAI has looked at VAT in a very broad way,” said Madhukar Hiregange, chairman of the Indirect Tax Committee. “Our target is to have 500 people who are capable of training to be ready to help individuals very soon. Any expert that learns about VAT has the responsibility to raise awareness. One of the biggest challenges of VAT will be how business owners can continue to run their businesses in the region.”

    Read more about it on the Khaleej Times Online Edition.

    No VAT on Salik, RTA clarifies

    date: 20171206

    External URL: https://www.khaleejtimes.com/nation/dubai//no-vat-on-salik-rta-clarifies

    In a huge relief to UAE residents, the Roads and Transport Authority has clarified that value-added tax (VAT) will not be levied on Salik (toll gates) or public transport facilities.

    The statement comes after rumours on social media that VAT, which is set to roll out in the UAE from January 1, will also apply on Salik.

    There are seven Salik gates in Dubai, and a toll of Dh4 is automatically deducted from smart tags every time a vehicle passes under these toll gates.

    Read the full article here.

    Fine of Dh100,000 on retailers using VAT to raise product prices

    date: 20171207

    External URL: https://www.khaleejtimes.com/business/vat-in-uae/fine-of-dh100000-on-retailers-using-vat-to-raise-product-prices

    A fine of Dh100,000 would be imposed on suppliers and retailers who raise prices of products more than the stipulated VAT (Value Added Tax).

    According to Al Bayan newspaper, the Ministry of Economy stressed that it will slap a huge penalty on those who try to make an extra buck on the pretext of VAT.

    Dr Hashim Al Nuaimi, director of the consumer protection department, said that in cooperation with other financial bodies in the country, the ministry has established a committee to monitor the markets before and after the implementation of VAT on January 1, 2018.

    He added that the panel will conduct surprise inspections to ensure the implementation of VAT as well as the selective tax. Immediate action would be taken if the committee detects any violations, Al Nuaimi pointed out.

    Read the complete article here.

    UAE’s VAT on gold jewellery will be on the entire piece

    date: 20171209

    External URL: http://gulfnews.com/business/economy/vat/uae-s-vat-on-gold-jewellery-will-be-on-the-entire-piece-1.2121287

    The VAT (value-added tax) on gold jewellery will likely apply to the entire piece, which effectively means an additional payout of Dh7-Dh8 a gram at today’s prices, according to industry sources. But on gold bars, deemed as investible assets, no such tax will apply. (There will also be no duty on loose diamonds.)

     The decision to include gold jewellery under VAT will be spelt out in the Executive Regulation governing the application of value-added tax in the UAE. A draft version of the document was released yesterday. The Regulation defines VAT as the 5 per cent tax imposed on the import and supply of goods and services at each stage of production and distribution, including that is a “deemed supply”. The only exceptions are specific supplies subject to the zero rate and those exempt as specified in the Decree Law.
    So, what would the VAT be on a typical jewellery piece? Wednesday’s price was at Dh145.50 a gram for 22K.
    It has been a tough year for gold and jewellery sales in the UAE. The general sentiments over the economy rubbed off on resident’s gold buying habits as well. But market sources say that Q3-17 sales were helped by decent sized demand associated with the Indian festival of “Diwali” last month.
    You can read the complete article here.

    Education and health care largely escape VAT price increase

    date: 20171210

    External URL: http://gulfnews.com/business/economy/vat/education-and-health-care-largely-escape-vat-price-increase-1.2121283

    The Federal Tax Authority (FTA) delivered a piece of welcome news to UAE residents on Wednesday morning, when it confirmed that both education and healthcare will be zero-rated when the country introduces VAT next year.

    There has been some confusion since August 2017, which the FTA blames on a mistranslation, as to whether or not private education would be subject to a 5 percent rate hike on January 1, 2018.

    According to the long-awaited draft of the FTA’s executive regulations on VAT, the supply of educational services shall be zero-rated if the following conditions are met: Firstly, the institution’s curriculum must be in accordance with the Ministry of Education, and secondly, the institution must be recognized by the Ministry of Education.

    You can read the complete article here.

    Administrative Penalties for Violations of Tax Law in the UAE Declared by The UAE Cabinet

    date: 20171206

    Organized By: Ministry of Finance, UAE

    External URL: https://www.mof.gov.ae/En/lawsAndPolitics/CabinetResolutions/Pages/violationstaxlaw.aspx

    Cabinet Resolution No. (40) of 2017 on Administrative Penalties for Violations of Tax Law in the UAE

    The Cabinet has issued Resolution No. (40) of 2017 on Administrative Penalties for Violations of Tax Law in the UAE. This Resolution outlines the scope of the resolution, general provision of the Administrative Penalty, methods of amending Administrative Penalties, the objections framework and responsibility of issuing Executive Decisions.

    The Resolution is effective as of the date of its issuance on 24th September 2017, excluding table two which came into effect as of 1st October 2017, and table three which will come into effect as of 1st January 2018.

    This Resolution includes the tables of Violations and Administrative Penalties appendix to the Cabinet Decision No. (40) of 2017, including table one, two and three.

    You can read about the resolution in the MoF Website and access the official document here.

    No delay to UAE's VAT launch despite plea, says tax chief

    date: 20171201

    External URL: http://www.arabianbusiness.com/politics-economics/384616-no-delay-to-uaes-vat-launch-despite-plea-says-tax-chief

    The UAE is fully committed to introducing VAT on January 1 despite calls for it to be put back by a senior banker, it was announced on Wednesday.

    Khaled Al Bustani, director general of the Federal Tax Authority, said in an interview with Arabian Radio Network that there would be no delay to its implementation.

    He also said the authority is seeing a surge in registrations as the deadline for companies to register for VAT looms.

     His comments come just days after AbdulAziz Al Ghurair, chairman of the UAE Banks Federation, called for the VAT launch to be postponed.

    He claimed financial institutions in the UAE are not yet ready and needed more time to prepare.

    But Al Bustani insisted there “is no discussion” about delaying agreements to bring in the new tax in the new year, adding that the law surrounding VAT clearly states that January 1 2018 is the start date.

    Etisalat, du to charge VAT on products and services

    date: 20171129

    The UAE’s telecom service providers, etisalat and du, will charge five per cent value added tax on the services and products they offer to the consumers in the country.

    “Starting from the 1st of January 2018, most of etisalat’s products and services shall be subject to a five per cent value added tax in compliance with federal laws and regulations levying and regulating the tax in the UAE,” it said in a statement.

    Du also said on its website that it would apply the standard VAT rate of five per cent from January 2018 to its products and services.

    His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, on Monday approved the executive regulations for VAT.

    UAE Cabinet approves VAT Executive regulation

    date: 20171128

    Organized By: UAE Ministry of Finance

    External URL: https://www.mof.gov.ae/En/lawsAndPolitics/CabinetResolutions/Pages/CabinetDecisionNo52OF2017.aspx

    The UAE cabinet on Monday, 27 September, approved the executive regulation, which is expected to provide final details on how VAT will impact various goods and services.

    His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of UAE and Ruler of Dubai, signed the Executive Regulation for VAT.
    The United Arab Emirates cabinet on Monday approved the executive regulation of the value-added tax (VAT) that is expected to include all of the remaining details on the new tax’s impact on goods and services.

    The UAE cabinet issued decree Number 52 of the year 2017 concerning the executive regulation of the Federal Law No. 8 of 2017 on value-added tax, which outlines the supply of goods and services in all cases, including supply in special cases.

    According to the statement, the VAT executive regulation will also define details on mandatory and optional tax registration, as well as tax groups, exemptions and details on deregistration.

    It will also include details on the tax due dates, where charges will be incurred, tax refunds and penalties in case of violations.

    You can read about the executive regulations on the Ministry of Finance website and read the Executive Regulations here.

    Tax Agents, Tax Accounting Software Vendors can now register in UAE

    date: 20171126

    External URL: https://www.khaleejtimes.com/business/vat-in-uae//registration-open-for-tax-agents-tax-accounting-software-vendors-in-uae

    The Federal Tax Authority (FTA) has officially opened registration for individuals interested in working as tax agents and for tax accounting software vendors, in addition to providing the necessary technical support to help these vendors as they assist UAE-based businesses comply with tax regulations.

    In a statement on Saturday, the FTA has defined standards and specifications that must be met by the tax agent, who is defined by Federal Law No. (7) of 2017 on Tax Procedures as any person registered with the authority in the register, who is appointed on behalf of another person to represent him before the authority and assist him in the fulfilment of his tax obligations and the exercise of his associated tax rights.

    Who can be a tax agent?

    The tax agent must be of good conduct and behaviour, never having been convicted of a crime or misdemeanour prejudicial to honour or honesty, irrespective of whether or not he may have been rehabilitated. He/she must hold a certified Bachelor or Master degree in tax, accounting or law from a recognised educational institution. If the applicant holds a bachelor degree in any other field, he/she may submit a tax certification from an internationally recognised tax institute.

    Applicants must also provide a certification of relevant and recent experience of at least three years in either tax, qualified accounting or law, and a certificate proving their verbal and written communication skills in both Arabic and English. Furthermore, they must pass the Authority’s Tax Agent exam, provide a medical fitness certificate, as well as a copy of the liability insurance contract against professional errors. Candidates are to carry out their activity through a legal person licensed by the competent authorities.

    Read the full article here.

    VAT will have moderate impact on UAE inflation

    date: 20171126

    External URL: https://www.khaleejtimes.com/business/vat-in-uae/vat-will-have-moderate-impact-on-uae-inflation

    Inflation in the UAE is set to witness a moderate increase next year with the implementation of five per cent value added tax (VAT) from January 2018, analysts said.

    “Inflation in the UAE is expected to be circa 2.5 per cent in the current year. Introduction of VAT in 2018 is likely to see this rise to over three per cent,” said Anita Yadav, head of fixed income research at Emirates NBD Research. She noted that there are multiple factors that affect inflation including interest rate hikes, currency strength and economic growth.

    Akber Naqvi, executive director and head of asset management at Al Masah Capital, sees VAT increasing inflation by 1.5 per cent to two per cent in the first year post introduction. However, the impact will start to normalise in the following years as the initial impact will be factored in during the first year of introduction.

    According to the International Monetary Fund, UAE inflation is projected to reach 3.6 per cent in 2018, almost 80 basis points higher than the estimated 2.8 per cent in 2017.

    UAE Government makes it convenient to file VAT Returns

    date: 20171122

    External URL: https://www.khaleejtimes.com/business/20171121/here-is-why-paying-taxes-in-uae-is-easiest-in-the-world

    The UAE has retained its top global ranking in terms of ease of payment of taxes, thanks to fewer taxes in the country. Analysts are unsure about the impact of the VAT on the country’s ranking, however , hey see the authorities going in the right direction with digital platform and regulations.

    Released by World Bank and PriceWaterhouseCoopers on Tuesday, the Paying Taxes 2018 report noted that it takes just 12 hours to file taxes in the UAE as compared to 29 hours in Bahrain, 47 hours in Saudi Arabia, 55 hours in Luxembourg, 63 hours in Switzerland and 64 hours in Singapore. The report comes at a time when the UAE and Saudi Arabia are set to roll out value-added tax (VAT) at five per cent – which is also one of the lowest in the world – from January 2018.

    Girish Chand, director, MCA Management Consultants, said that despite the UAE being the latest entrant in the VAT regime, it has adopted simple and logical implementation of VAT.

    “This has been done by maintaining a single rate of taxation at five per cent and keeping very limited activities in the zero rated and exempt category. Also the tax return mechanism is very simple where the information required is at summary level. The tax authorities have facilitated an online return filing mechanism making it convenient to file the return,” Chand added.

    Read the complete report here.

    VAT-specific deadlines for owners of commercial properties

    date: 20171120

    External URL: http://gulfnews.com/business/economy/vat/two-vat-specific-deadlines-for-owners-of-commercial-properties-1.2126626

    Owners of commercial properties in the UAE will need to keep in mind two deadlines related to the upcoming VAT.

    One, they will need to register with the Federal Tax Authority if the sales or rental proceeds exceeded Dh375,000 in the previous 12 months. And, two, if the owners believe they are likely to generate more than Dh375,000 over the next 30 days.

    These commercial properties could be used for offices, retail, hotel, F&B (food and beverage), or any such activity, and which will be assigned a 5 per cent VAT. But land sales for the purpose of building a commercial property is exempt from VAT’s ambit.

    Read the full article here.

    VAT Applicable on Food, Water and Electricity

    date: 20171112

    External URL: https://www.khaleejtimes.com/business/vat-in-uae/vat-to-be-charged-on-food-water-and-power-

    The UAE residents will have to pay 5 percent value-added tax (VAT) on food, water and power and higher education from next year.

    Girish Chand, director, MCA Management Consultants, said both Saudi and the UAE authorities have brought these categories under the VAT.

    Khalid Al Bustani, director general of Federal Tax Authority said, the tourists in the UAE will also get refunds on the returns. He further said that they are working with the parties involved in the project.

    Under the VAT regulation, higher education institutes which are more than 50 percent funded by the government, will not be charged VAT but the rest will be.

    Khalid Al Bustani, director general of Federal Tax Authority, on Wednesday said the tourists in the UAE will also get refunds on the returns. He said the authority is working with the parties involved in the project and expected to be rolled out ahead of VAT implementation.

    This is an excerpt from an article published in the Khaleej Times and you can read it here.

    Draft of the UAE Executive Regulations for VAT to be Released Soon

    date: 20171108

    The UAE’s Ministry of Finance will release the draft of the Executive Regulation of Federal Decree-Law No (8) of 2017 on Value Added Tax in the coming few days which will provide more clarity and details on exactly what items will be taxed.

    The Executive Regulations clarify several topics, including keeping accounting records and commercial books related to tax purposes, a period of record-keeping mechanism and saving.

    VAT is set for implementation across the UAE from January 1, 2018, at a rate of 5 percent. The implementation comes as GCC governments grapple with lower oil prices, which are pressuring the governments’ revenues and hence, spending.

    VAT will follow the rollout of excise tax in the UAE that began from October 1, and that impacted prices of tobacco products, carbonated drinks, and energy drinks.

    Guidelines for Smooth VAT Rollout Issued by UAE Tax Authority

    date: 20171101

    Organized By: UAE Federal Tax Authority

    External URL: https://arabiangazette.com/uae-tax-fta-vat-guidelines-20171030/

    17 point guidelines for businesses to help companies in the UAE to transition to the new tax system

    The UAE Federal Tax Authority (FTA) has issued a guideline to the local businesses for a smooth and effective imposition of the Value Added Tax System.

    The newly-introduced VAT system is scheduled to go into effect on 1st January 2018, in accordance with the highest international standards.

    The FTA said that the businesses must be aware of the following things before registering for the VAT system.

    1. VAT is an indirect tax imposed on the supply of the goods and services. It is already implemented in over 150 countries, including all the 29 European Union states as well as Canada, New Zealand, Australia, Singapore, and Malaysia.

    2. VAT is ultimately charged by the end consumers as it is charged at each step of the supply chain. Businesses only collect the tax on behalf of the government.

    3. Businesses only pay the government the tax that they collect from their consumers. They may also reclaim from the government the VAT they had paid to suppliers.

    4. VAT will provide the government a new source of income which will be used for the provision of various high-quality public services, including hospitals, roads, public schools, parks and civil services. The tax will also help the authorities to reduce its reliance on oil thereby building a stable and sustainable knowledge economy.

    5. VAT rate has been fixed at 5 percent in the United Arab Emirates and is levied on the supply of all goods and services, including food, commercial buildings, and hotel services if no explicit provision is made to impose a zero rate or an exemption.

    6. VAT’s zero rates is implemented on some goods and services, including health and education, gold for investment, the first supply of residential buildings, and the supply of international transport of passengers, goods, and exports.

    7. VAT doesn’t apply to activities such as bare land, local transportation of passengers, the supply of residential buildings and the supply of some financial services.

    8. Businesses involved in the supply of goods and services, which are subject to a zero rate, must register for VAT, but they can recover the VAT they incurred on their purchases. The businesses which supply exempt goods or services can’t recover VAT incurred on their purchases.

    9. All those businesses must register for VAT whose taxable supplies and imports exceed the mandatory registration threshold of AED 375,000.

    10. A business may register voluntarily for VAT if their supplies and imports are below the mandatory registration threshold, but exceed the voluntary registration threshold of AED 187,500.

    11. A business with expenses exceeding the voluntary registration threshold may also register voluntarily for the VAT. This offer has specifically designed for the start-up businesses with no turnover yet to register for VAT.

    12. All the businesses must apply for registration at the earliest. Failing to register by January 1, 2018, will result in fines as stipulated in Cabinet Decision No. 40 of 2017 on Administrative Penalties for Violations of Tax Laws in the UAE.

    13. Businesses can register for VAT through the Federal Tax Authority’s website, which is available 24 hours a day, seven days a week.

    14. Businesses can also form Tax Group which will be a useful tool to simply accounting for VAT. In this regard, the businesses that satisfy certain requirements covered under the Legislation – such as having a place of residence in the UAE and being related or associated parties – can form a Tax group.

    15. Businesses are not allowed to impose VAT on any of their goods or services before January 1, 2018.

    16. All the businesses must retain business records like Balance Sheet, Profit, and Loss, and records pertaining to fixed assets, payroll, inventory and stock levels as well as accounting records, including payments, receipts, purchases, sales, revenues, and expenses.

    17.  On their way to register for VAT, many businesses may be required to amend their core operations, financial management practices, the procedures they use to keep accounting books and records, and the technology they use in their accounting practices, in addition to changes in their human resources.

    VAT to create 5,000 Jobs in UAE and KSA

    date: 20171012

    External URL: http://www.arabnews.com/node/1176006/business-economy

    DUBAI: Around 5,000 finance and accounting jobs would be generated with the introduction of the Value Added Tax (VAT) in the Gulf region, a tax law expert said on Wednesday.

    The Unified Agreement for VAT of the Cooperation Council for the Arab States of the Gulf, which was signed by the six member states of the Gulf Cooperation Council, required signatories to enact domestic legislation that would introduce a 5 percent VAT on certain transactions.

    Gulf states have been looking at other ways to reduce dependency on oil revenues, as well as create new income streams to fund government services including public health services, public owned or funded schools, parks and transport infrastructure.

    It is estimated that the VAT’s imposition will raise between $7 billion and $21 billion annually — or between 0.5 percent and 1.5 percent of regional GDP. The IMF has said the returns could reach around 2 percent of region’s output.

    Saudi Arabia and the UAE are expected to be the first Arabian Gulf countries to introduce the GCC-wide VAT on January 1, 2018, while other member states Kuwait, Qatar, Bahrain, and Oman have committed to implementing their own VAT taxation by next year.

    Among the goods and service that would be subjected to VAT include electronics, smartphones, cars, jewelry, certain beverages, financial and accounting services, legal services, dining out and entertainment.
    Certain services and goods such as nearly 100 food items, basic health services, transport and public education will be exempted from VAT.
    The UAE has separately started to collect excise taxes at a rate of 100 percent on tobacco and energy drinks and 50 percent on fizzy drinks on October 1.

    UAE's Federal Tax Authority Announces Service Fees and Administrative Fines

    date: 20171010

    External URL: http://wam.ae/en/details/1395302635883

    The UAE on Monday announced services fees and fines for non-compliance of value-added tax (VAT) laws as the country heads towards implementation of the consumer-focused taxation system from January 2018.

    The regulations cover individuals, companies, tax agents and their legal representatives who come under the ambit of this new VAT regulations. The penalties range from as low as Dh3,000 and go up to Dh50,000 depending on the offenses committed by the entities or individuals.

    As per the new regulations, if the person fails to keep required records and other information specified in the laws will be fined Dh10,000 in the first instance and Dh50,000 in case of repetition.

    The law further states that if the person fails to submit data, records, and documents related to tax in Arabic to authority when requested, he would be penalized Dh20,000.

    The UAE will implement 5 percent VAT – which is one of the lowest in the world – from next year on a host of goods and services as part of the GCC-wide agreement. As per the UAE regulations, companies that provide goods and services with an annual turnover of Dh375,000 or higher will be subject to VAT. While businesses with taxable supplies below Dh375,000 and above Dh187,500 will have the option to register. The UAE aims to raise Dh12 billion through VAT collections in the first year and Dh20 billion in the second year. Analysts and economist believe that the VAT will increase inflationary pressure in the country.

    As part of the GCC deal, Saudi Arabia will also join the UAE from January 2018 while other Gulf nations will jump on the bandwagon at a later stage.

    A press statement issued on Monday said the UAE Council of Ministers adopted Cabinet Decision No. 39 of 2017 on fees for services provided by the Federal Tax Authority and Cabinet Resolution No. 40 of 2017 on penalties for violations of tax laws in the UAE.

    According to Federal Tax Authority, tax registration service and issuance of e-tax registration certificate will be free of charge but an attestation will incur a fee of Dh500. However, tax agents will have to pay Dhs 3,000 fee for registration and renewal for three years.

    According to FTA, registration and renewal fee for an accounting software provider will be Dh10,000 for one year, whereas registering a Designated Zone will cost Dh2,000 per year.

    However, there will be no service fee for registering a warehouse keeper or issuing an electronic warehouse keeper registration certificate. But an official printed certificate will cost Dh500.

    You may refer to the following article for a complete list of the fines.

    VAT Registration Final dates announced

    date: 20171008

    The UAE FTA has announced that the online registration for VAT is now open.

    • All businesses with a turnover of more than AED 150m should apply for registration before Oct 31, 2017.
    • All businesses with a turnover of more than AED 10m should apply for registration before Nov 30, 2017.
    • All businesses that must be registered before 1 Jan 2018 should submit their registration before 4 Dec 2017 to minimize the risk of not being registered for the beginning of the new year.

    A business must register if

    • The total value of its taxable supplies made within the UAE exceeds the mandatory registration threshold of AEED 375,000 over the previous 12 months, or
    • It anticipates making taxable supplies with value exceeding the mandatory registration threshold of AEED 375,000 in the next 30 days
    • If a business does not meet the threshold mentioned above then it is required to keep records which will enable the FTA to identify the details of the business activities and review transactions. The specifics regarding the documents which will be required and the time period required for keeping them can be found in Federal Law No (7) of 2017 on Tax Procedures and its executive regulation.

    Businesses can register through the e-services portal on the FTA website, www.tax.gov.ae. You can contact the FTA Call center at 600-599-994 for any further assistance.

     

    UAE VAT Registrations Now Open

    date: 20171002

    External URL: https://eservices.tax.gov.ae/en-us/

    The Federal Tax Authority (FTA) has launched the registration process for VAT Registration today, on October 1, 2017. Businesses that are eligible for mandatory registration are required to register via the FTA’s portal website.

    In a prior statement, FTA said it will be assisting businesses in the UAE with regards to financial and technical systems to ensure readiness to comply with tax regulations. This covers both the excise tax in October 2017, and the Value-Added Tax (VAT), which will be implemented starting January 2018.

    VAT is one of the most common types of consumption tax found around the world. Over 150 countries have implemented VAT (or its equivalent, Goods, and Services Tax), including all 29 European Union (EU) members, Canada, New Zealand, Australia, Singapore, and Malaysia.

    VAT is charged at each step of the ‘supply chain’. Ultimate consumers generally bear the VAT cost while Businesses collect and account for the tax, in a way acting as a tax collector on behalf of the government. A business pays the government the tax that it collects from the customers while it may also receive a refund from the government on the tax that it has paid to its suppliers. The net result is that tax receipts to government reflect the ‘value add’ throughout the supply chain.

    Taxable persons are required to settle their taxes within 15 days of the end of each month.

    UAE Retail Sector will be affected by VAT

    date: 20170925

    External URL: http://gulfnews.com/business/economy/vat/vat-likely-to-affect-uae-retail-sector-1.2094569

    The appliances sector, especially consumer electronics, will be hardest hit by the introduction of value-added tax (VAT). As for other segments of the retail sector, the UAE’s first major tax will have varying degrees of impact.

    This elasticity of demand, meaning the relationship between price and demand (a product type is considered elastic if demand drops when prices increase, and inelastic when demand isn’t changed by price increases), will impact how much retailers are able to absorb the cost of VAT.

    Pricing strategies such as this will help retailers avoiding passing the entirety of the cost increase on to their customers.

    According to Deloitte, however, products such as appliances, which have a high elasticity of demand, are not able to pass as much cost on to their customers if they are to remain competitive.

    “When demand is perfectly inelastic (i.e. an increase in price has no effect on demand) retailers should be able to pass on the full burden of VAT to the customer. This is, however, seldom … the case,” said Deloitte in a research report on the impact of VAT on the retail industry across the Gulf.

    The UAE and Saudi Arabia are among the first countries in the Gulf to implement the tax, that is expected to provide a new source of revenue for governments to spend on infrastructure and other public services.

    The UAE is expected to issue VAT laws in the third quarter of this year and the online registration will begin in mid-September.

    All businesses that meet the minimum annual income of Dh375,000 as confirmed by their financial records are required for compulsory registration with the VAT system.

    Fines will be levied against the firms that failed to register with the system, the UAE’s Federal Tax Authority said earlier this month.

    This is an excerpt from a news article published by The Gulf News. You can read the complete article by clicking here

     

    Theme Parks Tickets to Get Costlier Due to VAT in UAE

    date: 20170919

    External URL: https://www.khaleejtimes.com/business/vat-in-uae/vat-on-theme-parks-get-set-for-roller-coaster-economics-

    Set to be introduced in the UAE from January 2018, the five percent value-added tax on entertainment will result in an increase in the cost of water and theme park tickets in the UAE if the companies decide to pass on the tax burden to consumers, say tax experts.

    Girish Chand, director at MCA Management Consultants, is of the view that there is no exempt category in the entertainment sector, hence all activities of the entertainment industry would come under VAT.

    “It is expected that the ticket prices would be VAT inclusive considering that it is generally an advertised price. The service providers would have to review their profitability and decide whether they will absorb the VAT cost or pass on to the customers,” Chand noted.

    The major theme and water parks in the UAE are IMG Worlds of Adventure, MotionGate, Bollywood Parks, Legoland, Wild Wadi Waterpark, Aquaventure Park, Ice Land Water Park, Dreamland Aqua Park and Ferrari World Abu Dhabi.

    UAE residents, however, believe that there will be an impact initially but people will slowly adjust this increase in their entertainment budgets – especially for smaller families.

    In Europe, entertainment is usually subject to the standard rate, which varies between 17 and 27 percent. In some cases though, when entertainment is offered by non-profit associations (e.g. theatre), it is exempt. In other cases, sometimes it is subject to a lower rate (e.g. cinemas).

    This is an excerpt from an article published The Khaleej Times. To read the complete article click here.

    Cloud Based ERP Solutions can achieve faster VAT Compliance

    date: 20170911

    External URL: http://gulfnews.com/business/economy/vat-roll-out-to-propel-gulf-region-s-digital-transformation-1.2088338

    The implementation of Valued Added Tax (VAT) in Gulf Cooperation Council (GCC) countries next year will be a trigger for a massive wave of digital transformation as businesses prepare to ensure compliance with the new tax law, according to a new study by Oracle and Harvard Business Review (HBR).

    You can read the original paper in our White Paper Section.

    The study, based on a poll of 450 senior company executives from across the GCC, reveals 73 per cent of businesses consider VAT implementation a key opportunity to initiate wider digital transformation projects within their organizations.

    With businesses required to automate their processes to ensure that transactions are captured flawlessly for VAT compliance, 66 per cent of respondents also said they would consider transitioning their business processes from on-premises systems to the cloud if major cost savings can be identified.

    With the VAT compliance deadline quickly nearing, the Oracle/HBR study also explored the current VAT preparedness levels of businesses across GCC. While 21 per cent of respondents confirmed that they have initiated preparations to be VAT compliant; 30 per cent indicated that they currently have limited information on VAT.

    On their biggest obstacles in their journey to be VAT-compliant, 68 per cent of surgery respondents said managing business process changes would be a key challenge.

    This is an excerpt from an article published in the Gulf News. To read the complete article click here.

    VAT to make it easier for SMEs to get bank loans

    date: 20170907

    External URL: https://www.khaleejtimes.com/vat-will-help-smes-get-bank-credit-easier

    Obtaining credit facility from the banks will become easier for the small and medium enterprises in the UAE after the implementation of VAT as the companies will have to maintain their books from next year.

    Pankaj Mundra, Chairman of the Institute of Chartered Accountants of India – UAE (Dubai) Chapter, says the major challenges for SMEs is that they have to maintain their books properly and regularly in order to be VAT-compliant.

    Naveen Sharma, the vice-chairman of ICAI Dubai Chapter, states that the SMEs will be able to get more finance because their turnover will not be questioned by the lenders as their records will be clean.

    The Institute of Chartered Accountants of India, Dubai Chapter, on Tuesday evening organized a technical seminar on up-coming value-added tax which was attended by 1,500 people. Justin Whitehouse, a partner, indirect tax, Deloitte & Touche (ME), Mayur Batra, managing director, Mayur Batra Group and Pugazhendhi, associate vice-president, Tally Solution, addressed the participants on the challenges faced by the companies and individuals prior to the VAT. The ICAI Dubai chapter added 600 new members in the last one year, reaching 2,200.

    This is an excerpt from the article published in the Khaleej Times and you can read it by clicking here.

    vat-make-easier-smes-get-bank-loans
    S Venkatesh, Partner MCA speaking at the ICAI VAT panel discussion.

     

    VAT and Excise Tax Plans and Procedures Approved by FTA

    date: 20170906

    External URL: http://wam.ae/en/details/1395302630978

    DUBAI, 6th September 2017 (WAM) — The board of the Federal Tax Authority, FTA, has finalised plans for the upcoming period, including procedures for the introduction of Excise Tax next month and Value-Added Tax, VAT, early next year.

    The board approved these changes during its second meeting, which was chaired by H.H. Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and UAE Minister of Finance, with the attendance of its members from the Ministry of Finance in Dubai. The FTA board reviewed developments related to the issuance of laws that will regulate federal taxes in the country, such as Federal Law No. 07 of 2017 for Tax Procedures, Federal Decree-Law No. 07 of 2017 on Excise Tax and Federal Decree-Law No. 08 of 2017 on Value Added Tax.

    Obaid bin Humaid Al Tayer, Minister of State for Financial Affairs and Deputy Chairman of the FTA Board of Directors, said that they are working on issuing executive regulations for these laws, to provide specific details about their implementation.

    “We continue to steadily move forward in our preparations for the nation-wide tax laws in the UAE,” asserted H.H. Sheikh Hamdan bin Rashid. “The system we are developing will provide ample support for the sustainable social and economic development of the UAE; it will diversify revenue streams and establish sustainable sources of income, allowing the Government to carry on with its ambitious plans to develop future-ready infrastructure, and to continue providing high-quality services for the people.”

    “We are entering a new phase in the implementation of the tax laws,” His Highness continued, adding, “as we gear up to inaugurate the registration process for taxable companies, as soon as all the necessary legislative, administrative and infrastructure requirements are met. The Federal Tax Authority’s website has been designed to meet the highest international standards, facilitate registration and offer a bundle of tax-related services.”

    During the meeting, the Board of Directors adopted the proposed fees and fines, in accordance with the Authority’s responsibilities stipulated in Federal Decree-Law No. 13 of 2016 on the Establishment of the Federal Tax Authority. Also adopted were the violations outlined in Federal Law No. 07 of 2017 for Tax Procedures, Federal Decree-Law No. 07 of 2017 for Excise Tax and Federal Decree Law No. 08 of 2017 on Value Added Tax.

    They also discussed the proposed options for the FTA’s new logo and reviewed the work of the completed workshops and awareness programs about the tax system, in cooperation with local chambers of commerce and industry. The first series of the awareness workshops on the principles of implementing a selective tax system and on VAT took place between March and May 2017, with 25 workshops being conducted with the participation of over 15,000 participants from various national business sectors.

    The FTA started the second series of workshops in August 2017, in coordination with chambers of commerce and industry from various Emirates, targeting the various business sectors of the country. Separate workshops were conducted for each sector, including real estate, retail, import and export, as well as for companies that are subject to selective taxes. Ten workshops were already held, which saw the attendance of over 5,000 participants.

    UAE Petrol and diesel Prices to go up due to VAT

    date: 20170829

    External URL: http://www.khaleejtimes.com/business/vat-in-uae/vat-to-drive-up-petrol-and-diesel-prices-in-uae

    Five percent VAT will be applicable on both Petrol and Diesel when VAT will be implemented on January 1, 2018.

    The President, His Highness Sheikh Khalifa bin Zayed Al Nahyan, on Sunday, 27 August 2017 issued Federal Decree Law No 8 for value-added tax with one of the lowest rates in the world.

    Since petrol and diesel is a business activity, they would be subject to VAT, said Girish Chand, director MCA Management Consultants. “However, considering the low VAT rate and the insignificant composition in the overall spending of an individual, VAT on petrol and diesel would have a negligible impact,” Chand pointed out.

    Chand explained that VAT rates are related to business activity, not end users, so there would not be different VAT rates for commercial and individual vehicles.

    The UAE has aligned oil prices with international rates and they are adjusted every month by the Ministry of Energy.

    For the month of August, the prices were revised upward by three fils with unleaded gasoline 98 at Dh1.89, unleaded gasoline 95 at Dh1.78 and unleaded gasoline 91 at Dh1.71; while diesel was increased by four fils to Dh1.88.

    Based on this estimate, filling a 50-litre tank with unleaded gasoline 98 will today cost Dh94.5. Following the five per cent VAT implementation next year, the price will rise to Dh99.2. Similarly, the 2017 Land Cruiser 5.7 (EXR) with a 136-litre fuel tank capacity costs approximately Dh257 to fill unleaded 98 but following VAT, the consumer will have to shell out approximately Dh270.

    This article is an excerpt from an article published on KhaleejTimes.com and you can read the complete article here.

    Air travel, tution fees and doctor's fees to be VAT free

    date: 20170828

    External URL: http://www.khaleejtimes.com/business/vat-in-uae/no-vat-on-air-travel-school-fees-comes-as-relief-for-uae-residents-

    Air travel, tuition fees, and doctor’s fees will be free of VAT. On Sunday, August 27,  The President, His Highness Sheikh Khalifa bin Zayed Al Nahyan, issued Federal Decree-Law No 8 on value-added tax which you can read here.

    Five percent VAT will be levied on goods and services from January 2018 as a part of a GCC-wide agreement. Although tuition fees are exempt from VAT, extracurricular activities such as sports classes, music lessons, and school transport will be subject to VAT.

    New residential buildings will be subject to zero rated during the first three years of operation after completion which is beneficial not only to prospective buyers of new homes but also good news for the UAE real estate sector. If a property buyer takes a unit directly within three years of completion of the project, the price will be zero rated and they buyer will be exempted from VAT if he wants to sell it later.

    Air transport of passengers and goods which starts or ends in the state or passes through its territory, including related services, have been categorized as zero-rate d under the law. This is good news for the tourism sector as prices for hotels and restaurants increase with five percent VAT.

    “International transportation (including airlines) is zero-rated. Similarly, the supply of local transport is exempt from VAT. The supply of international transportation of passengers and/or goods and its ancillary services are also zero-rated. The supply of local passenger transport in a qualifying vehicle, vessel or aircraft too is exempt from VAT,” said Girish Chand, director MCA Chartered Accountants.

    The UAE is home to more than eight million expatriates from over 200 nationalities who fly regularly to their home countries in addition to traveling to other destinations of tourism.

    Dubai International Airport received 43 million passengers in the first half of 2017, an increase of 6.3 per cent. In addition, a record 8.06 million international overnight tourists arrived in Dubai during the first six months of 2017, a 10.6 per cent increase over the same period last year.

    Air travel would remain competitive for low-cost airlines who can price their fares more aggressively. At the same time, those who fly long haul on Emirates and Etihad will not have to pay extra on flights, particularly to the US where demand was seriously hit earlier this year due to the travel and electronics ban, he added.

     

    The new VAT legislation also prohibits anyone having business in the UAE not to have more than one tax registration number (TRN).

    You may read the complete VAT LAW by clicking here and the latest VAT news on out VAT News Section.

    UAE Releases its domestic VAT Law

    date: 20170827

    Organized By: Federal Tax Authority

    External URL: https://www.mof.gov.ae/en/lawsandpolitics/govlaws/pages/vat-law.aspx

    The UAE has released the test of its domestic VAT Law today, Aug 27, 2017.

    The UAE Government will be implementing VAT in the country on 1 January 2018. A standard VAT of 5% will be levied on goods and services such as food, consulting services, and maintenance works.

    A few of the sectors that have been confirmed to enjoy VAT reliefs are healthcare, education, financial services, and exports. The law also specifies special rules for paying import VAT, defines VAT grouping rules and so on.

    Federal Decree-Law No. (8) of 2017 on Value Added Tax has been issued on 23 Aug 2017. This Decree-Law shall be published in the Official Gazette and shall come into effect as of January 1, 2018.

    The VAT Law specifies the following:

    • Title One – Definitions
    • Title Two – Tax scope and rate
    • Title Three – Supply
    • Title Four – Tax registration and deregistration
    • Title Five – Rules pertaining to Supplies
    • Title Six – Zero rates and exemptions
    • Title Seven – Calculation of due tax
    • Title Eight – Tax Period, returns, payment and reclaiming of tax
    • Title Nine – Violations and Penalties
    • Title Ten – General Provisions
    • Title Eleven – Closing provisions

    The Law refers to Executive Regulations which will provide clarity on the detailed treatment of the various aspects covered in the VAT Law. This is expected to be issued in the near future.

    Companies should start their VAT preparation immediately as the implementation date for the law has been set for 1 January 2018.

    The FTA website was recently launched and can be accessed here. FTA is the government entity that is responsible for the collection and management of federal taxes.

    Businesses will be able to register online for VAT purposes from the middle of September 2017. You can access the English version of the VAT Law on the MoF Website by clicking here.

    Firms need to prove VAT-compliance to Tax Authority

    date: 20170826

    External URL: https://www.khaleejtimes.com/firms-have-to-prove-vat-compliance-to-tax-officials

    Speaking at a forum in Dubai on Saturday, Girish Chand, Director, MCA Chartered Accountants, said all the companies must maintain a record in order to show their turnover as well as whether they’re charging value-added tax (VAT) from the customer or not.

    In addition, those companies which are not registered for VAT cannot charge the tax from the customers.

    “When a tax official visits your company, he can ask for your records and it’s the responsibility of retailer, wholesaler or any other company to prove that their company’s turnover is less than mandatory threshold limit and hence, it’s not required to register for the VAT. In addition, he also needs to show his record if a company is charging the VAT from the client. Hence, maintaining record would become obligatory for all the entities operating in the UAE,” he added.

    Mr. Girish was speaking at the VAT Talks conference held to discuss the impact of VAT on business operations especially their supply chain, working capital, commercial operations and IT systems.

    You can view the latest VAT related events on our events page.

    The UAE has announced that it will implement VAT from January 1, 2018, at five per cent. In addition to the UAE, Saudi Arabia has also announced the implementation of VAT as part of an agreement between Gulf states.

    Mr. Girish pointed out that if a UAE-based supplier is exporting goods to any registered company in Saudi Arabia, then the local exporter here in the UAE will not have to charge VAT on the goods but the Saudi company will account using the Reverse Charge Mechanism. Similarly, it’s vice-versa for Saudi and Emirati companies.

    MCA is an assurance, financial and business consulting and advisory services firm providing comprehensive and valuable solutions to their clients, using multidisciplinary professionals for over 8 years in Dubai and Sharjah, and now in Abu Dhabi.

    You can reach them on 04 3319501 or write to GIRISH.CHAND@MCA.CO.IN

     

    FTA releases VAT Information on its website Tax.gov.ae

    date: 20170823

    Organized By: UAE FTA

    External URL: https://www.tax.gov.ae/

    The FTA has published its website at Tax.gov.ae.

    The FTA website dispenses the latest information, news and press releases relating to VAT including information explaining the basics of VAT and the VAT registration.

    VAT Explanation on the FTA Website

    The FTA offers live training courses that can help businesses better understand their tax obligations, FTA processes, and details about UAE tax laws. You can know about the latest upcoming events by clicking here.

     

    VAT impact will be softened by businesses to stay competitive

    date: 20170818

    Organized By: Gulf News

    External URL: http://m.gulfnews.com/business/economy/companies-likely-to-absorb-a-share-of-vat-to-remain-competitive-1.2075905

    In a recent article in Gulf News, the Banking Editor, Babu Das Augustine, presents the case that companies may absorb the VAT to stay competitive.

    Analysts feel that given the weak overall demand, companies may not be able to pass on the full impact of VAT on the consumer. Read more about this on the Gulf News link

    Inflation of 1.4% projected post VAT in UAE

    date: 20170815

    Organized By: Federal Tax Authority

    At a press conference in Abu Dhabi, the Federal Tax Authority Director projected an optimistic inflation rate of 1.4% post VAT implementation in UAE. Although VAT will be a uniform 5%, the direct impact on consumer price is expected to be around 1.4%.

    The new tax measures will not affect the UAE’s position or competitiveness as these taxes are amongst the lowest worldwide, the Federal Tax Authority’s top official highlighted.

    Online VAT Registration in UAE to begin mid-September 2017

    date: 20170815

    Organized By: Federal Tax Authority UAE

    The Federal Tax Authority will open online registration for tax purposes for businesses in mid-September 2017, head of Federal Tax Authority said on Tuesday.

    Speaking at a press conference in Abu Dhabi on Tuesday 15th August, Khalid Ali Al Bustani, Director General of FTA said “The Excise Tax and VAT laws are expected to be issued during the third quarter of this year and the regulations concerning both laws in addition to federal tax procedures are expected to be issued during the fourth quarter of 2017.”

    About 350,000 companies in the UAE will be covered under VAT starting from January 1. Excise tax will be implemented in the fourth quarter of this year.

    “The Excise Tax and VAT laws are expected to be issued during the third quarter of this year and the regulations concerning both laws in addition to federal tax procedures are expected to be issued during the fourth quarter of 2017,” said Khalid Ali Al Bustani, Director General of FTA at a press conference in Abu Dhabi.

    FTA Chief Appointed by the President

    date: 20170802

    External URL: http://bit.ly/2vnKCEY

    ABU DHABI, 1st August, 2017 (WAM) – President His Highness Sheikh Khalifa bin Zayed Al Nahyan has issued a federal decree No. 84 of 2017 to transfer and appoint Khalid Ali Al Bustani, Assistant Undersecretary for International Financial Relations to the position of Director-General of the Federal Tax Authority, FTA, and the rank of an Undersecretary at the Ministry.

    The Director General of the FTA will be responsible for managing the Authority’s business, and developing policies to achieve its strategic objectives, which include providing the national economy with new income sources to support its sustainable development.

    H.H. Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, UAE Minister of Finance, and FTA Chairman, said: “The appointment of Khalid Al Bustani is a key decision in supporting efforts to build Emirati skills and capabilities in all the country’s important sectors. It also serves as a step in the right direction in ensuring that the new tax structure is implemented in the best, most efficient manner in the UAE through enhancing the Federal Tax Authority’s role in carrying out its responsibilities and assigned goals. Al Bustani has made valuable contributions to supporting the Ministry of Finance’s ability to manage the UAE’s financial policies. He also played a key role in launching a number of projects and initiatives which enhanced the Ministry’s services and overall performance. We have complete confidence in Al Bustani’s abilities to achieve the Authority’s strategic goals, in line with the Government’s overall vision to promote sustainable and comprehensive growth for the UAE.”

    Al Bustani possesses vast practical knowledge in the financial policy field, where he previously held the role of Assistant Undersecretary for International Financial Relations at the Ministry of Finance. He made numerous valuable contributions which led to elevating the Ministry’s operations during his time there, where he was exposed to various areas, including financial management, international financial relations, and technology and data. During his time at the Ministry, Al Bustani also managed the international financial relations sector and the UAE’s financial relations with the GCC, the Organisation for Economic Co-operation and Development, regional and international organisations and funds, Global Forum on Transparency and Exchange of Information, in addition to overseeing negotiations and agreements relating to the avoidance of double taxation, and agreements pertaining to protecting and encouraging investments.

    Al Bustani expressed his happiness and humble thanks to the UAE’s wise leadership for this great national responsibility he has now been entrusted with. He also expressed his appreciation to H.H. Sheikh Hamdan bin Rashid Al Maktoum and the Authority’s Board of Directors for their valuable recommendation to appoint him to the role of Director-General of the Federal Tax Authority. He revealed that he will use his extensive experience to achieve the FTA’s objectives, and enhance its role as a leading national institution that serves the growth and development of the national economy, and provides the best services to its clients.

    The appointment comes following President His Highness Sheikh Khalifa bin Zayed Al Nahyan’s issuance of the Federal Decree Law No. 13 for the year 2016 on the establishment of the Federal Tax Authority, as an independent legal entity possessing the necessary legal capacity with financial and administrative independence.

    Al Bustani will lead the FTA’s directives on data collection related to federal taxes and fines; the establishment of taxpayer records, as determined by existing tax laws; and the issuance of necessary directives and clarifications to taxpayers regarding their obligations towards federal taxes and fines, in accordance with the mechanisms issued by the FTA’s Board of Directors.

    Al Bustani has held several positions at the Ministry of Finance since he joined in 1980. Prior to his current role as Assistant Undersecretary for International Financial Relations, he served as the Assistant Undersecretary for Resources and Budget, overseeing the International Financial Relations Department, Budget Management, and Revenue Development Department. In addition to his role and responsibilities at MoF, Al Bustani held the position of Director General of the Federal Customs Authority from 2009 to 2015.

    During his career at MoF, Al Bustani participated in various projects including: the establishment of the General Pension and Social Security Authority, GPSSA, the e-Dirham system, the Federal Customs Authority, Al Etihad Credit Bureau, the Federal Public Debt Law, Mortgaging of Moveable Properties as Security for Debts Law, and the Committee responsible for overseeing the establishment of the tax system in UAE.

    Al Bustani received a Bachelor’s Degree in Computer Engineering with honors from Boston University, USA, in 1980 and holds an MBA from Leicester University, UK, 2002.

    Source: WAM

    UAE passes Federal Law No. 7 of 2017 for Tax Procedures

    date: 20170731

    Organized By: Emirates News Agency

    External URL: http://bit.ly/2uQAMt4

    Source: ABU DHABI, 31st July, 2017 WAM/Hatem Mohamed- Emirates News Agency site http://bit.ly/2uQG47H

    President His Highness Sheikh Khalifa bin Zayed Al Nahyan has issued the landmark Federal Law No. 7 of 2017 for Tax Procedures, which sets the foundations for the planned UAE tax system, regulating the administration and collection of taxes and clearly defining the role of the Federal Tax Authority, FTA.

    “The Tax Procedures Law is a significant milestone towards establishing the UAE’s tax system and diversifying the economy,” said H.H. Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, UAE Minister of Finance and FTA Chairman.

    “The Law, issued by President His Highness Sheikh Khalifa bin Zayed Al Nahyan is an all-encompassing legislative framework that lays the groundwork for the UAE’s plan to implement taxes as a means to ensure sustainability and diversify the government’s revenue streams. The increased resources will enable the Government to maintain the momentum of its development and infrastructure for a better future.”

    The Law defines a clear set of common procedures and rules to be applied to all tax laws in the UAE, namely, VAT and excise tax laws, and clearly states the respective rights and obligations of the FTA and the taxpayer. The Law covers tax procedures, audits, objections, refunds, collection, and obligations – which include tax registration, tax-return preparation, submissions, payment and voluntary disclosure rules – in addition to tax evasion and general provisions.

    When the Tax Procedures Law goes into effect, all UAE-based businesses will be required to keep accurate records for five years. The law also sets penalties for non-compliance, as well as clear processes for appeals which align with international best practices, and establishes a fair and transparent environment for the FTA to carry out its mandate.

    “The UAE is committed to meeting the most stringent international standards,” H.H. Sheikh Hamdan bin Rashid said. “We are working to establish an optimal legislative and executive environment to ease the nation into the VAT and excise tax systems. Implementing these taxes gives the UAE further leverage when it comes to international competitiveness and brings us one step closer towards building the future envisioned by our wise leaders, who have called on all those in charge to innovate and strive to spread happiness among citizens and residents.”

    The Tax Procedures Law also establishes the register of tax agents who may interact with the FTA on behalf of taxpayers, specifies the basic requirements for appointing said tax agents, and sets the standards for maintaining confidentiality by the Authority as well as its officers.

    The new Law comes after the UAE, represented by the Ministry of Finance, ratified the Common Value Added Tax, VAT, Agreement of the States of the Gulf Cooperation Council and the Common Excise Tax Agreement of the States of the Gulf Cooperation Council, following Federal Decrees No. 31 and 32 of 2017, issued by H.H. Sheikh Khalifa. It is a follow-up step from Federal Decree-Law No. 13 of 2016 on the Establishment of the Federal Tax Authority, which created the FTA and tasked it with executing tax laws in the UAE.

    MOF-UAE Release New FAQs

    date: 20170709

    Organized By: Ministry of Finance (MOF) - UAE Government

    The Ministry of Finance (MOF) of the Government of the UAE has released a set of new FAQs relating to VAT. Click here to read the FAQs.

    UAE Finance Ministry Releases VAT FAQs

    date: 20170329

    Organized By: Ministry of Finance, UAE

    External URL: https://www.mof.gov.ae/En/budget/Pages/VATQuestions.aspx

    UAE’s MOF has released a new page on the website answering FAQs on VAT.

    VAT and excise awareness sessions

    date: 20170312

    Organized By: Ministry of Finance, UAE

    The Ministry of Finance UAE, has released a calendar of workshop for VAT awareness. The sessions will be held in Abu Dhabi, Dubai, Sharjah, Ajman and Fujairah. Sessions are open to public and require prior registration through the ministry portal.