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.