Dubai, United Arab Emirates, March 24, 2017:     General view of shoppers at the Lulu Hypermarket in the Al Barsha area of Dubai on March 24, 2017. Christopher Pike / The National

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The UAE’s non-oil private sector recorded the sharpest pace of expansion since August on the back of an increase in both output and new business. Christopher Pike / The National

VAT may be simpler in the GCC but litigation will be complex

I spent some time in Oman and Bahrain last week, speaking at two conferences on VAT, which is not expected to be introduced in either state until mid 2018 at the earliest.

Earlier this year, there was a widely held expectation that all six GCC states would introduce VAT simultaneously on January 1 2018, not least because a perception that a delay by any one state would give it a competitive economic advantage, an argument which can be overstated.

Once UAE and Saudi Arabia introduce VAT on New Year’s day, Bahrain, Kuwait, Oman and Qatar will be in breach of their international obligations if they fail to follow suit. Most commentators think that Bahrain, Kuwait and Oman will implement their VAT regimes at some stage in the next year. Qatar? No idea.

The organisers of the conferences I was presenting at, asked if I could talk about some VAT legal case studies. So, I focused on the fact patterns that have given rise to litigation in the UK and EU: issues like the treatment of mixed supplies (where a supply consists both of standard-rated and zero-rated products), tripartite supplies (where A contracts with B, but C also gains some benefit under the arrangement) and how loyalty schemes, vouchers and the like should be treated for VAT purposes.

I also spoke about a long-running case involving the retailer, Littlewoods, that last month reached the UK Supreme Court. It concerned the (even for me) extraordinarily dull issue of how interest on overpaid VAT should be calculated. But the money at stake totalled an eye-watering £1.25 billion (US$1.68bn) in that case alone and £17bn (Dh84.05bn) in other cases, which turned on the decision. Littlewoods ultimately lost in the UK Supreme Court, despite having won in both the High Court and Court of Appeal.

During the delivery of my highly technical, legalistic talk, I could see eyes glazing over and delegates checking their smartphones.

In Muscat, one attendee approached me afterwards to say while he had enjoyed my talk, I was wasting my time because “things are much simpler in the GCC”. The GCC legislation is simpler; the GCC revenue authorities and courts will, he said, approach VAT in such a way that, unlike in the UK and the EU, VAT will not be, and will not need to be, litigated so much and, even if it really did come to that, points would be resolved with fewer complications.

It is true that the UAE VAT-Decree is significantly shorter than the UK’s VAT Act. It is also true, undoubtedly, that the Executive Regulation is shorter than the multiples of VAT-related regulations that have been laid and made before the UK parliament.

Furthermore, it is true that, although the UAE’s VAT law ought to be in accordance with the GCC VAT framework, the sanctions, if it falls short of meeting that obligation, are far less severe than the sanctions the EU can impose on a defaulting member state. And the UAE will never be required to have a supra-national court rule on whether its VAT laws are compatible, in the same way the European Court of Justice undertakes that role.


Read more from Jeremy Cape:

Lots of positives from the VAT draft regulation, but challenges remain

New Year's Day VAT dilemma for UAE consumers and businesses

Who will bear the burden of VAT in the UAE?


And yet ... many of the points of law that have been extensively litigated across the EU are to be found in similar, if not substantially identical provisions, in the VAT-Decree Law and the Executive Regulation. GCC VAT is, after all, built on the EU VAT framework.

The real challenge is not applying lengthy, closely-defined, difficult and convoluted legislative provisions; the difficult bit arises in applying an apparently simple rule to a factual matrix, which may itself be remarkably simple.

To take one example from 2016: the Airtours case involved determining whether the travel company, which was encountering some financial difficulties, could recover input VAT incurred on a payment made to its professional adviser, PwC, for restructuring advice and a report provided to it and a number of lending banks.

The commercial logic was straightforward: the banks wanted a professional view on the solvency position of Airtours, and Airtours asked PwC to provide that view to the banks on its behalf. HMRC denied Airtours the right to recover input VAT on PwC’s fees. The case eventually reached, but still managed to divide, the brilliant minds of the UK Supreme Court. Airtours lost the case, three to two but the irony, and perhaps the most telling point arising from the whole bruising experience, is that had a few tweaks been made to the engagement with PwC, it would have been able to recover.

The same simple question could (and I’m sure will) easily arise under the VAT-Decree Law. At its core, the issue to be determined in the Airtours case was nothing more than deciding who the “recipient of services” was, which is defined in the VAT-Decree as a “person to whom services are supplied or imported”.

Sometimes this will be straightforward to determine, but often it will not. In the short term, this precise question is likely to be particularly challenging where one group company contracts for the benefit of a subsidiary. Things can then only start to get even messier: how does the analysis change, for example, where the subsidiary conducts its economic activities in a different jurisdiction from its parent?

VAT always gives rise to difficult legal issues requiring legal solutions. It’s usually better to solve them upfront than in court. There’s little evidence that UAE businesses are doing so.

Jeremy Cape is a tax lawyer at Squire Patton Boggs, which has offices in London, Dubai and Abu Dhabi. Follow him on Twitter @jeremydcape

TV: World Cup Qualifier 2018 matches will be aired on on OSN Sports HD Cricket channel

Arabian Gulf League fixtures:


  • Emirates v Hatta, 5.15pm
  • Al Wahda v Al Dhafra, 5.25pm
  • Al Ain v Shabab Al Ahli Dubai, 8.15pm


  • Dibba v Ajman, 5.15pm
  • Sharjah v Al Wasl, 5.20pm
  • Al Jazira v Al Nasr, 8.15pm

Name: SmartCrowd
Started: 2018
Founder: Siddiq Farid and Musfique Ahmed
Based: Dubai
Sector: FinTech / PropTech
Initial investment: $650,000
Current number of staff: 35
Investment stage: Series A
Investors: Various institutional investors and notable angel investors (500 MENA, Shurooq, Mada, Seedstar, Tricap)

Oscars in the UAE

The 90th Academy Awards will be aired in the UAE from 3.30am on Monday, March 5 on OSN, with the ceremony starting at 5am

Three-day coronation

Royal purification

The entire coronation ceremony extends over three days from May 4-6, but Saturday is the one to watch. At the time of 10:09am the royal purification ceremony begins. Wearing a white robe, the king will enter a pavilion at the Grand Palace, where he will be doused in sacred water from five rivers and four ponds in Thailand. In the distant past water was collected from specific rivers in India, reflecting the influential blend of Hindu and Buddhist cosmology on the coronation. Hindu Brahmins and the country's most senior Buddhist monks will be present. Coronation practices can be traced back thousands of years to ancient India.

The crown

Not long after royal purification rites, the king proceeds to the Baisal Daksin Throne Hall where he receives sacred water from eight directions. Symbolically that means he has received legitimacy from all directions of the kingdom. He ascends the Bhadrapitha Throne, where in regal robes he sits under a Nine-Tiered Umbrella of State. Brahmins will hand the monarch the royal regalia, including a wooden sceptre inlaid with gold, a precious stone-encrusted sword believed to have been found in a lake in northern Cambodia, slippers, and a whisk made from yak's hair.

The Great Crown of Victory is the centrepiece. Tiered, gold and weighing 7.3 kilograms, it has a diamond from India at the top. Vajiralongkorn will personally place the crown on his own head and then issues his first royal command.

The audience

On Saturday afternoon, the newly-crowned king is set to grant a "grand audience" to members of the royal family, the privy council, the cabinet and senior officials. Two hours later the king will visit the Temple of the Emerald Buddha, the most sacred space in Thailand, which on normal days is thronged with tourists. He then symbolically moves into the Royal Residence.

The procession

The main element of Sunday's ceremonies, streets across Bangkok's historic heart have been blocked off in preparation for this moment. The king will sit on a royal palanquin carried by soldiers dressed in colourful traditional garb. A 21-gun salute will start the procession. Some 200,000 people are expected to line the seven-kilometre route around the city.

Meet the people

On the last day of the ceremony Rama X will appear on the balcony of Suddhaisavarya Prasad Hall in the Grand Palace at 4:30pm "to receive the good wishes of the people". An hour later, diplomats will be given an audience at the Grand Palace. This is the only time during the ceremony that representatives of foreign governments will greet the king.


Los Angeles Galaxy 2 Manchester United 5

Galaxy: Dos Santos (79', 88')
United: Rashford (2', 20'), Fellaini (26'), Mkhitaryan (67'), Martial (72')


Edinburgh: November 4 (unchanged)

Bahrain: November 15 (from September 15); second daily service from January 1

Kuwait: November 15 (from September 16)

Mumbai: January 1 (from October 27)

Ahmedabad: January 1 (from October 27)

Colombo: January 2 (from January 1)

Muscat: March 1 (from December 1)

Lyon: March 1 (from December 1)

Bologna: March 1 (from December 1)

Source: Emirates

Coal Black Mornings

Brett Anderson

Little Brown Book Group 


Round 1: Beat Leolia Jeanjean 6-1, 6-2
Round 2: Beat Naomi Osaka 7-6, 1-6, 7-5
Round 3: Beat Marie Bouzkova 6-4, 6-2
Round 4: Beat Anastasia Potapova 6-0, 6-0
Quarter-final: Beat Marketa Vondrousova 6-0, 6-2
Semi-final: Beat Coco Gauff 6-2, 6-4
Final: Beat Jasmine Paolini 6-2, 6-2


Directors: David and Alex Pastor
Stars: Georgina Campbell, Mario Casas, Diego Calva
Rating: 2/5

Tewellah by Nawal Zoghbi is out now.

Match info

Manchester City 3 (Jesus 22', 50', Sterling 69')
Everton 1 (Calvert-Lewin 65')


Director: Nikhil Nagesh Bhat

Starring: Lakshya, Tanya Maniktala, Ashish Vidyarthi, Harsh Chhaya, Raghav Juyal

Rating: 4.5/5

Sly Cooper and the Thievius Raccoonus

Developer: Sucker Punch Productions
Publisher: Sony Computer Entertainment
Console: PlayStation 2 to 5
Rating: 5/5


Started: 2023
Co-founders: Arto Bendiken and Talal Thabet
Based: Dubai, UAE
Industry: AI
Number of employees: 41
Funding: About $1.7 million
Investors: Self, family and friends

Specs: 2024 McLaren Artura Spider

Engine: 3.0-litre twin-turbo V6 and electric motor
Max power: 700hp at 7,500rpm
Max torque: 720Nm at 2,250rpm
Transmission: Eight-speed dual-clutch auto
0-100km/h: 3.0sec
Top speed: 330kph
Price: From Dh1.14 million ($311,000)
On sale: Now


Uefa Champions League semi-final, first leg

Tottenham v Ajax, Tuesday, 11pm (UAE).

Second leg

Ajax v Tottenham, Wednesday, May 8, 11pm

Games on BeIN Sports

Company profile

Company name: Fasset
Started: 2019
Founders: Mohammad Raafi Hossain, Daniel Ahmed
Based: Dubai
Sector: FinTech
Initial investment: $2.45 million
Current number of staff: 86
Investment stage: Pre-series B
Investors: Investcorp, Liberty City Ventures, Fatima Gobi Ventures, Primal Capital, Wealthwell Ventures, FHS Capital, VN2 Capital, local family offices

The biog

Favourite book: Animal Farm by George Orwell

Favourite music: Classical

Hobbies: Reading and writing


Five famous companies founded by teens

There are numerous success stories of teen businesses that were created in college dorm rooms and other modest circumstances. Below are some of the most recognisable names in the industry:

  1. Facebook: Mark Zuckerberg and his friends started Facebook when he was a 19-year-old Harvard undergraduate. 
  2. Dell: When Michael Dell was an undergraduate student at Texas University in 1984, he started upgrading computers for profit. He starting working full-time on his business when he was 19. Eventually, his company became the Dell Computer Corporation and then Dell Inc. 
  3. Subway: Fred DeLuca opened the first Subway restaurant when he was 17. In 1965, Mr DeLuca needed extra money for college, so he decided to open his own business. Peter Buck, a family friend, lent him $1,000 and together, they opened Pete’s Super Submarines. A few years later, the company was rebranded and called Subway. 
  4. Mashable: In 2005, Pete Cashmore created Mashable in Scotland when he was a teenager. The site was then a technology blog. Over the next few decades, Mr Cashmore has turned Mashable into a global media company.
  5. Oculus VR: Palmer Luckey founded Oculus VR in June 2012, when he was 19. In August that year, Oculus launched its Kickstarter campaign and raised more than $1 million in three days. Facebook bought Oculus for $2 billion two years later.

The flights: You can fly from the UAE to Iceland with one stop in Europe with a variety of airlines. Return flights with Emirates from Dubai to Stockholm, then Icelandair to Reykjavik, cost from Dh4,153 return. The whole trip takes 11 hours. British Airways flies from Abu Dhabi and Dubai to Reykjavik, via London, with return flights taking 12 hours and costing from Dh2,490 return, including taxes. 
The activities: A half-day Silfra snorkelling trip costs 14,990 Icelandic kronur (Dh544) with Inside the Volcano also takes half a day and costs 42,000 kronur (Dh1,524). The Jokulsarlon small-boat cruise lasts about an hour and costs 9,800 kronur (Dh356). Into the Glacier costs 19,500 kronur (Dh708). It lasts three to four hours.
The tours: It’s often better to book a tailor-made trip through a specialist operator. UK-based Discover the World offers seven nights, self-driving, across the island from £892 (Dh4,505) per person. This includes three nights’ accommodation at Hotel Husafell near Into the Glacier, two nights at Hotel Ranga and two nights at the Icelandair Hotel Klaustur. It includes car rental, plus an iPad with itinerary and tourist information pre-loaded onto it, while activities can be booked as optional extras. More information


Engine: 6-cylinder 3-litre, with petrol and diesel variants
Transmission: 8-speed automatic
Power: 286hp (petrol), 249hp (diesel)
Torque: 450Nm (petrol), 550Nm (diesel)
Price: Starting at $69,800
On sale: Now


Starring: Lupita Nyong'o, Joseph Quinn, Djimon Hounsou

Director: Michael Sarnoski

Rating: 4/5

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