'As an Amazon seller in the UAE, do I have to pay VAT?'

If the seller is responsible for the import and customs clearing in the Emirates, then VAT should be applied

22 January 2020, Saxony, Lampertswalde: An Amazon sorting employee carries a package to a distribution centre. In the hall, parcels from the online mail order company's European logistics centres are unloaded, sorted and delivered to customers in the Saxon state capital. Photo: Sebastian Kahnert/dpa-Zentralbild/dpa (Photo by Sebastian Kahnert/picture alliance via Getty Images)

I am a non-resident Amazon seller in the UAE, with an office in Australia. I have been selling on Amazon in the UAE for more than a year now.

While doing research to register for value-added tax in the UAE, I found out that there is a Dh20,000 penalty for not registering when exceeding the UAE VAT threshold. I am an overseas seller and overseas sellers have to pay VAT, regardless of the sales amount. If I register for VAT now, will I be subject to the penalty? AS, Abu Dhabi

VAT is a complex topic and even more so when it relates to business transacted outside the country by UAE businesses, or by overseas businesses who trade in the UAE, as in this situation. I referred the query to Gemma Nye, manager of Go Figure accountancy.

She said: “Non-resident parties are liable for VAT per INCO Terms [an internationally recognised set of rules that define the responsibilities of sellers and buyers] if they are responsible for shipping and customs clearance into the UAE. If the UAE client receiving the goods takes responsibility for the import and shipment of the goods into the UAE, then the non-resident party will not be liable for VAT.”

Ms Nye added: “If the seller is responsible for the import and customs clearing into the UAE, even if they use a clearing agent, then VAT should have been applied from the first day of supply into the UAE. In this case, AS will be subject to Dh20,000 for failure to submit a registration application within the timeframe specified by the tax law. AS will also be subject to penalties for late tax return submission and late payment of tax due on each return.”

As the rules and regulations vary between countries, it is always wise to seek expert advice on matters such as taxation as getting it wrong can be costly.

I work in a hotel kitchen and am aware that everyone's working hours should be reduced by two hours during Ramadan. We are still required to work nine to 10 hours each day with overtime. I was wondering if that is against the law and if I could make a statement to someone about it anonymously? MR, Dubai

This employer is subject to the UAE Labour Law and should comply with the law. Article 65 states: “The maximum number of ordinary working hours for adult workers shall be eight hours per day or 48 hours per week. The number of hours may be increased to nine hours per day for people employed in trade, hotels, cafeterias, security … The ordinary working hours shall be reduced by two hours during Ramadan.”

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If an employer is breaking the law, an employee can register a complaint with the Ministry of Human Resources and Emiratisation

This means that no matter the number of hours worked each week, in line with the law, everyone should work two hours fewer per day during the month of Ramadan. For companies that are subject to the UAE Labour Law, it is irrelevant whether the individual is fasting or not. Nasser bin Thani Al Hamli, Minister of Human Resources and Emiratisation, reiterated this in a circular dated April 10, 2021.

Where overtime is worked, there are strict limits in law and guidelines regarding payment. In addition, no employee should be forced to work additional hours if they do not want to. The details are set out in a number of articles in the UAE Labour Law.

Article 67 states: “Should the work circumstances require the carrying out by the worker of a work for more than the ordinary working hours, the additional period shall be deemed an overtime, for which the worker shall be paid a wage equivalent to the ordinary hourly wage with an addition of at least 25 per cent of the said wage.”

Article 68 may be relevant to this reader’s job. “Should the work circumstances require the carrying out by the worker of an overtime work between 9 pm and 4 am, the worker shall be entitled, in counterpart for the overtime, to a wage equivalent to the ordinary hourly wage with an addition of at least 50 per cent of the said wage.”

No one should work more than two hours of overtime per day, as per Article 69.

If an employer is breaking the law, an employee can register a complaint with the Ministry of Human Resources and Emiratisation but there is no anonymous option. However, it may be possible to report the illegal working hours during Ramadan by dialling 800 60. There is also an online chat function on the website but this requires identifying details.

Employers should be aware that failure to comply with UAE law can lead to substantial fines.

Keren Bobker is an independent financial adviser and senior partner with Holborn Assets in Dubai, with more than 25 years’ experience. Contact her at keren@holbornassets.com. Follow her on Twitter at @FinancialUAE

The advice provided in our columns does not constitute legal advice and is provided for information only

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