The reader wants to avoid paying tax twice on items bought in Australia and then posted to the UAE. Paulo Vecina/The National 
The reader wants to avoid paying tax twice on items bought in Australia and then posted to the UAE. Paulo Vecina/The National 

VAT q&a: 'Do I have to pay VAT twice on an item posted to the UAE?'



I have a question relating to VAT applied to goods being posted to the UAE, with receivers having to pay for them at the point of pick up. Is this still the case if you have already paid VAT in the country of origin? I recently purchased an item from Australia where the price included 10 per cent GST. Now I have incurred another 5 per cent VAT upon receiving the item in the UAE, along with a service charge from the parcel carrier, which does not seem fair. RM Dubai

Unfortunately the 10 per cent sales tax you paid to the Australian supplier is totally unrelated to the 5 per cent UAE VAT that you have been charged from the parcel carrier. Article 50 of the Executive Regulations of the Decree Law states that where goods are imported into the UAE by a consumer (defined as someone not registered for VAT) then UAE VAT must be paid to the authority before the goods are released. This is why the courier will charge you UAE VAT plus a fee for collecting the VAT at the point of delivery, and this process is entirely compliant with the legislation.

The Australian Goods and Service Tax is governed by Australian tax legislation. I briefly reviewed the Australian GST rules and can see that exports of goods and services are generally GST free.  It appears that the Australian supplier should probably not have charged you GST knowing the goods were being shipped abroad. I have seen a number of examples of this double charging and it is often due to the supplier’s systems not being able to deal with GST-free export sales, rather than any intentional over charging.  I would approach the Australian supplier and see if they can refund or credit the amount. In my experience, you are unlikely to be successful, but it is worth an email to try.

_______

Read more:

VAT q&a: 'Can a UK business visitor reclaim VAT on UAE spending?'

"Do I have to pay tax on UAE income when I return to the UK this summer?"

VAT q&a: 'What is the best way to make a VAT payment to the Federal Tax Authority?'

_______

Our company deals in the real estate business and has two companies: one is a property management company and the other a general maintenance company. The property management company receives VAT from tenants but there are no tax input invoices because the building - including its commercial and residential units - is maintained by the general maintenance company. This company, therefore, receives all VAT input tax invoices from suppliers, but there is not any VAT output. So, how do we claim the VAT input amount for the general maintenance company? AA Dubai

I understand from the question that you have two separate companies, one that leases commercial and residential properties and a separate company that maintains them.  The property management company will receive VAT from commercial tenants, which it must report in its VAT returns and pay to the FTA.  The maintenance company pays VAT on invoices from third party suppliers. In this kind of arrangement, you would usually expect the maintenance company to invoice the property company for its services in maintaining the properties. Assuming the two companies are not covered by a tax grouping this would generate taxable revenues in the maintenance company against which you would offset the input VAT charged by suppliers.

The property management company would receive a tax invoice from the maintenance company that it could offset against its output VAT on rental incomes. Bear in mind that there will likely be restrictions on the input VAT reclaimable by the property management company as rental income on residential buildings are exempt from VAT, other than for the first supply in the first three years after completion when they are zero rated.

Another option​, if eligible to do so, would be for the two companies to form a tax group. This means there is no VAT on transactions between the grouped companies, but the input VAT charged to the maintenance company could be offset against the output VAT payable by the property management company.

A final option would be for the maintenance company to simply declare no vatable revenues on its return but to report the input VAT, which would give rise to a reclaim and repayment position. This is my least preferred option as asking the Federal Tax Authority to make a repayment of VAT is going to be more difficult than offsetting input VAT against output VAT.  In the case of an audit, it would likely also give rise to questions being asked about why the maintenance company is not charging the property management company for its services.

_______

Read more:

VAT q&a: 'A GIBAN number appears on my FTA page. What is that?'

VAT q&a: 'Why am I charged tax to pick up a parcel from the post office?'

VAT Q&A: 'Can a restaurant charge VAT after a two-for-one voucher has been used?'

_______

Lisa Martin, a chartered accountant with over 20 years commercial finance experience, is the founder of accounting, auditing and VAT consultancy, The Counting House. Email any VAT queries to pf@thenational.ae

What are the GCSE grade equivalents?
 
  • Grade 9 = above an A*
  • Grade 8 = between grades A* and A
  • Grade 7 = grade A
  • Grade 6 = just above a grade B
  • Grade 5 = between grades B and C
  • Grade 4 = grade C
  • Grade 3 = between grades D and E
  • Grade 2 = between grades E and F
  • Grade 1 = between grades F and G
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Shooting Ghosts: A U.S. Marine, a Combat Photographer, and Their Journey Back from War by Thomas J. Brennan and Finbarr O’Reilly

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The specs

Engine: 1.5-litre turbo

Power: 181hp

Torque: 230Nm

Transmission: 6-speed automatic

Starting price: Dh79,000

On sale: Now

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Greatest of All Time
Starring: Vijay, Sneha, Prashanth, Prabhu Deva, Mohan
Director: Venkat Prabhu
Rating: 2/5
PULITZER PRIZE 2020 WINNERS

JOURNALISM 

Public Service
Anchorage Daily News in collaboration with ProPublica

Breaking News Reporting
Staff of The Courier-Journal, Louisville, Ky.

Investigative Reporting
Brian M. Rosenthal of The New York Times

Explanatory Reporting
Staff of The Washington Post

Local Reporting  
Staff of The Baltimore Sun

National Reporting
T. Christian Miller, Megan Rose and Robert Faturechi of ProPublica

and    

Dominic Gates, Steve Miletich, Mike Baker and Lewis Kamb of The Seattle Times

International Reporting
Staff of The New York Times

Feature Writing
Ben Taub of The New Yorker

Commentary
Nikole Hannah-Jones of The New York Times

Criticism
Christopher Knight of the Los Angeles Times

Editorial Writing
Jeffery Gerritt of the Palestine (Tx.) Herald-Press

Editorial Cartooning
Barry Blitt, contributor, The New Yorker

Breaking News Photography
Photography Staff of Reuters

Feature Photography
Channi Anand, Mukhtar Khan and Dar Yasin of the Associated Press

Audio Reporting
Staff of This American Life with Molly O’Toole of the Los Angeles Times and Emily Green, freelancer, Vice News for “The Out Crowd”

LETTERS AND DRAMA

Fiction
"The Nickel Boys" by Colson Whitehead (Doubleday)

Drama
"A Strange Loop" by Michael R. Jackson

History
"Sweet Taste of Liberty: A True Story of Slavery and Restitution in America" by W. Caleb McDaniel (Oxford University Press)

Biography
"Sontag: Her Life and Work" by Benjamin Moser (Ecco/HarperCollins)

Poetry
"The Tradition" by Jericho Brown (Copper Canyon Press)

General Nonfiction
"The Undying: Pain, Vulnerability, Mortality, Medicine, Art, Time, Dreams, Data, Exhaustion, Cancer, and Care" by Anne Boyer (Farrar, Straus and Giroux)

and

"The End of the Myth: From the Frontier to the Border Wall in the Mind of America" by Greg Grandin (Metropolitan Books)

Music
"The Central Park Five" by Anthony Davis, premiered by Long Beach Opera on June 15, 2019

Special Citation
Ida B. Wells

 

How to get there

Emirates (www.emirates.com) flies directly to Hanoi, Vietnam, with fares starting from around Dh2,725 return, while Etihad (www.etihad.com) fares cost about Dh2,213 return with a stop. Chuong is 25 kilometres south of Hanoi.
 

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COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3EName%3A%20%3C%2Fstrong%3ESmartCrowd%0D%3Cbr%3E%3Cstrong%3EStarted%3A%20%3C%2Fstrong%3E2018%0D%3Cbr%3E%3Cstrong%3EFounder%3A%20%3C%2Fstrong%3ESiddiq%20Farid%20and%20Musfique%20Ahmed%0D%3Cbr%3E%3Cstrong%3EBased%3A%20%3C%2Fstrong%3EDubai%0D%3Cbr%3E%3Cstrong%3ESector%3A%20%3C%2Fstrong%3EFinTech%20%2F%20PropTech%0D%3Cbr%3E%3Cstrong%3EInitial%20investment%3A%20%3C%2Fstrong%3E%24650%2C000%0D%3Cbr%3E%3Cstrong%3ECurrent%20number%20of%20staff%3A%3C%2Fstrong%3E%2035%0D%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%20%3C%2Fstrong%3ESeries%20A%0D%3Cbr%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3EVarious%20institutional%20investors%20and%20notable%20angel%20investors%20(500%20MENA%2C%20Shurooq%2C%20Mada%2C%20Seedstar%2C%20Tricap)%3C%2Fp%3E%0A
The Penguin

Starring: Colin Farrell, Cristin Milioti, Rhenzy Feliz

Creator: Lauren LeFranc

Rating: 4/5

EMERGENCY PHONE NUMBERS

Estijaba – 8001717 –  number to call to request coronavirus testing

Ministry of Health and Prevention – 80011111

Dubai Health Authority – 800342 – The number to book a free video or voice consultation with a doctor or connect to a local health centre

Emirates airline – 600555555

Etihad Airways – 600555666

Ambulance – 998

Knowledge and Human Development Authority – 8005432 ext. 4 for Covid-19 queries

The Perfect Couple

Starring: Nicole Kidman, Liev Schreiber, Jack Reynor

Creator: Jenna Lamia

Rating: 3/5

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