No 10: VAT in the UAE. January 1, 2018 is fast approaching, people. Are you ready? Chris Ratcliffe / Bloomberg
No 10: VAT in the UAE. January 1, 2018 is fast approaching, people. Are you ready? Chris Ratcliffe / Bloomberg
No 10: VAT in the UAE. January 1, 2018 is fast approaching, people. Are you ready? Chris Ratcliffe / Bloomberg
No 10: VAT in the UAE. January 1, 2018 is fast approaching, people. Are you ready? Chris Ratcliffe / Bloomberg

VAT in UAE: Prices displayed must be the price at the till


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The price seen on the shelf should be the price paid at the till, according to new value-added tax (VAT) guidelines set out by the UAE’s finance ministry.

The ministry released a document on Tuesday detailing a list of violations, coupled with monetary fines. The document said administrative penalties would be in the form of “monetary amounts imposed on a person by the authority for breaching the provisions of the Federal Law No. 7 of 2017 on tax procedures or the tax law”.

The latest document said that failure by the vendor to display prices inclusive of excise or VAT will result in a fine of Dh15,000.

“The price displayed is the only price that can be charged to a consumer of that good or service,” said David Daly, a chartered accountant (Cima) who leads a consultancy practice in the UAE.

For instance, if a shopper purchases a clothing item from the rack which has a sign, Dh10.99 - that is the price that must be charged at the cash register.

“Unlike for example, the United States, where taxes are applied at the till point, in the UAE the law is clear,” Mr Daly said.

Consumers also need to remember that only businesses that are VAT registered may actually impose the 5 per cent levy that comes into effect next month.

A company must register for VAT if it makes sells goods or services that fall under the new tax regime, exceeding Dh375,000. Others may choose to voluntarily register if their taxable supplies and imports are less, but exceed Dh187,500.

On the other hand, companies will need to be careful of other vendors that could potentially charge fraudulent VAT.

Mr Daly described a hypothetical situation where a vendor could simply take a real VAT registration, equipped with an actual VAT number, and photoshop a non-registered company’s name.

Penalties for non-compliance with VAT legislation. The National
Penalties for non-compliance with VAT legislation. The National

In this case, the regulatory body has said that the fault  will still be with the company that paid the fraudulent VAT. However, the Federal Tax Authority has said that it will not create a website that lists legitimate VAT numbers and entity names. “Mitigate [fraudulent VAT payments] by getting a certified Federal Tax Authority [FTA] VAT registration certificate, which will cost a supplier Dh500,” he said.

The FTA offered more clarity by issuing a list of supplies that will be subject to the 5 per cent VAT. Some items include products made from oil and gas, such as petrol, will be subject to the tax. Residential rentals will not be subject to the level, but hotel apartments will have the 5 per cent addition. Whereas companies located inside free zones are outside VAT jurisdiction.

Life insurance is exempt, but other insurance varieties such as health, motor and property will see their prices increase.

“Any business that is required to be VAT registered and charge VAT from January 1 must register for VAT purposes, in the manner specified by the FTA, prior to that date,” Deloitte said in its September report.

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Read more:

Never assume a question about VAT is silly

Federal Tax Authority urges business to register for VAT

VAT in UAE: Salaries unlikely to keep up with rising cost of goods, recruiters say

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While you're here
WOMAN AND CHILD

Director: Saeed Roustaee

Starring: Parinaz Izadyar, Payman Maadi

Rating: 4/5

How to report a beggar

Abu Dhabi – Call 999 or 8002626 (Aman Service)

Dubai – Call 800243

Sharjah – Call 065632222

Ras Al Khaimah - Call 072053372

Ajman – Call 067401616

Umm Al Quwain – Call 999

Fujairah - Call 092051100 or 092224411

The currency conundrum

Russ Mould, investment director at online trading platform AJ Bell, says almost every major currency has challenges right now. “The US has a huge budget deficit, the euro faces political friction and poor growth, sterling is bogged down by Brexit, China’s renminbi is hit by debt fears while slowing Chinese growth is hurting commodity exporters like Australia and Canada.”

Most countries now actively want a weak currency to make their exports more competitive. “China seems happy to let the renminbi drift lower, the Swiss are still running quantitative easing at full tilt and central bankers everywhere are actively talking down their currencies or offering only limited support," says Mr Mould.

This is a race to the bottom, and everybody wants to be a winner.

Sole survivors
  • Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
  • George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
  • Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
  • Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
UAE v Gibraltar

What: International friendly

When: 7pm kick off

Where: Rugby Park, Dubai Sports City

Admission: Free

Online: The match will be broadcast live on Dubai Exiles’ Facebook page

UAE squad: Lucas Waddington (Dubai Exiles), Gio Fourie (Exiles), Craig Nutt (Abu Dhabi Harlequins), Phil Brady (Harlequins), Daniel Perry (Dubai Hurricanes), Esekaia Dranibota (Harlequins), Matt Mills (Exiles), Jaen Botes (Exiles), Kristian Stinson (Exiles), Murray Reason (Abu Dhabi Saracens), Dave Knight (Hurricanes), Ross Samson (Jebel Ali Dragons), DuRandt Gerber (Exiles), Saki Naisau (Dragons), Andrew Powell (Hurricanes), Emosi Vacanau (Harlequins), Niko Volavola (Dragons), Matt Richards (Dragons), Luke Stevenson (Harlequins), Josh Ives (Dubai Sports City Eagles), Sean Stevens (Saracens), Thinus Steyn (Exiles)

Leap of Faith

Michael J Mazarr

Public Affairs

Dh67
 

Innotech Profile

Date started: 2013

Founder/CEO: Othman Al Mandhari

Based: Muscat, Oman

Sector: Additive manufacturing, 3D printing technologies

Size: 15 full-time employees

Stage: Seed stage and seeking Series A round of financing 

Investors: Oman Technology Fund from 2017 to 2019, exited through an agreement with a new investor to secure new funding that it under negotiation right now. 

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