Almost half of all UAE residents are concerned they will not be able to afford the prices rises brought about by the introduction of VAT, according to a new survey.

The poll of 200 UAE residents was conducted by comparison site yallacompare in December 2017. It found that 44.6 percent of participants are “worried” about not being able to afford the increased cost of living resulting from VAT being added to products. Over half (51.8 percent) said they were “slightly worried” about the increased costs, but are confident they won’t feel many effects.

This uncertainty over prices rises was offset by yallacompare’s other findings. The survey found that 62.5 percent of residents expect a salary raise in 2018.

This suggests increased confidence in the UAE economy in 2018. According to the survey, 32.1 percent of residents delayed a big purchase – such as a car or a house – in 2017. But 39 percent intend to make a big purchase this year – despite the fact that VAT may now apply.

In a further boon, over 80 percent of respondents said they are confident of keeping their job in 2018.

Jonathan Rawling, CFO of yallacompare, commented on the findings: “The introduction of VAT is clearly a positive step for the UAE to take as it continues to diversify its economy away from oil. However, it appears that large numbers of UAE residents are simply considering VAT as an additional expense to be dealt with in the short term.

“The fact that the introduction of VAT should result in a more stable economy overall has perhaps been lost on many people. But once the initial shock of consumer prices rising has worn off, we believe that the other benefits of VAT – such as improved government services and greater business confidence – should be clear to the majority of residents.”

Source:www.arabianbusiness.com/politics-economics/387114-vat-almost-half-of-uae-residents-are-worried-about-prices-rises

The remaining 30 per cent would go into the federal budget, Sheikh Mohammed said.

Chairing the cabinet meeting on Sunday, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, approved the distribution of revenue from value-added tax (VAT) and said local government would receive 70 per cent of the revenue.

This would be used to improve local services, community development, and wider support of UAE residents.

The remaining 30 per cent would go into the federal budget, Sheikh Mohammed said.

The Dubai Ruler also announced the appointment of the administrative board of the Federal Authority for Nuclear Regulation (FANR).

He said on his Twitter account that the UAE is proud to be the first Arab country to produce energy from nuclear reactors, adding that the first reactor will get into service in 2018.

“Our target is to establish many great developing and services projects for our citizens, and the government would be transparent about the nature of those projects, and will strictly monitor the markets to prevent raising the prices, and it will keep consulting the people to improve all what provides them and their families with good living.”

Source:www.khaleejtimes.com/business/vat-in-uae/70-of-uaes-vat-revenue-to-be-used-by-local-governments

For data packages, any plan taken in 2017 and spilling over into 2018 will be subject to VAT

Here’s a rundown of what you need to know about VAT – from what products and services are subject to it to knowing whether companies are trying to pull a fast one on you

If and only if

Businesses are not allowed to charge VAT unless they are registered with the Federal Tax Authority and have a tax registration number (TRN)

Full details

Details of VAT should be displayed on the tax invoice issued to customers, which should include the total amount and tax being charged, plus the TRN

Loose change

In cases exact change cannot be given, rounding off can be applied; for example, 13 fils can be rounded off to 25 fils, 39 fils to 50 fils and 69 fils to 75 fils

Enjoy for a little more

Leisure and entertainment services – including theme parks, cinema tickets, concerts and restaurants – are subject to VAT

Save on Salik by.

.buying cards online – it won’t cost you anything extra. Salik cards are subject to VAT when bought in stores

Health benefits

Consultancy and medicines are zero-rated for preventive- and treatment-related services

Learn it

VAT will directly hit universities, unless it is 50% funded by a government grant. The only exception is the rent in student accommodation

Thanks, jewellers

VAT is implemented on investment gold, silver and platinum jewellery with 99% purity. For consumers, the tax is applicable on the entire piece rather than on making charges. However, some companies are happy to absorb the VAT cost, mostly on diamonds

Your call

There are no extra charges on recharge cards. For data packages, any plan taken in 2017 and spilling over into 2018 will be subject to VAT

Got beef?

The public is encouraged to report any complaint via the Ministry of Economy’s call centre on 600522225, which works from 7am to 10:30pm.

Input tax may include VAT paid on imports, domestic purchases and any VAT self-assessed by the businesses

In most countries where value-added tax (VAT) has been implemented, tax paid on most business expenses can be offset (or recovered) as input tax, but some expenditures do not qualify for tax recovery.

In the UAE too, some VAT outgo from businesses can be recovered. All VAT taxpayers must distinguish between recoverable and irrecoverable input tax to offset, claim and pay the right amount of tax in their accounts.

Input taxes are value added taxes due from or paid by a VAT-registered person in the course of trade or business on importation of goods, or local purchase of goods, properties, or services from a VAT-registered person.

The UAE’s VAT law has provisions for conditions under which businesses can recover VAT paid on inputs. The UAE law states that the input tax that is recoverable by a taxable person for any tax period is the total of input tax paid for goods and services which are used or intended to be used for making any taxable supplies.

Input tax may include VAT paid on imports, domestic purchases and any VAT self-assessed by the businesses such as VAT paid on the purchase of digital services. Executive regulations on the UAE VAT law specifies supplies on which VAT can’t be recovered such as entertainment services to anyone not employed by the person, including customers, potential customers, officials, or shareholder or other owners or investors.

Purchase of a motor vehicle, rented or leased for use in the business and is available for personal use and purchase of goods or services used by employees for no charge to them and for their personal benefit.

Source:gulfnews.com/business/economy/vat/can-uae-businesses-recover-vat-on-business-expenses-1.2148617