01 Feb
UAE VAT: Tax now like a routine part of life, say traders
On January first, a shopper at the Shaheen Supermarket in Abu Dhabi’s Khalidiya neighbourhood entered the store prepared for life with VAT: clenched within her hand was a mass of five and 10 fils coins.
The cashier, unfamiliar with the currency, refused to accept the unfamiliar coins. The customer geared up for a debate about legal tender and insisted that if her coins were not accepted, she would round down. The cashier simply shrugged his shoulders and agreed. She left the coins on the counter and there they sat, untouched by the unconcerned clerk.
Shoppers may have dreaded the 2018 arrival of VAT and the problems it could have caused, but one month on it has become a routine part of life.
In Abu Dhabi’s Hamdan Street souq, clerks say sales dropped long before the introduction of VAT due to the economic downtown. VAT has made little difference to their already slow sales.
“Business has been slow for three or four months,” said Abbas Ali, 33, an Iranian clerk at Al Shaqaiq Garments.
“There’s no work, business is down and it’s like this in the whole souq. Look at that shop, see how it’s closed?” he said, pointing to a shuttered storefront. “That was a gold shop. Two shops behind here have also closed. Look at the street, where are the people? They’re working and not buying. See my customers, they’re looking and not buying. Really I don’t know where the people are. Companies have cancelled everyone’s visa.”
Abu Dhabi’s Al Sharaiq Garments & Footwears. Victor Besa / The National
Al Shaqaiq sells low-priced gifts and ready-made clothing, like watches, prayer rugs, t-shirts and abayas. Tax is not charged for small purchases. “Why should I tax this man?” said Mr Ali when a customer bought a Dh10 T-shirt. “He’s my friend.”
Customers may be informed about the 5 per cent price increase, but this has not stopped them grumbling. “Customers are complaining too much,” said Haris Kallingalmoidu, a clerk at the Three Thirteen Baqala grocer. “Everyone’s complaining. Nag, nag, nag. Too much talking and questioning.”
Like many Baqala grocers, its prices are not listed. VAT is automatically calculated at the checkout and customers are not given receipts. They must trust.
Sales associates have attributed January’s slow sales to pre-VAT stockpiling. “Last month, people purchased all the things – gold, shoes, even grocery items,” said Deepesh Manjhani, a clerk at Silsila Trading, a textile shop. “They bought in quantities. Business was up last month and now it’s down, but it will be up in February.”
Haris Kalingalmoidu an Indian Baqala store owner. Victor Besa / The National
Bushra Rafiq, 35, a customer from Pakistan examining yards of cotton, said taxes have not caused her to change her spending. “We’re just thinking before we buy anything,” she said. “We just have to think before we buy.”
At Silsila, prices are negotiated by the metre with VAT added at the till. At this point, some customers refuse to pay and then, little can be done. At traditional markets like those on Hamdan Street, everything is considered negotiable and that includes tax. “It’s impossible,” said Mr Manjahni. “They say, ‘if you want it, give it to me’. We take the loss.”
In Fujairah, business owners and workers said that many customers still don’t understand the VAT and it has affected sales.
Abdulkareem Ibrahim, 32, from India, works at a local supermarket. He said sales had dropped by 30 per cent since the first of January due to the lack of understanding of VAT.
“People are afraid to buy and we noticed that recently. They don’t understand the tax and how its implemented on goods. Cigarette sales decreased by 40 per cent and soft drinks dropped by 30 per cent,” said Mr Ibrahim, who works at Jiyad supermarket in Fujairah. Cigarettes and fizzy drinks had already seen a rise in prices towards the end of last year due to the introduction of an excise tax.
Ahmad Tablis, a Syrian flower shop owner, said his sales dropped by 15 per cent this month.
“I don’t know exactly why there is a drop in our sales as the 5 per cent should not affect the prices that much, but it could be due to the confusion and not understanding the implementation of VAT. And the fact that some shops increased their prices more than 5 per cent without reason,” he said.
Mr Tablis said he himself still doesn’t know when he should pay VAT.
“I don’t know when we should pay the tax, but we are ready and the system in our shops has been modified accordingly.”
Mr G Khan, another flower shop owner, said he was unable to register his business for VAT as it was considered too small.
“I pay VAT to traders, but I still sell plants at regular prices without VAT. We sell a one dirham flower at the same price and that leaves us with very low profit and sometimes none,” he said.
“[The Friday] market has been affected with the low sales and the decreasing number of customers and we don’t know why.”
Fujairah residents said that some shops have used VAT as an excuse to raise prices, while others don’t give the correct change.
“I returned some meat I ordered from the butcher last week and refused to pay because he increased the prices by around 15 per cent. When I asked him why, he told me due to VAT,” said Noura Khalil, a 39-year-old Jordanian mother of five.
“He asked for Dh18 more for Dh120 worth meat,” she said.
Source: www.thenational.ae/uae/vat-in-the-uae-tax-now-a-routine-part-of-life-say-traders-1.700738
31 Jan
VAT on UAE shows of Bollywood, Hollywood Celebrities ?
Celebrities often come to UAE to attend events on the request of residents and citizens and are paid for this gesture.
Be it education, banking or entertainment, services industry is huge. Where there is no delivery of goods, that is characterised as service industry. And the recent application of VAT in the UAE covered both the categories with few exemptions.
When it comes to entertainment, Dubai is second home to dozens of celebrities – especially from Bollywood – who come here frequently to perform in front of thousands of fans and also in private parties invited by individuals. This entertainment sector is subject to five per cent value-added tax (VAT).
But the question arises whether all those Bollywood and Hollywood celebrities will also be subject to new tax for their services – read performances – provided in the UAE.
When asked tax experts, they said, as per UAE laws, Bollywood and Hollywood stars who want to continue performing here in the UAE will have to register with the Federal Tax Authority to obtain Tax Registration Number in order to pay VAT if the invitee is not registered with FTA.
As per UAE law, Naveen Sharma, chairman, The Institute of Chartered Accountants of India (Dubai Chapter), says every person, who does not have a place of residence in the UAE or any GCC country and who is not already register, shall register mandatorily if he makes supplies of goods and services in the UAE, and where no other person is obligated to pay the due tax on these supplies in the UAE.
“If a person is not a resident in the UAE and is required to register in accordance with the provisions of the Decree-Law, the Authority shall register him with effect from the date on which he or she started making supplies in the UAE, or from such earlier date as agreed between the Authority and the person, whether or not person notifies the authority of the liability to register for tax.
“Considering the above legislation of the law, it can be interpreted that, a person who is a Bollywood or a Hollywood celebrity, and not a resident in the UAE, comes to perform any service in the UAE will have to register mandatorily in case no other person is obligated to pay the VAT on the services performed by them in the UAE,” Sharma said.
The celebrities would have to register in his or her name as an individual with the Tax Authority by submitting the required details online on the FTA portal, he added.
Most – if not all – of the Bollywood celebrities of modern era have performed in the UAE and continue to perform. Even Hollywood stars are also invited time and again to perform in the UAE.
A PricewaterhouseCoopers report had forecast that the UAE’s leisure and entertainment market potential would reach 45 million visitors by 2021, with international tourists accounting for 30 million, while residents and friends and relatives of residents total a further 15 million.
Dilip Jain, Principal – VAT, Nimai Management Consultants, noted that in cases of celebrities performing in UAE, the organising event companies who bring celebrities are likely to be registered for VAT and would pay tax on the amount paid to celebrities.
“Where the performance of such services exceeds or is likely to exceed the threshold limit of Dh375,000 in 12 months, and the payment is received from an unregistered persons, then the celebrities will have to register for a Tax Registration Number with Federal Tax Authority and pay VAT. They can also appoint a legal representative to register on their behalf.”
According to Shailesh Khandelwal, CEO and founder, Shailesh Khandelwal Accounting & Book Keeping Services, the UAE VAT law states that if the taxable person imports concerned goods or services for the purpose of his business, then he shall be accounting for due tax in respect of these supplies.
But if celebrities or other service providers offer services to unregistered or non taxable persons in the UAE, they need to register themselves in the UAE. Otherwise, this will result in contravention of the UAE VAT law.
“Celebrities often come to UAE to attend various personal events on the request of residents and citizens of UAE and are paid for this gesture.”
However, the mandatory and voluntary threshold limits of Dh375,000 and Dh187,500, respectively, for registration under UAE VAT law are not applicable to non-resident suppliers of goods and services. Thereby, all non-resident suppliers supplying goods or services, where article 48 is not attracted, have to register and need to comply with UAE VAT law provisions even if the value is less than the threshold limits, Khandelwal added.
Source: www.khaleejtimes.com/business/vat-in-uae//will-bollywood-hollywood-celebrities-pay-vat-for-their-uae-shows-
30 Jan
More than 3,500 complaints on first day of VAT, says Economy Minister
There were 3,621 complaints to the Higher Committee of Consumer Protection on the first day of VAT implementation, according to the Ministry of Economy.
Two weeks later, daily complaints remained in the hundreds.
To address this, the committee is working to prevent any unjustifiable price hikes, said Sultan Al Mansoori, the Minister of Economy.
“The committee received growing calls from the consumers during the first days of the VAT application,” said Mr Al Mansoori at a recent Dubai meeting of the committee, according to state news agency Wam.
“People had some concerns but their worries have ebbed with the passage of time and by the end of the first fortnight of the application, the calls received by the committee declined from 3261 on the first day of the application to 493 on January 15.”
Most complaints concerned price hikes, tax registration numbers and erroneous calculations, said Khalid Ali Al Bustani, the director general of Federal Tax Authority.
“Traders and departments against whom the complaints were filed have been notified and were given a grace period to rectify their strategies as per the tax rules and condition,” said Mr Al Bustani, who attended the meeting.
Mohammed Al Shehhi, the undersecretary for economic affairs in the Ministry of Economy, said, “The committee is in constant follow-up of the market to prevent any violations and in case of any non-abidance, all legal measures have been taken against the offenders.”
Source: www.thenational.ae/uae/more-than-3-500-complaints-on-first-day-of-vat-says-economy-minister-1.699381
24 Jan
Now check the Authenticity of your Tax Invoice through the New Online VAT Calculator
The Federal Tax Authority (FTA) on Tuesday launched a Tax Registration Number (TRN) verification service on its website, where consumers can check the authenticity of tax invoices and ensure that the merchants and service providers issuing them are registered with the FTA.
The Authority also debuted the VAT Calculator, which allows consumers and service recipients to instantly calculate the Value Added Tax (VAT) due on their purchases of goods or services. This, in turn, makes it possible for the public to remain aware of their rights and ensures full transparency.
Sarah Al-Habshi, director of Tax Compliance and Enforcement at the Federal Tax Authority, said that the new services were part of the Authority’s efforts to protect consumers and prevent any attempts at price manipulation as the UAE tax system goes into effect. These services support and facilitate the Authority’s efforts to monitor markets in collaboration with relevant authorities and stakeholders.
The TRN Verification service is fast, accurate and seamless, Al-Habshi explained, adding that consumers can enter the TRN found on their invoices on the “TRN Verification” section of the “Getting Help” tab on the FTA website, then, if the number is correct, the website will display the company’s name in English and Arabic. If the company is not registered in the tax system, the number entered will not yield results.
Al-Habshi went on to note that the VAT Calculator is designed to be easy to use, and will be available on the FTA website, under the “Getting Help” tab. Once accessed, the page displays a box where the price excluding VAT can be entered, upon which the calculator will display the total tax amount and the total price including VAT.
Users can alternatively enter the full price (including VAT), where the calculator would display the original pre-tax price, as well as the tax amount.
Source: www.khaleejtimes.com/business/vat-in-uae/vat-in-uae-new-online-calculator-to-check-authenticity-of-tax-invoice
