ETISALAT, DU TO CHARGE VAT ON PRODUCTS AND SERVICES
The UAE’s telecom service providers, etisalat and du, will charge five per cent value added tax on the services and products they offer to the consumers in the country.
“Starting from the 1st of January 2018, most of etisalat’s products and services shall be subject to a five per cent value added tax in compliance with federal laws and regulations levying and regulating the tax in the UAE,” it said in a statement.
Du also said on its website that it would apply the standard VAT rate of five per cent from January 2018 to its products and services.
His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, on Monday approved the executive regulations for VAT.
The UAE will impose five per cent VAT from 7am on January 1, 2018, on a host of goods and services. VAT is a consumption tax that the end-user is obligated to pay and etisalat will be only acting as a collection agent on behalf of the taxation authority, the company added.
Citing an example, it said a bundle of Dh100 would cost Dh105 from January 2018.
Etisalat urged all its business customers who are entitled to recover their input VAT must officially submit their VAT registration details including tax registration number with supporting evidence to etisalat by December 21, 2017, at the latest either through contacting their account manager or on www.etisalat.ae/businesstrn in order to be provided with a full VAT invoice in January 2018.
Moreover, the company will also start charging Dh25 as late payment fee from subscribers from next month. The late payment charges will be applicable to landline and mobile.
VAT’S NEXT? THE COUNTDOWN BEGINS
All businesses in the UAE, whose taxable supplies and imports of goods and services exceed Dh375,000 over the past 12 months, have to expedite the registration process for value added tax (VAT) to meet the January 1, 2018 deadline and avoid the risk of incurring penalties, the Federal Tax Authority (FTA) said on Wednesday.
The FTA’s circular, reminding businesses of the administrative penalty of Dh20,000, as well as additional penalties related to late payment of tax, comes in the wake of the issuance of the VAT Executive Regulation on Tuesday. His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, signed the eagerly-awaited regulation, marking a new milestone in the application of an efficient taxation system in line with best international standards.
The FTA circular, which clarifies the registration procedure for VAT, also seeks to remove doubts about the on-time implementation of the landmark tax reform, which is expected to propel the UAE into the next trajectory of growth.
The five per cent VAT is a consumer-based tax on the supply of both goods and services, and is designed so that only the ultimate consumer bears the burden. With the exception of exempt and zero-rated supplies of goods and services, VAT will be payable on consumer goods and services by everyone and, as such.
The introduction of VAT in the GCC has been driven by the World Bank and its initiatives to move GCC states’ economies away from a reliance on oil and gas. VAT seeks to secure more state income, which is estimated to be around Dh12 billion fort the UAE in the first year.
The UAE has already embarked on a new journey on October 1 when it started implementing excise tax, exactly three months ahead of the launch of VAT, the region-wide tax initiative.
The registration portal is available to all businesses around the clock. The FTA website has been specially designed to provide guidance to registrars on the completion of their applications, said the FTA.
“Businesses are required to visit the website www.tax.gov.ae, select the e-Services portal, sign up and create an account. Once the email has been verified, they can log in and register,” said the circular.
The FTA has urged businesses to provide accurate information and make sure they enter it properly into the application form. To complete the registration process, scanned documents must be attached, including the business or trade licence, passport/Emirates ID (for UAE residents) of the manager or owner of the business, and the authorised signatory (if the signatory is not the manager him/herself), as well as proof of authorisation for the manager or signatory (e.g. articles of association, power of attorney attested by notary, etc.).
It said issuing a Tax Registration Number (TRN) may require up to 20 working days or less. “Therefore, and in order to ensure that the application is processed – and the TRN issued before January 1, 2018 – the FTA urges businesses to complete their registration to avoid the penalties as per the Cabinet Decision No. (40) of 2017 on Administrative Penalties for Violations of Tax Laws in the UAE.”
“Two or more legal persons conducting business in partnership may apply for Tax Registration as a Tax Group if: each of them has a place of establishment or fixed establishment in the UAE; if the persons are related parties, i.e. they are not separated in economic, financial or regulatory aspects; or if one or more of the Persons in the group control the others,” FTA circular said.
It said persons intending to register as a Tax Group should nominate a representative member who shall apply to register them. The representative member applies first by completing a VAT registration application stating that the intention is to be part of a Tax Group, FTA said.
“After the representative member is issued with a Tax Identification Number (TIN), the additional members of the group may be added through Tax Group Registration. Members can be added whether they have registered separately or not. After the process is complete and the application to add members has been submitted, a TRN will be issued for the whole Group. More information can be found in the Legislation and Guides section, on the FTA website,” it said.
UAE’S ISLAMIC ECONOMY ECOSYSTEM THRIVES
The UAE, the world’s number two in the Global Islamic Economy Indicator, has been ranked first among 10 countries in three key sector indicators, further reinforcing its success in pioneering an Islamic economy ecosystem.
The UAE leads in sectors, including modest fashion, halal media and recreation, and halal pharmaceuticals and cosmetics, according to the ‘State of the Global Islamic Economy’ report released on Monday by the Dubai Islamic Economy Development Centre (DIEDC).
According to the report, Muslim spend on halal food and beverage is forecast to reach $1.93 trillion, while Islamic finance assets are expected to surge to $3.8 trillion by 2022.
The report was launched by Mustafa Adil, head of Islamic finance, in the presence of Abdulla Mohammed Al Awar, CEO of DIEDC, alongside prominent experts, senior officials and stakeholders from across the Islamic economy sectors.
Sultan bin Saeed Al Mansouri, the UAE Minister of Economy and chairman of DIEDC, said the latest Global Islamic Economy Indicator testifies to the success of the UAE in pioneering an appropriate Islamic economy ecosystem within a short period, when compared with other nations that have been active in fostering this niche economic system – especially in the halal industries space.
“Shariah-compliant sectors are central to the Islamic economic system and attract the most investment – thereby facilitating an Islamic economy-friendly environment,” he said.
Al Mansouri said the indicator evaluated the health of the Islamic economy ecosystem across more than 73 countries, based on equally weighted key metric categories, including governance, awareness and social considerations. “The UAE’s exceptional performance highlights the synergy between the government’s wise vision and the practices of the private sector.”
He said the Islamic economy is at the heart of the global economic movement, which aims at stimulating growth, achieving sustainability and equity in development.
In his speech during the Islamic Economy Award 2017, he said the ceremony is not only a celebration of individual and collective contributions that are driving the growth of Islamic economy sectors locally and internationally, but also a celebration of Dubai’s initiatives and the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, that responded to the urgent global need to develop an ethical and integrated economic system.
“Today, the presence of Islamic economy is exemplified in the interest of governments, private sector institutions and investors from around the world in identifying and developing a greater understanding of the principles and standards of Islamic financial products. The Islamic economy has placed Dubai and the UAE at the centre of this international orientation, making the country a key incubator of its standards, cultures and innovations. And here lies the importance of the Islamic Economy Award that helps innovators present models for the future of this promising economic system,” Al Mansouri added.
SPECIAL REPORT: WHY YOU’LL CONTINUE TO SHOP TILL YOU DROP
The future of the UAE’s retail sector looks bright, with developers witnessing a returning confidence from retailers both large and small, as the country makes its way into 2018.
“We are seeing a demand for retail space due to the spending power of residents, anticipated growth in tourism and a growing expatriate population with high incomes, which has in our experience, provided retail tenants with confidence in the market, and from that we’re seeing more choice for consumers,” said Rami Chehabeddine, CIO at National Investment Corporation, the breakwater developer and owner of Marina Mall Abu Dhabi.
Marina Mall Abu Dhabi, which recently announced a Dh3 billion expansion and upgrade plan, featuring a new waterfront promenade that will start development in 2018, expects the next year to be an exciting one. “With our new expansion plans, we will reinforce our position as a premium leisure and entertainment destination for all ages in the community, providing a complete overall experience that merges retail, entertainment and dining together,” Chehabeddine said.
Experts estimate the value of the UAE’s retail sector to stand at $56.6 billion at the end of 2016 and retail sales turnover to exceed $71 billion by 2021. Demand within the UAE’s retail sector remained steady last year, supported by a 5.8 per cent year-on-year increase in footfall within shopping malls
UAE’S PHOENIX GROUP RAISES DH752M
Dubai – The UAE-based $2-billion Phoenix Group, a global agricultural and food company engaged in the production, procurement, processing, merchandising, distribution, announced the setting up of a $205 million (Dh752.35 million) borrowing base facility to expand its rice business in India, Asia and Africa.
The seven-bank consortium is led by Standard Chartered Bank, Singapore including First Abu Dhabi Bank.
Dubai MultiCommodities Centre (DMCC) registered Group is now set to become the world’s largest rice business and a major player in the global agri foods business that will allow the group to double its turnover in the next 3-5 years. Already amongst the top three global rice trading companies, Phoenix Group is on track to become the world’s largest rice business by volume.
REVEALED: WHAT, WHERE AND HOW MUCH UAE RESIDENTS EAT
The UAE is home to over 200 nationalities, offering a great mix and varieties of dining out options both to the residents and tourists. Be it Italian, Continental, Arabic or any other cuisine, there are some cuisines which are more in demand than the others.
In a place as multicultural as the UAE, operators are constantly trying to find cuisine offers to please the palates of the different population segments. Although there have been a number of new offerings in recent times, the top choices of cuisine in the UAE have largely remained consistent.