+971 4 438 50 44    info@optionsrealestate.ae

Sheikh Mohammed signs VAT Executive Regulation

Nov 28 - Khaleej Times

The tax will go into force effective January 2018

The Ministry of Finance, MoF, Monday announced that His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, signed the Executive Regulation for the Federal Decree-Law No. (8) of 2017 on Value Added Tax, VAT.

The Regulation defines VAT as the 5% tax imposed on the import and supply of goods and services at each stage of production and distribution, including what is a deemed supply, with the exception of specific supplies subject to the zero rate and what is exempted as specified in the Decree-Law.

The tax will go into force effective January 2018, and all business have to take all necessary measures to avoid the risk of non-registration by 1st January, 2018, which would entail fines as stipulated in Cabinet Decision No. 40 of 2017 on Administrative Penalties for Violations of Tax Laws in the UAE.

Commenting on the milestone, Younis Haji Al Khoori, Undersecretary of MoF, said, "Today's signing of the Executive Regulation by the Vice President, Prime Minister and Ruler of Dubai, His Highness Sheikh Mohammed bin Rashid Al Maktoum, marks a new milestone in the application of an efficient taxation system in line with best international standards with the ultimate objective of improving performance of primary sectors and enhancing social welfare."

The first title of the Regulation includes the definitions of terms used, while the second title deals with supply, which includes articles regulating the supply of goods and services, as well as supplies that consist of more than one component and the exceptions related to deemed supplies.

The third title of the document tackles the subject of registration, such as mandatory and voluntary registration, related parties, conditions to be met to register tax groups and appointing a representative member, deregistration, exception from registration, registration on law coming into effect and obligations to be met before deregistration.

Meanwhile, the fourth title looks into rules relating to supply, including articles on the date of supply, place of supply for goods, place of supply of services for real estate, transport services, telecommunications and electronic services, intra-GCC supplies, the market value, prices to be inclusive of tax, discounts, subsidies and vouchers.

Furthermore, title five discusses profit margins and explains how to calculate VAT based on profit margins, while title six addresses zero-rated goods and services, including telecommunications, international transportation of passengers or goods, investment grade precious metals, new and converted residential buildings, as well as healthcare, education and buildings earmarked for charity.

Title seven clarifies provisions relating to products and services exempt from value added tax, namely: the supply of certain financial services as specified in the Executive Regulation, the supply of residential (non-zero-rated) buildings either by sale or lease, the supply of bare land, and the supply of local passenger transport.

The eighth title of the Regulation then addresses accounting for tax on specific supplies and includes articles relating to supplies with more than one component, general provisions in relation to import of goods and applying the reverse charge on goods and services, as well as moving goods to implementing states and imports by non-registered persons.

In title nine, the Executive Regulation address Designated Zones in article (51), while title 10 provides further detail on calculating due tax, recovery of input tax relating to exempt supplies, input tax not recoverable, and special cases for input tax. The following titles 11 includes article (55) on apportioning input tax and article (56) on adjusting input tax after recovery, whereas title 12 addresses the capital asset scheme in article (57) and adjustments within the capital asset scheme in article (58).

Title 13 of the Regulation includes article (59) on tax invoices, article (60) on tax credit notes and article (61) on fractions of the fils. Then in title 14, the Executive Regulation discusses Tax Periods and Tax Returns, before title 15 goes into recovery of excess tax in article (65). Adding to that, title 16 tackles recovery in other cases and includes article (66) on new housing for nationals, article (67) on business visitors, article (68) on tourists and article (69) on foreign governments.

The 17th title includes article (70) on Transitional Rules, article (71) on record-keeping requirements and article (72) on keeping records of supplies made. Meanwhile, the 18th and final titles discusses closing provisions.



VAT exemptions announced for residential units in UAE

shutterstock 388233973 copy

The rent or sale of a residential part of the building shall be treated as zero-rated or exempt. 

Residential units in the UAE will be largely exempt from Value Added Tax (VAT), with the exception of the first supply of a new residential building within the first three years of its construction, according to a statement by the Federal Tax Authority, FTA.

The supply of commercial real estate, selling or leasing, will be subject to the Value Added Tax, VAT, at 5% from 2018.

The rent or sale of a residential part of the building shall be treated as zero-rated or exempt, depending on whether this is a first supply or a subsequent supply, the statement said.

The rent or sale of a commercial part of the building, however, shall be treated as subject to VAT at 5%.

The first supply of a new residential building within the first three years of it being constructed shall be zero-rated. All subsequent supplies shall be exempt, even if within the first three years.

The owner of any building that is not residential will have to register if the value of the supplies over the preceding 12 months exceed $102,096 (AED375,000) in value, or if it is expected that they will exceed the amount over the coming 30 days.

The FTA explained that owners of residential buildings do not register for VAT if they do not have any other business activities.

Owners who do have other business activities, however, must check to see whether or not they are required to register.

The tax incurred by the owner on the building needs to be apportioned where there is an exempt supply, and the portion related to the taxable supply (at 0% and 5%) may be recovered.


by Jumana Abdel-Razzaq



'Dubai Safari to be ready before National Day'

Lootah says wildlife project to have new soft opening in early November

Sept 27 - ORE Blog

Dubai: Dubai’s much-awaited Dh1-billion wildlife project, Dubai Safari, will be ready ahead of the 46th National Day of the UAE, a top official confirmed to Gulf News on Monday. 

The project had missed its previous opening date.

However, work is going in full swing and is expected to be wrapped up by the end of November, confirmed Hussain Nasser Lootah, director general of Dubai Municipality. 

Speaking to Gulf News on the sidelines of a press conference at the municipality headquarters, Lootah said: “We are expecting to complete and hope to open Dubai Safari by the end of November.”

Continue Reading

Dubai Land Department signs an agreement with Mashreq

Under the new agreement, Mashreq will provide banking services for real estate transactions made both inside and outside the country

Sept 18 - ORE Blog

Dubai: The Dubai Land Department (DLD) announced that it has signed an agreement with Mashreq concerning banking solutions for the transaction services of the “Tarweej” real estate promotion initiative. The agreement was signed by Sultan Butti Bin Mejren, Director General of DLD, and Abdul Aziz Al Ghurair, CEO of Mashreq.

Under the new agreement, Mashreq will provide banking services for real estate transactions made both inside and outside the country. In addition, the bank will receive priority as a partner for real estate promotion in accordance with the laws applied in each country, and will provide real estate customers and investors with consultation and information on products to meet their needs.

Continue Reading

Details of World Expo 2020 hub revealed

Ahmad Al Khatib, the man in-charge of delivering the Expo 2020 Dubai site, tells PW what makes Al Wasl Plaza the heart of the spectacular global event

Sept 12 - ORE Blog Expo 2020

Halfway between Abu Dhabi and Dubai, covering an area of 4.38 sq km in Dubai South, is where the most diverse World Expo ever is going to be staged starting in October 2020.

Millions of visitors will see the event unfold and hear the story of human ingenuity. Most importantly, they will witness the UAE’s belief in inclusivity, collaboration, diversity and innovation.

Continue Reading