Posted on Dec 01, 2017
Declining the news of the delay in implementation of VAT in UAE Khalid Ali Al Bustani, director general of the Federal Tax Authority, says VAT will start as planned on Jan 1 2018.
A statement was given by the UAE banker that the financial institutions in the UAE are not yet ready for the implementation of the value-added tax, which is set to come into effect within weeks.
Also, AbdulAziz Al Ghurair, Chairman of the UAE Banks Federation told reporters at the banking event held in Abu Dhabi that “We call to postpone VAT implementation to give time to all the sectors to implement it correctly, whether in banking, insurance, or other sectors.” He further added, “Neither banks, nor insurance companies are ready, we need at least six months from the time we receive all the detailed implementing regulations to be ready, along with details for each sector, and how to calculate the tax for each product.”
In response to the statement made by the banker Al Bustani, director general of the Federal Tax Authority, said in an interview that the UAE is fully committed to introducing VAT on January 1 despite calls for it to be put back by a senior banker and there would be no delay to its implementation. He also added that the authority is seeing a surge in registrations as the deadline for companies to register for VAT looms.
Pointing out at the efficiency of business sectors Al Bustani stated that the cooperation from the business sector had been "commendable", as businesses and institutions took advantage to meet their tax obligations and ensure full and perfect compliance with the VAT system.
Al Bustani asserted that there is no discussion" about delaying agreements to bring in the new tax in the new year, adding that the law surrounding VAT clearly states that January 1, 2018 is the start date.
Thus every business entity whose taxable supplies made within the UAE exceeds the mandatory registration threshold of AED375,000 over the previous 12-month period must obtain VAT registration.
According to the tax experts in UAE 5% VAT will not be levied on amount withdrawn from ATMs of banks other than their own bank - but only on the Dh2 fee will be charged by the banks.
Executive Regulations for the Federal Decree-Law No. (8) of 2017 on Value Added Tax, VAT were signed and approved by the Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE.