Wednesday, January 17, 2018

Tax authority defers date to file returns Vat in UAE

The Federal Tax Authority (FTA) has relaxed the timeline for filing the first value-added tax (VAT) returns, easing reporting and compliance pressure on companies, especially SMEs.

 Earlier, the first tax return filing for companies with more than Dh150 million turnover was one month. For others, it was quarterly. Now, firms can file their first tax returns after four or five months in June as per the new timelines appearing on the FTA's dashboard after log-in by a member company. Such an extension in filing returns shall help firms to better comply.

"Earlier today, we have seen some relaxation by the FTA with respect to the VAT return period. The FTA has provided the first VAT return period from January 1 to May 31 and subsequently on a quarterly basis. This means the first return will need to be filed on or before June 28 and later returns from June 1 to August 31, September 1 to November 30, December 1 to February 28-29," said Anurag Chaturvedi, senior director, Crowe Horwath.

He said all businesses must log onto the FTA's website and check the tax period under their profile. "Some businesses have been given one month and others have been given five months," Chaturvedi said.

Pratik Shah, partner, WTS Dhruva Consultants, said in order to ensure ease of business under VAT, the FTA has relaxed the timeline for filing the first VAT return which would enable many businesses to gear up for the time loss. Businesses can strive to be fully compliant in terms of reporting VAT obligations to authorities.

Most of the micro, small and medium enterprises have been granted five months, four months and so on as their filing period for the first return, Shah added.

"This will enable various entities to cope up with VAT implementation requirements and ensure they do not fall on the wrong side of the legal provisions," Shah observed.

Along with Saudi Arabia, the UAE levied five per cent VAT on goods and services as part of a GCC agreement.

"Now, businesses need to acknowledge that VAT is a business change and not just an accounting change and accordingly utilise this time bonus to streamline all business functions as per the provisions of VAT to ensure business runs in line with policies," he added.

He said the teething issues post January 1, 2018, on day-to-day compliance are slowly settling down.

Chaturvedi believes this relaxation is meant for clubs, charities and associations to make their first return filing easier. "This relaxation benefits taxpayers and allows them more time to administer the business and structure processes to comply with regulations," he added.

Saturday, January 13, 2018

Indian passports may no longer be used as address proof

The Indian passport is set to go through a lot of changes, if the proposal of the ministry of external affairs is implemented.

They will no longer be valid proof of address; a Hindustan Times report says. Reason: The current last page with the passport holder's address and the names of the guardian will be dropped. 

What's more, to make immigration and screening more efficient, orange coloured passports may be issued for individuals in the emigration check required (ECR) category.

Surendera Kumar, under-secretary of policy and legal matters at the consular, passport and visa division of the ministry, was quoted in the report as saying that, "The decision to keep the last page of the passport blank has been taken" to protect the details contained.

Though not printed, the details will be saved on official systems and remain accessible for immigration officials and agencies concerned by scanning a barcode present, a report in CN Traveler said.

Apart from this, the ministry is also mulling changing colour of some passports of a specific category. At present, Indian passports are issued in three colours: white for government officers or to those people who visit other countries for the official work of the government; red for diplomats; and blue for all others across two categories - those who require emigration check (ECR) and those who do not (ECNR), the Hindustan Times report says.

Those in the ECR category will have orange passports, Kumar said. This will increase the speed of the process of emigration as the colour of the passport will make it clear whether the emigration check is required or not. In this case too, existing ECR passports will be valid, according to the report.

Wednesday, January 10, 2018

Free zones in UAE Exempted from VAT

The Federal Tax Authority on Wednesday posted an unofficial translation of Cabinet Decision No. (59) of 2017 on Designated Zones for the purposes of the Federal Decree-Law No. (8) of 2017 on Value Added Tax [VAT].

The post states that the UAE’s Cabinet, under its authority, has added the following free zones to the FTA’s list of Designated Zones. These Designated Zones are outside the UAE for VAT purposes and therefore are not subject to VAT in the UAE for products and services.
Here's the complete list of Designated Zones as per the Annex to the Cabinet Decision No (59) of 2017 No. Designated Zones.

Abu Dhabi

1. Free Trade Zone of Khalifa Port

2. Abu Dhabi Airport Free Zone

3. Khalifa Industrial Zone


4. Jebel Ali Free Zone (North-South)

5. Dubai Cars and Automotive Zone (DUCAMZ)

6. Dubai Textile City

7. Free Zone Area in Al Quoz

8. Free Zone Area in Al Qusais

9. Dubai Aviation City

10. Dubai Airport Free Zone


11. Hamriyah Free Zone

12. Sharjah Airport International Free Zone


13. Ajman Free Zone

No. Designated Zones (Umm Al Quwain)

14. Umm Al Quwain Free Trade Zone in Ahmed Bin Rashid Port

15. Umm Al Quwain Free Trade Zone on Shaikh Mohammad Bin Zayed Road

Ras Al Khaimah

16. RAK Free Trade Zone

17. RAK Maritime City Free Zone

18. RAK Airport Free Zone


19. Fujairah Free Zone

20. FOIZ (Fujairah Oil Industry Zone)