New rule on vehicle and driving license services in Dubai

H.H. Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of Dubai Executive Council has issued Executive Council Resolution No. (57) of 2017 pertaining to Vehicle and Driving Licence Services.

The Resolution aims to enable RTA’s Licensing Agency to develop its services and utilise applications and smart solutions to facilitate the delivery of services.

Pursuant to the Resolution, the agency is responsible for issuance and renewal of driving licences and learning permits, conducting driving tests, issuance and renewal of occupational permits, desert driving permits, heavy bus and heavy truck driving permits, and special nature driving permits, according to the terms and conditions outlined in Federal Traffic Law No. (21) of 1995 and other approved bylaws.

Pursuant to the Resolution, RTA’s Licencing Agency is responsible for specifying the locations and special procedures for driving licences and permits, issuance and renewal of examiners’ permits according to RTA’s approved procedures, establishing and approving a system for classifying examiners, approving the specification of testing vehicles, issuing licences for the drivers’ testing yard and conducting assessments, monitoring and inspections to ensure accurate implementation of this Resolution.

According to the Resolution, the RTA is authorised to collect fees for the licencing and permit services listed in Appendix (1) of this Resolution. People with disabilities and people with special needs enjoy 50 percent discount on all services included in this Resolution.

RTA’s Director-General and Chairman of the Board of Executive Directors will issue the required bylaws to implement this Resolution. These bylaws will be published in the Dubai Government’s Official Gazette.

This Resolution annuls any other legislation that contradicts or challenges its articles. The Resolution shall be published in the Official Gazette and shall be considered valid following 60 days of the date of publication.

Sheikh Mohammed amends law on Interim Property Registration in Dubai

In his capacity as Ruler of Dubai, the UAE's Vice President and Prime Minister, His Highness Sheikh Mohammed bin Rashid Al Maktoum, has issued Law No. (19) of 2017 partially amending Law No. (13) of 2008 on Interim Property Registration in Dubai. The amendments aim to protect real estate investors and developers.

The new Law amends Article (11) of Law No. (13) of 2008, which specifies policies and procedures that will be applied in cases of breaches of sale contracts by the buyer. The Law specifies that in such an event, the developer must notify the Dubai Land Department (DLD). Once the notification is received, the Department must give a 30-day notice to the purchaser. The notice must be dated and given in writing and delivered to the purchaser directly by registered mail, electronic mail or any other method specified by the Department. If the developer and buyer reach an amicable settlement, it must be added to the sale contract and signed by both parties. If the buyer fails to fulfil contractual obligations or accept an amicable settlement, the Department may issue an official document stating that the developer has fulfilled his legal obligations, specifying the percentage of completion of the property.

After the developer receives this document from the Department, the developer is free to take any of the following actions: If the percentage of completion is over 80%, the developer can ask the purchaser to abide by the terms of the sale contract, confiscate the paid amounts and obligate the buyer to make the remainder of the payment specified in the contract or otherwise request the Department to auction the property to collect the remaining amount. The buyer is also obligated to pay any expenses arising from the auction. The developer may also void the sale contract solely, retain up to 40% of the sale contract’s value and return the remaining amount to the buyer within a year of the date of contract cancellation or within 60 days of the date of re-selling the property, whichever is earlier.

If the percentage of completion is between 60% and 80%, the developer may void the sale contract solely, retain not more than 40% of the sale contract’s value and return the remaining amount to the purchaser within a year of the date of contract cancellation or within 60 days of the date of re-selling the property, whichever is earlier.
If the percentage of completion is less than 60%, the developer may void the sale contract solely, retain up to 25% of the sale contract’s value and return the remaining amount to the buyer within one year of the date of contract cancellation or within 60 days of the date of re-selling the property, whichever is earlier.

If the developer did not initiate the work on the property for reasons beyond his control and without negligence, the developer may void the sale contract solely, deduct not more than 30% of the paid money and return the remaining amount to the purchaser within 60 days of the date of re-selling the property, whichever is earlier.

According to the new Law, if the project is cancelled by a resolution from RERA, the developer must refund all payments made by the buyer, pursuant to Law No. (8) of 2007 concerning Escrow Accounts for Real Estate Development in Dubai.

Pursuant to the new Law, the procedures prescribed in Article (11) of Law No. (13) of 2008 are not applicable to land sale contracts. Such a sale remains subject to provisions stated in the sale contract.

This Law annuls any other legislation that contradicts or challenges its articles and is valid from the date of its publication in the Official Gazette.

Registered businesses must file excise tax returns before 15th November in UAE

The Federal Tax Authority (FTA) has called upon businesses registered for the excise tax to file their October returns before the deadline on November 15, 2017, in order to avoid the penalties.

The authority has stressed the necessity of filing returns regularly before the 15th of every month for the previous tax period. All businesses registered for Excise Tax must pay the due tax on excisable goods (50 percent on carbonated drinks, 100 percent on tobacco products and energy drinks) to avoid penalties stipulated in Cabinet Decision No. (40) of 2017 on Administrative Penalties for Violations of the Tax Laws in the UAE.

"Since the beginning of November, businesses registered for excise tax have been consistently complying with their requirements and deadlines, filing their tax returns on time. We urge those who haven't done so yet to file their returns before the deadline of November 15, 2017, and settle the payable tax stated in the submitted excise tax return, in order to fulfil their obligations according to the tax procedures in the UAE," Khalid Al Bustani, director-general of the Federal Tax Authority, said.

The Cabinet Decision No. (40) of 2017 on Administrative Penalties for Violations of the Tax Laws in the UAE applies to all the listed violations in the Federal Law No. (7) of 2017 on Tax Procedures and Federal Decree-Law No. (7) of 2017 on excise tax. According to this, the failure of the registrant to submit the tax return within the timeframe specified in the Tax Law will subject them to an automatic Dh1,000 penalty in the first time and Dh2,000 in case of repetition within 24 months.

The Cabinet Decision also states that if a taxable person fails to settle the payable tax stated on the submitted tax return or tax assessment he/she was notified of, within the timeframe specified in the tax law, he will be obligated to pay a late payment penalty of 2 per cent of the unpaid tax - due immediately once the payment of payable tax is late; 4 per cent, due on the seventh day following the deadline for payment; and a 1 per cent daily penalty will be charged on any amount that is still unpaid one calendar month following the deadline for payment, with the upper ceiling being 300 per cent.

Businesses are also required to ensure the accuracy of the data being submitted, as the submittal of an incorrect tax return by the registrant can incur a fixed penalty of Dh3,000 plus a percentage-based penalty of up to 50 percent of the amount unpaid.

UAE residents to pay VAT on food, water, power

Water, food and electricity bills in the UAE will be subject to the 5 percent value-added tax from January 1, 2018.

With 35 business days left until the implementation of value added tax in the UAE, final details have emerged about which goods and services will be subject to the levy and which will be zero-rated and exempt.

The value-added tax, known in some countries as goods and services tax, or GST, is a consumption levy imposed on a product at each stage of production, before the final sale.

A 5 percent VAT is set to come into force in the UAE and Saudi Arabia on January 1 with the rest of the GCC following by the beginning of the following year. In the UAE, VAT could generate Dh12 billion in its first year and Dh20bn in its second year, according to Sultan Al Mansouri, the Minister of Economy.According to the executive regulation which has been approved by the UAE Cabinet and will be issued soon, water and electricity are considered supplied goods.In article 2, headed “Supplies of goods”, it says: “A supply of water and all forms of energy including electricity and gas… whether used for lighting, or heating, or cooling, or air conditioning or any other purposes.”

VAT on Education 

Under the VAT regulation, higher education institutes which are more than 50 percent funded by the government, will not be charged VAT but the rest will be. 

Khalid Al Bustani, director general of Federal Tax Authority, on Wednesday said the tourists in the UAE will also get refunds on the returns. He said the authority is working with the parties involved in the project and expected to be rolled out ahead of VAT implementation.

However following services shall be taxable at 5 percent even though provided by recognized educational institutions:

1. Goods & services supplied to persons who are not enrolled in the institute.

2. Any goods other than educational material provided which are not related to the curriculum of the educational institute.

3. Supply of School Uniforms as required by the educational institute.

4. Providing electronic devices irrespective of whether or not supplied as a part of educational services.

5. Foods & Beverages supplied at the educational institutions

6. Excursions or field trips unless directly related to the curriculum of the educational services.

7. Extracurricular activities provided by or through the educational institutions.

8. Supply of membership in a student organization.

UAE introducing Video conferencing in civil trials from 2018

A new law approved by President His Highness Shaikh Khalifa Bin Zayed Al Nahyan will further promote rule of law, fast-track civil trials and keep pace with advanced technologies, Sultan Bin Saeed Al Badi, Minister of Justice. Al Badi said changes in the Civil Procedures Code will allow, starting from next year, video conferencing in civil court trials and specialised courts to hear labour, financial, contracting and intellectual property, among other, cases.

“Inspired by the French Tribunals de Commerce, these courts will be presided by a judge, but other members on the bench will be experts, but not career judges,” Al Badi said in a press briefing held at the Ministry of Justice.

Al Badi added rulings will be given by the presiding judge, but experts will assist the judge come to the final conclusion.

Al Badi said that this fast-track justice for individuals as these courts will ensure quicker verdicts without impacting the integrity of law as well as save expert charges which burdened litigants.The Justice Minister said the changes will also allow video conferencing in civil trials. Defendants, witnesses, experts and translators will appear through video conferencing.

The move, Al Badi said, is also meant to avoid unnecessary delays and backlog in civil trials.

Al Badi said the law would also make it easier for police and prosecutors, as investigators would not have to carry the case files from one spot to another.

The law applies the same conditions as regular court hearings, including confidentiality of procedures that have been filmed, and protecting the material from being exchanged, copied or deleted, except with permission from the court.

Videoconferencing would also be of particular benefit in judicial procedures with foreign countries and testimonies by overseas experts.

Al Badi said the UAE has a judicial system that is on a par with global standards that ensures the rights of society, both individuals and organisations, and effectively contributes to achieving the desired goals of strategic plans that sustain the UAE’s competitiveness.

The Justice Minister affirmed that by introducing these changes into the Civil Procedures Code, the UAE aims to become among the world’s top performers in rule of law.

“A strategic goal of the UAE is to become one of the top 25 performers in the World Justice Project (WJP) Rule of Law Index, during the next five years,” the minister said.

Last year, the UAE was ranked 33 in the Rule of Law Index, whose results strengthen the UAE’s status as a leading trade, finance, investment and tourism hub with a distinguished record in the rule of law, justice, safety, security and other unique features.

According to the index, the UAE’s overall rule of law performance places it at 30 out of 36 among high-income countries; and 33 out of 113 countries and jurisdictions worldwide.