UAE to implement 5 per cent VAT from January 2018 to Business and Landlords

Business owners and landlords must pay a five per cent value-added tax (VAT) starting January 2018, announced the Federal National Council (FNC) on Wednesday in the UAE capital.

The FNC approved the draft law, which serves as a legal framework and organises all the regulations of taxes, which aims to generate revenue for the federal government and enabling a sustainable economic growth.

Private businesses making Dh370,000 and more a year will have to pay VAT. The tax is binding on landlords renting out properties as well, which could mean a rise in rents for tenants across the UAE.

There are currently more than 450,000 private owned companies in the UAE, and the number is expected to soon reach 600,000, which will see a growth in the annual GDP, said Obaid Humaid Al Tayer, the Minister of State for Financial Affairs.

Last year, the GCC countries, including the UAE, Saudi Arabia, Qatar, Bahrain and Oman, signed an agreement to implement a VAT of five per cent.

Al Tayer said the law will be implemented in the UAE on January 1, 2018. However, all GCC members have until January 1, 2019, to implement the rule.

"VAT is the only law that is currently on the legislative committee, as well as the selective items tax on tobacco, fizzy drinks and energy drinks."

The minister said the effect of the VAT on people in general, including residents and consumers, will start with 1.3 percent and will drop with time, whereas businesses will face 0.06 percent, and 0.04 on gross domestic product (GDP) growth when implemented.The law will also provide the authority measures to address procedures for tax collectors, tax auditing, tax avoidance, violations and the penalties.

The passed draft law also stipulates that fines for those avoiding the pay their taxes should not exceed five times the value of the evaded tax.

The minister said that by 2021 the aim is to generate 80 per cent of UAE's economy by non-oil sectors, while the remaining 20 percent generated by oil, as opposed to the current 80 percent GDP.

Selective items tax

The GCC countries also agreed to introduce 'selective items tax', including on tobacco, soft drinks and energy drinks.

The cap for the 'selected items tax' is 100 per cent, in which Saudi Arabia has already drafted its law and placed a 100 percent tax on tobacco while placing 35 percent on soft drinks.

Although the UAE's Ministry of Finance has yet to confirm the amount of tax implemented on its selected items, Al Tayer said it is expected to be applied this year.

"The cap is 100 percent, it could be less depending on each country," said Al Tayer.

"Once the law is issued, it will say when it will be implemented," he added.

The revenue generated from tobacco products alone is expected to reach Dh2 billion a year.

Get Dubai Residence Visa for your family

If you are a Dubai resident visa holder and want to bring your family members, wife and children to UAE, you must first apply for an entry residence visa and after they arrive, you have up to 30 days to stamp resident visa.

(New residence visas or Renewal of existing visa linked to medical insurance in Dubai
With effect from August 1, 2015, no new residence visas or renewal of existing visa applications will be processed without mandatory health insurance coverage in Dubai.)

Criteria for Residence visa

 

Your monthly salary should not be less than AED 4000 or AED 3000 + accommodation. If you want to sponsor a residence visa for your parents, your minimum monthly salary should be AED 10,000. See residence visa for parents separately.

Documents Required:

• Typed Application form

• Salary certificate for government employee or attested work contract of employee

• 3 months bank statement for long-time residents. New residents can submit the 1-month bank statement or bank letter confirming salary transfer.

• Attested tenancy contract, Emirates ID card and labour card

• Marriage certificate that has been attested by UAE authorities (for UAE marriages) or in your home country for spouse sponsorship

• Passports (original) and copies of both sponsor and family member/s

• Medical check-up report of spouse or children over 15 years of age from authorised hospital/clinic

• 3 passport photos of family member

 Fees:

• AED 310 Application fee + typing fees per family member

• AED 15 Empost label (Optional)

Procedure:

1. Ensure that you take your spouse/child over 15 for a health check-up and obtain a Medical Certificate.

2. Go to any authorised typing office & get application form typed and pay the fees.

3. Go to GDRFA and submit the application form, along with supporting documents to receive the residence visa stamp on your family member's passport.

Please Note: For your family member's residence visa to remain valid, he/she must not be out of the UAE for more than 6 months. In case a Muslim expatriate has married more than one wife, he can only obtain one residency visa.

One-day court in Dubai -start functioning from March 8th 2017

Vice President, Prime Minister and Ruler of Dubai, His Highness Sheikh Mohammed bin Rashid Al Maktoum approved on Tuesday Law No. (1) of 2017 on facilitating speedy rulings on minor cases outside the court.

A new "One Day Misdemeanour Court" will cut waiting time at Dubai courts by 60 per cent, ensure quick verdicts and save the government a whopping Dh40 million, officials said on Tuesday.

The new court initiative to be implemented by all police stations in Dubai comes under Penal Order Law No. 1 of 2017 approved by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, on Tuesday.

During a meeting held at the Dubai Executive Council’s head office at Emirates Towers on Tuesday, Shaikh Mohammad ordered implementing the ‘One Day Misdemeanour Court’ initiative in every police station starting from Wednesday.

It is expected to cut waiting time in Dubai Courts by 60 percent, quickening the issuance of verdicts and saving the government Dh40 million annually in expenses.

The initiative aims to curtail time required in investigation and prosecution by implementing a verdict in two phases in less than 24 hours.

Shaikh Mohammad stressed that the UAE is a state of institutions and law, possessing a distinguished judicial system that is based on up-to-date mechanisms and systems and is committed to the independence of all its judicial and security bodies.

He said that this ensures justice for individuals in a record time without impacting the integrity of the law.

“The UAE possesses 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.

“We have great trust in the judicial body to render highly efficient quick services while fully preserving the sovereignty of law. This assists us in achieving our goals to make procedures faster and easier to complete for people in cases pertaining to minor crimes,” said Shaikh Mohammad.

A pilot project of One Day Court was tried in 2015 involving the Residency and Foreigners’ Affairs, Al Muraqqabat police station, and the Traffic Department.

The main issue with the adjudication process is the time taken for investigations and court dates, according to Bin Haider, who said Shaikh Mohammad’s decision will save people a lot of time and reduce the waiting period for suspects detained pending court dates in such misdemeanour cases.

Dr Ali Galadari, Chief judge of the Dubai Appeal Court, also praised the decision and its timeliness.

“Dubai is a worldwide city and has been booming rapidly. Evidently, this decision will have a positive impact on the adjudication process. With the rapid increase in population and the increase in the number of criminal cases, Shaikh Mohammad’s decision will fast-track justice and ease the strain of the courts and judges. It will also simplify the judicial process for members of the public and speed it up,” said Dr Galadari who welcomed the new decision as a way to deliver swift justice.

“The litigation process in a fast-growing and multicultural city like Dubai has to be accurate for justice to be delivered. Such a decision will reflect on the development of the judicial process and its speed in parallel with the growth of the city,” Dr Galadari told Gulf News

Twenty-one types of cases would be looked into under this in 24 hours due to the existence of the prosecution and court on site.

The Penal Order law is expected to create a qualitative shift in the field of judicial work. Some cases will be directly handled by the Public Prosecution, without referring it to the court through a penal order and by imposing a fine in some of the minor cases.

 

Types of cases to be handled

By the General Directorate of Residency:

• Illegal entry into the country
• Returning after deportation
• Staying in the country illegal
• Working after a ban
• Absconding

 By the police station:

• Possession of alcoholic beverages
• Consuming alcoholic beverages
• Giving a cheque with malicious intent
• Signing on the back side of the cheque (without sufficient funds)
• Failure to pay due fees
• Begging
• Illegal vendors

 By the Traffic Prosecution:

• Involvement in an accident that injured someone
• Wrecking properties
• Drinking and driving
• Attempting to drive under the influence
• Possessing alcoholic beverages illegally
• Driving a car without a licence

Dubai Airports introduce new baggage rule from March 8, 2017

Dubai Airports will soon introduce a new baggage rule to help improve service, reduce the risk of mishandlings and enhance the performance of its check-in and baggage operation at Dubai International.

"Dubai International provides some of the most sophisticated baggage systems in the world," said Ali Angizeh, Vice President of Terminal Operations at Dubai International. "However, even the most technologically advanced systems can be disrupted by irregular shaped or oversized bags. Bags that are round or do not have a flat surface of any kind are by far the largest source of baggage jams. These jams can shut down sections of our system, delay baggage delivery to the aircraft and inconvenience our customers."

Accordingly, the new rule will see bags without flat surfaces rejected at check-in effective March 8, 2017. Dubai Airports has advised all airlines operating into DXB of the imminent change and has updated its website, mobile app and signage across the airport to help raise awareness.

"We are trying to get the message out there as much as possible," added Angizeh.

"Passengers, who show up at the airport with non-compliant baggage, will also be given the option to have it repacked in boxes for a fee."

Stretching 140 kilometres and covering a surface area of 75 football fields, DXB's baggage handling system is among the largest in the world. It has 15,000 trays and is powered by 21,000 motors. DXB handled approximately 9.3 million bags in January this year. A bag spends an average of 29 minutes in the baggage system at DXB.

UAE Federal Traffic Council seeks ban on Passenger Minibuses

UAE Federal Traffic Council is seeking a ban on passengers in minibuses by January 2018, a top official said on Wednesday.

Major General Mohammad Saif Al Zafein, Assistant Chief for Operations Affairs at Dubai Police, and Director of Federal Traffic Council said that the council issued a recommendation to stop renewing the registration of minibuses for passenger transportation and only allow them to transport goods.

“We want to ban minibuses from transporting passengers. We have sent a recommendation to Ministry of Interior to ban the minibuses and hopefully, the suggestion will be active law by January 2018,” General Al Zafein said.

He said minibuses will be registered only if they are used for other purposes, such as transporting goods.

He said that Lt Gen Shaikh Saif Bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Interior, had asked the council to cooperate with the Ministry of Health to conduct a study on the minibuses, especially the psychological side of the drivers. “Our suggestion to ban the minibuses from transporting passengers came as a result of the study which recommended to use it only for transporting goods,” Major General Al Zafein said.

Ten people were killed and 152 injured in 79 traffic accidents caused by minibuses last year. Dubai Police said the death toll reached 198 in 2016.

“The number of deaths on roads is increasing and minibuses are not a transportation vehicle. We see accidents due to over-speeding and packing such vehicles with people without safety measures taken into consideration.”

He continued: “Sometimes it’s the speed, the dangerous swerving or simply the driver being exhausted and half asleep at the wheel with people packed away in these killing machines on wheels. This cannot go on.”

“Minibuses, which are normally designed to carry 14 people are sometimes packed with 16 to 18 people, making it unsafe due to overcrowding and unstable when the driver is speeding. In many cases, the vehicles are overcrowded and unfit to transport people safely.”

He said that if there is a situation, there are no emergency exits, unlike regular buses, to facilitate escape.

In a major incident in July last year, a Toyota minibus carrying 20 people crashed into a stationary lorry on Emirates Road in Dubai, killing seven people and injuring 13.

Minibuses were banned from transporting schoolchildren in 2013.