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.

Non-Muslim expats in Dubai allows writing wills

Non-Muslim expatriates in Dubai were given renewed legal protection to execute legal wills that dispose of assets and properties according to their last wishes.

A new law issued on Tuesday prescribes a “clear legal framework” that regulates inheritance, wills and probate for non-Muslim expats in Dubai who are living for long periods in the emirate and accumulating larger, long-term assets, including investment portfolios and property.

The new law affirms that non-Muslim expats living and working in Dubai can register a will in English under internationally recognised Common Law.

The move follows the creation of a non-Muslim will registry in Abu Dhabi announced in May of this year.

For Muslims, the courts automatically apply Sharia and distribute assets to predetermined beneficiaries.Law No. 15 was issued on Tuesday by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai.

“The law, which is applicable to the wills and assets of non-Muslims based in Dubai, including the Dubai International Financial Centre (DIFC), creates a clear legal framework for non-Muslims to create wills according to their wishes,” an official statement said.

“It also outlines clear legal procedures that will encourage residents to register their wills and manage their assets in Dubai, thereby creating increased confidence in Dubai’s investment landscape.”

The new law applies in both Dubai Courts and Dubai International Financial Centre (DIFC) Courts where senior officials have the legal authority to develop the regulations, policies and procedures for the registry.

The law also spells out “the liabilities and obligations of the beneficiaries of wills, the responsibilities and limitations of will executors, the regulations governing inheritance and the distribution and management of the estate as well as appeal procedures. Disputes arising from wills and probate for non-Muslims will be adjudicated by Dubai Courts or DIFC Courts, depending on the place where the wills are registered”, the government said.

“Any non-Muslim wills registered at Dubai Courts or DIFC Courts prior to the law will remain valid. The law annuls any other legislation that challenges or contradicts its articles and is valid from the date of publication and will be published in the Official Gazette.”

The right of survivorship, where assets are passed on to the surviving joint owner upon the death of the other, does not apply in the UAE.

The DIFC Wills and Probate Registry (DIFC WPR) for Non-Muslims, which covers assets in Dubai and Ras Al Khaimah, had 2,900 registered wills since opening in May 2015, Gulf News reported last September, with an average of 150 wills being registered each month.

In an interview with Gulf News at the time, Sean Hird, director of the DIFC WPR, said options were available should expats prefer to specifically name those to whom their assets in the UAE should go to when they die.

“We are a government service providing choice. It’s all about giving people freedom of choice — either to follow Sharia or have a will. If you are a non-Muslim, you have a choice to do a DIFC will and opt into this system which will provide you with certainty,” Hird told Gulf News in a prior interview.