70% of VAT revenues will go to local governments
OUR GOAL IS TO GIVE BIGGER PUSH TO DEVELOPMENT PROJECTS, MOHAMMAD SAYS
T he government will make sure to be transparent and firm when it comes to controlling the markets to stop price hikes in the wake of VAT implementation.
The statement was issued by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, while chairing the Cabinet meeting in Abu Dhabi yesterday.
Shaikh Mohammad said that local governments would get 70 per cent of the revenues of the value added tax (VAT), implemented as of January 1. The remaining 30 per cent of the revenues will go to the federal budget. “Distribution of the VAT revenues aims to achieve better local services, greater community development and broader support for our citizens,” said Shaikh Mohammad.
The Cabinet also stressed that VAT is a part of the UAE government’s continued efforts to implement the best global policies and practices that serve the national economy, and without impacting the welfare or happiness of Emiratis. The VAT revenues will be used to support development projects that serve and meet the needs of the community, in addition to bolstering the economy and enhancing the country’s competitiveness.
“Our goal is to create a bigger push for development projects and services provided to Emiratis. The government will be transparent on the nature of these projects and firm when it comes to controlling the markets to stop price hikes. The government will continue to consult with Emiratis in all matters that serve their interests and ensure a decent life for them,” Shaikh Mohammad added.
The Cabinet also approved appointing the board of directors for the Federal Authority for Nuclear Regulation (FANR).
“The UAE is preparing to become the first Arab country to achieve the Arab dream of generating energy through nuclear reactors, and this will be accomplished with the operation of the first nuclear reactor in 2018,” said Shaikh Mohammad.
L ocal governments will get 70 per cent of the revenues of the value added tax (VAT), implemented as of January 1, said His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai yesterday. The remaining 30 per cent of the revenues will go to the federal budget.
“Distribution of the VAT revenues aims to achieve better local services, greater community development and broader support for our citizens,” said Shaikh Mohammad while chairing a Cabinet meeting held at the Presidential Palace.
Lieutenant General Shaikh Saif Bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Interior, and Shaikh Mansour Bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Presidential Affairs, were present.
“Our goal is to create a bigger push for development projects and services provided to Emiratis. The government will be transparent on the nature of these projects and firm when it comes to controlling the markets to stop price hikes. The government will continue to consult with Emiratis in all matters that serve their interests and ensure a decent life for them,” Shaikh Mohammad added.
Board approved
Shaikh Mohammad affirmed that “the achievements of the UAE today are the fruits of the vision of our father and the leader, the founder of the UAE”. He added that “President His Highness Shaikh Khalifa Bin Zayed Al Nahyan’s directives to dedicate this year to our founding father is an opportunity for us to translate the values that have been instilled in us into further achievements that serve our people and our country.”
The Cabinet approved appointing the board of directors for the Federal Authority for Nuclear Regulation (FANR).
“The UAE is preparing to become the first Arab country to achieve the Arab dream of generating energy through nuclear reactors, and this will be accomplished with the operation of the first nuclear reactor in 2018,” said Shaikh Mohammad.
The Cabinet also adopted the “Manual on Measuring Productivity in the Federal Government”, which explains the mechanism of performance and productivity in the federal government. It includes directives for all ministries and government entities to understand and measure the productivity of the governmental sector.
In organisational affairs, the Cabinet approved the restructuring of the Judicial Coordination Council to achieve coordination among all judicial entities in the UAE, and to ensure the exchange of knowledge in the areas of judicial and legal affairs. The Cabinet also approved the estimated budget of the General Authority for Pensions and Social Insurance for the fiscal year 2018.
Concerning international relations, the Cabinet agreed to upgrade the diplomatic representation office of the UAE in Bonn, Germany, to a General Consulate.
It also adopted and ratified a number of international conventions, including ratification of the Convention on Cultural Cooperation with Ukraine, an agreement with Switzerland on the exemption of a shortstay visa for holders of ordinary passports, and an agreement on reciprocal protection of investments with the Government of Moldova, as well as two conventions on the avoidance of double taxation and the prevention of fiscal evasion with regard to income taxes with both Moldova and Croatia.
EDITORIAL COMMENT — THE VIEW SEE ALSO B1 & B2
The Federal Tax Authority (FTA) yesterday urged business sectors to complete all their registration requirements for Value Added Tax (VAT) purposes.
While the FTA commended the commitment of UAE business marked by high turnout for registration, it said the registration process is continuing and those business that did not register to date should register immediately to avoid fines and legal proceedings.
The FTA has urged natural and legal persons (individuals and companies) doing business in the UAE with taxable supplies and imports of goods and services that exceeded Dh375,000 over the previous 12 months or coming 30 days to register for VAT. Taxable supplies are identified as all supplies of goods and services made that are not exempt, as well as imports of goods and services. The Authority reminded business the importance of completing all registration requirements and obtaining a tax registration number (TRN) as well as to carefully review it and ensure its flawlessness before submitting, as faulty data could lead to rejection of the application.
Businesses need to validate their entitlement to request for an exception from VAT registration, which means that all their supplies must be zero rated. If not, the application will be sent back for amendments, which might delay the process of receiving a TRN. Registration is available 24/7 through the FTA website. Babu Das Augustine, Banking Editor at Gulf News, answers VAT questions and how it will affect your daily life.
Will every company in JAFZA get benefits of a designated Free Zone?
No separate application. Designated Zones would be specified by the Cabinet decision.
We are a logistics company exporting goods outside the UAE other than GCC. Is VAT applicable on freight invoice to UAE customers for exporting goods.
It would be zero rated.
Can exporters claim input VAT for expenses such as transportation, fuel charges and others incurred for such exports?
Yes
Can companies claim back VAT paid for petrol bills of company-owned vehicles?
Yes for commercial vehicles. No for vehicles available for personal use.