Petrol and Diesel price increased in UAE for April 2019

Petrol and Diesel price increased in UAE for April 2019

The UAE Ministry of Energy and Industry have announced the new fewel prices in the country for the month of April 2019. The price hike is nothing new as a gradual increase in the petrol and diesel prices sometimes is not felt hard and affects directly to the people’s budget and pocket but considering as a whole, it matters when we have to fulfil the other necessities of life also along with just the travel part.

It is on Thursday that the UAE got the fuel prices revised for the April month. The UAE fuel price for April 2019 has been announced by the Ministry of Energy and Industry.

The fuel price would be including the Value-added tax (VAT). The price hike would largely affect the Drivers for whom petrol is an everyday affair as the price is increasing significantly in the month of April.

The VAT would also be charged with the fuel and would be charged at 5 percent. So the matter is to make haste if one is planning to get the pump filled!

The charges for the different quality of petrol and diesel which have experienced hike are as follows

Petrol price in UAE per litre:

  • The drivers have to pay Dhs2.23 per litre for Super 98 which was Dhs2.04 in March
  • Special 95 would be costing Dhs2.11 per litre experiencing an increase of 19 fils from Dhs1.92 last month
  • The diesel would be priced at Dhs2.49 per litre for April which is an increase of 8 fils, which was Dh2.41 in March. Thus the revised price for diesel is Dh2.49 a litre.Thus we see that diesel would this month be more expensive from what it was in March.

Looking back, the UAE’s Ministry of Energy took the initial step to get the fuel price settled, based on the average global prices in August 2015.

Before this, the petrol price in UAE has been subsidised by the government, which prevented the consumers from the effect of the global fluctuations in the cost of petrol.

SUPER 98 PRICES SO FAR FOR 2019:

  • January: Dhs2
  • February: Dhs1.95
  • March: Dhs2.04
  • April: Dhs2.23

VAT Refunds For Business Visitors Scheme To Launch From April 2 in UAE

VAT Refunds For Business Visitors Scheme To Launch From April 2 in UAE

The FTA is all set to launch the “VAT refunds for business visitors scheme” from 2 April 2019.

Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, the UAE Minister of Finance and FTA Chairman, the tax authority chaired the meeting of FTA Board of Directors and said that the foreign businesses can apply to get the taxes imposed during the import and export activities of the people who do not live in the UAE but belongs to the countries which implement VAT refund schemes.

The FTA in a statement said, “The scheme aims to reciprocate the efforts made in countries that offer VAT refunds to visiting UAE businesses”.

Conditions to Avail VAT refund

There are four conditions to be eligible for the VAT refund. They are-

  • Foreign businesses should not have the place of establishment or fixed establishment in UAE or any VAT-applicable GCC states.
  • Such foreign businesses should not be taxable in the UAE.
  • The foreign businesses should be registered with a competent authority in a jurisdiction as an establishment in which they are established
  • The foreign businesses must belong from the country which implements VAT and that equally gives VAT refunds to UAE businesses in the same situation.

Sheikh Hamdan said that the “FTA has made plans to encourage the tax compliance and to increase the registration rate among taxable businesses, and combat tax evasion”.

Sheikh Hamdan also said “The authority is also stepping up its efforts to businesses – who we consider to be strategic partners – fully comply with tax regulations and procedures with little to no effect on their activities. With that in mind, we regularly organise awareness and consultative meetings to help private-sector entities across all industries efficiently implement the tax system”.

He also said that the FTA is currently working on a new campaign, especially ‘Your Tax Invoice: Your Rights’, which was launched to promote the use of Tax Invoices in all business activities during the first quarter of this year. Hamdan added “This initiative is in conjunction with the Tax Clinic, which was launched in August 2018, and seeks to establish direct communication with businesses, continuing throughout all seven emirates to raise awareness and to flag obstacles that can be resolved immediately”.

The FTA said “The level of tax compliance in the country has increased, with the number of registrants for VAT exceeding 300,000 registered businesses – tax groups and individuals. Meanwhile, the number of registrants for Excise Tax reached 719, and the number of approved Tax Agents increased to 316”.

The FTA said that the “VAT refund procedures for UAE nationals who are building new residences” is running successfully. By this method, many citizens are getting benefits as it is a simple and straightforward electronic process which allows them to claim the refund on the taxes levied on the construction of the houses. The FTA also said that 235 applications have been approved to allow the citizens to recover Dh9.76 million in total.

The board also gave a green signal to the plan of FTA to launch the second stage of the “Marking Tobacco and Tobacco Products Scheme” by which the tobacco products will be expanded which are imported or locally produced and traded, including shisha.

VAT Refunds For Business Visitors Scheme To Launch From April 2 in UAE

Close to 300,000 Business have Registered for VAT in the UAE: FTA Said

Close to 300,000 Business have Registered for VAT in the UAE

According to the Federal Tax Authority (FTA), close to 300,000 business have recently registered for VAT in the UAE region.

At one of the meetings headed by Sheikh Hamdan bin Rashid Al Maktoum, also serving as the Deputy Ruler of Dubai, it was announced that the number of registered tax agents operating in the UAE has increased to 316.

This has also highlighted the success of the recent VAT refund procedures made in UAE for the Emiratis building new homes. Approximately, 235 applications have been approved by the government enabling citizens to recover a total of AED 9.65 million.

Praising the positive results at the meeting, Sheikh Hamdan stated: “The Federal Tax Authority has developed comprehensive plans to encourage tax compliance, raise the registration rate among taxable businesses, and combat tax evasion.”

Meanwhile, FTA has also disclosed that the Tax Refunds for Tourists Scheme that was started last year in November has also recorded close to 6,000 refund transactions per day.

FTA has also announced that they have completed the early preparations and activities that are required for the launch of VAT Refunds under the Business Visitors scheme starting from April 2, 2019.

The preceding scheme would also allow foreign businesses to apply for a refund on taxes that are levied on the import/export activities to anyone, who is residing outside UAE, but is a part of country that mandate VAT refund schemes.

Conditions to Allow Foreign Businesses to Refund VAT in UAE

Conditions to Allow Foreign Businesses to Recover VAT in UAE

The foreign businesses had problems in recovering the VAT (Value Added Tax) in UAE(United Arab Emirates). So to solve this problem, the FTA (Federal Tax Authority) has given some conditions.

Conditions to be eligible for the VAT refund

The FTA gave four conditions that will help the foreign businesses to allow the recovery of VAT in UAE.

  1. The foreign businesses must not have a fixed establishment or a place of establishment in any of the VAT-implementing GCC (Gulf Cooperation Council) states or in the UAE.
  2. The foreign businesses must not pay tax in the UAE.
  3. The Foreign businesses with a capable authority must also be registered as an establishment in the jurisdiction in which the businesses are established.
  4. The Foreign businesses must be from the country which implements VAT and also gives VAT refunds to UAE businesses in the same situations.

Time period for claiming refund

The Authority said that the time period for claiming refund must be a calendar year.

  • To claim the refund of 2018, the refund applications can be made before April 2019.
  • For the succeeding year, the opening date for accepting the application is March 1, 2020.

Read Also: VAT Refund Scheme for Businesses in UAE

Minimum claim amount of each VAT refund application

The minimum claim amount of each VAT refund application submitted by the foreign visitors is Dh2,000 which might be single or multiple purchases said FTA. The Authority told that the applicants will need the tax invoices to submit it with the refund applications due to which on the purchases for which the applicants wants to reclaim the VAT, they have to hold on to the original tax invoices.

Situations where VAT cannot be reclaimed:

To reclaim the VAT in UAE under this plan, the state might submit the VAT refund application guaranteed FTA, stating the three condition in which the VAT cannot be reclaimed.

  1. In case the receiver of supplies being done by the foreign business, liable under reverse charge mechanism for the VAT.
  2. If the ITC of any goods or services is “blocked” from the recovery, then the VAT cannot be processed further due to which no recoverable can be done by a taxable person in the UAE.
  3. If the foreign business is a non-resident tour operator, then they cannot reclaim the refund.

Khalid Ali Al Bustani, director-general, FTA said “This procedure reflects positively on many sectors, including tourism, trade, exhibitions, conferences, etc. The reciprocity is a key condition for the procedure, whereby the Authority will refund the VAT to businesses resident in countries that refund VAT for UAE businesses visiting their territories”.

Cosmetic Services Prone to 5% VAT in UAE

Cosmetic Services Prone to 5 percent VAT in UAE

The tax experts said that the healthcare services like the cosmetic will now subject to a 5 percent VAT rate.

Most of the healthcare services are classified as zero-rated under the UAE VAT law which means that such services are subject to zero percent VAT. But it allows the VAT recovery on associated costs.

While addressing a seminar on VAT, Nimish Goel, partner at WTS Dhruva Consultants, said “The government has a keen interest and focus on promoting the healthcare industry in the UAE. Keeping this intent in mind, the government has kept basic and preventive healthcare supply at a zero rate of VAT. But there are a lot of activities that are still subject to VAT”.

As per the research reports, the healthcare expenditure is calculated to reach more than $100 billion in the GCC in which the UAE will play a very important role. It is calculated that by 2020, the UAE healthcare will reach Dh 71.56 billion.

Dr Ramadan AlBlooshi, CEO, Dubai Healthcare City Authority – Regulatory (DHCR), said that the VAT was introduced at the beginning of 2018 and after its introduction, the authority got to know about its implementation.

He said “We are keen to provide a platform to help stakeholders have a better understanding of VAT to facilitate compliance in the free zone“.

For the companies which are operating in the healthcare sectors, WTS Dhruva Consultants launched a comprehensive VAT guide at the seminar. The title of the guide is “VAT on Health Care in UAE – Impact and Insights” which gave the information about the issues related to healthcare insurance companies, service providers, and related products.

It is for the first time that someone has prepared a VAT guide for the healthcare sector in the UAE said Dinesh Kanabar, CEO and founder of WTS Dhruva addressing the VAT guide prepared by WTS Dhruva.

He said, “The guide addresses numerous issues related to the activities of healthcare service providers”.

Impact of VAT in UAE [1 Year and Counting]

vat in uae in one year

UAE recently celebrated its first VAT anniversary. The country, known for its rich oil reserves and a booming global tourist hub, had introduced VAT to open up a new source of non-oil revenue for offering efficient and much improved public services, including medical facilities, good roads, transportation facilities, public schools, parks, waste control, and more.

The VAT in UAE was introduced on Jan 1, 2018. More than a year later, tax experts acknowledge the role of FDA (Federal Tax Authority) and UAE public for the successful implementation. Reportedly, the 5 percent VAT was the first of any form of TAX introduced in the Emirates.

The Role of FTA in VAT UAE Success

FTA was at the realm of all VAT related decisions in UAE. Their principle role includes key functions like :

  • Clearing all impending ambiguities (if any).
  • Issuing timely circulars and guides on VAT related provisions.
  • Ensuring compliance from UAE traders, business owners and the public at large.

The UAE VAT rates are one of the lowest in the world right now. VAT UAE provisions mandate VAT registration for all natural and legal UAE person with taxable business supplies exceeding Dh375,000 ($100,000) during the previous 12 months.

In case the total taxable supplies have not exceeded Dh375,000 ($100,000) but expected to cross the threshold within 30 days of the succeeding year, VAT registration must be done.

While registration is key for a robust VAT, filing VAT returns are also equally important. VAT UAE norms mandate large businesses to file monthly returns. Other business can file quarterly returns based on revenues.

FTA must be applauded for ensuring maximum registration and easing compliance burden with timely guides. This ease of process coupled with companies embracing VAT readily by restructuring business processes and systems have made the transition period smooth and frictionless. FA is yet to release tax revenue figures but the recent increment in federal budget spending surely hint towards better days ahead.

The role of FTA is particularly more prominent considering the fact that VAT UAE was in itself the first among any form of tax introduced in the emirates. However, UAE and FTA exempt precious metals such as gold, silver, and platinum as well as sectors such as healthcare, education, and transport from the VAT ambit.

The Tourist VAT Refund Scheme

The VAT Tourist Refund Scheme has now been completely put into place. The first phase was launched on November 18. The second and final phase was introduced on December 16. The achene now facilitates international tourists in UAE to make timely VAT refund claims against purchases made by them on the UAE soil.

Tourists visiting UAE can make claims while leaving the country from any of the following international airports – Dubai, Abu Dhabi, Sharjah, Al Ain International Airport, Al Maktoum International Airport and Ras Al Khaimah International Airport.

In addition to this, tourists can also claim refunds via two ­sea ports – Zayed Port in Abu Dhabi and Port Rashid in Dubai; and four land ports – Al Ghuwaifat Border Post in Abu Dhabi, Hili Border Port and Al Madeef Border Crossing in Al Ain and Dubai’s Hatta Border Exit. Refunds are transferred within 90 days of the claim.

The Projections

The first UAE VAT accrues are projected to touch the Dh12 billion mark in 2018. For 2019, the prediction is a whopping Dh20 billion. Amidst years of the dependence of fledgling crude prices as the primary revenue source, the VAT UAE not only opens new diverse revenue sources but also shows the way ahead for other GSS states and oil producing nations.

The Audits

As the new year slowly sets in, businesses in UAE are gearing up for VAT Audits. The FTA Audits will ensure that businesses stick to fair book-keeping. FTA Audits will be carried out over a period of five working days starting with the day following the particular emails release date.

The Audit periods will include two phases for January 1, 2018-to-April 30, 2018 and May 1, 2018-to-July 31, 2018 tax periods. Businesses must ensure that their expense claims are backed by legitimate and appropriate documents. Last but not least, businesses must also ensure robust book-keeping with timely payment of due tax.