Some Important rules in VAT

  1. Transitional Rules:

Will there be transitional rules?

Special rules will be provided to deal with various situations that may arise in respect of supplies that span the introduction of VAT. For example:

  • Where a payment is received in respect of a supply of goods before the introduction of VAT but the goods are actually delivered after the introduction of VAT, this means that VAT will have to be charged on such supplies. Likewise, special rules will apply with regards to supplies of services spanning the introduction of VAT.

 

  • Where a contract is concluded prior to the introduction of VAT in respect of a supply which is wholly or partly made after the introduction of VAT, and the contract does not contain clauses relating to the VAT treatment of the supply, then consideration for the supply will be treated as inclusive of VAT. There will, however, be special provisions to allow suppliers to charge VAT in situations where their recipient is able to recover their VAT but where there is no VAT clause.

 

There will be a number of such situations that will be have new set of uncertainties and the department will keep us guided by introducing the rules for it.

 

 

  1. Islamic Finances:

 How will Islamic finance be treated?

  • Islamic finance products are consistent with the principles of sharia and therefore often operate differently from financial products that are common internationally.
  • To ensure that there are no inconsistencies between the VAT treatment of standard financial services and Islamic finance products, the treatment of Islamic finance products will be aligned with the treatment of similar standard financial services.

 

  1. VAT for Emiratis residence:

Can UAE nationals claim VAT?

  • A scheme will be introduced to allow a UAE national who is not registered for VAT to reclaim VAT paid on goods and services relating to constructing a new residence which will be privately used by the person and his family. This will allow the recovery of VAT on such expenses as contractor’s services and building materials.

 

 

  • BMS can help you to easily migrate and assesss whether the transitional rules will be applicable to you?

What will be the Impact on your good and supplies with the present condition in VAT.?

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