5% VAT in UAE from Jan 2018

[2S3]

Just announced:
Dubai: The UAE is to implement 5% VAT from January 1, 2018, but 150 food items, health and education will be exempted, according to Obaid Humaid Al Tayer, Minister of State for Financial Affairs.

And so it continues, the ramping up of the cost of living in the UAE. Yet another reason to leave ........ :ugh:

[BobDole]

It looks like this is only the beginning.... Income taxes will follow at some point.

http://www.emirates247.com/news/impose-vat-corporate-tax-income-tax-imf-tells-uae-and-rest-of-gcc-2016-02-22-1.621884

[ExDubai]

... Income taxes will follow at some point.
For sure, but only for expats.

[glofish]

Well, dear German Aussie (autsch!)

Simply looking at my roster, there must be a serious shortage of pilots. But you seem to blow the same dumb horn as EK management: Nothing to do with attrition ....:ugh:

By the way, of my friends with similar seniority there are 10 (!) buddies leaving between Jan and May .... and they are leaving to a place close to yours.

If you don't know what you're talking about, better get informed before blowing.

[buggerall]

Once the system for VAT is in place will be very easy to raise it....

[Rotating Bacon]

seriously who has plans to be here 2018 :p

[my salami]

I strongly suggest you start digging a hole in your backyard 'cause this lady is after your hard earned cash...:mad:
Have a look at what she says.

Lagarde said that one of the ingredients for successful 21st-century economies is international taxation. “This is an essential means by which governments mobilise their revenues in a globalised economy,” she said.

“We need a tax system in which ordinary citizens are convinced that multinational companies and wealthy individuals are contributing a fair share to the public purse, to the common good,” the IMF head noted.

[donpizmeov]

No the first time a date for the introduction of the VAT has been announced. Here is a clip from 2008. Google shows articles from 2002.

Dubai wants VAT rate set at 3%
Dubai Customs has recommended a rate of three per cent for the value added tax (VAT) the UAE would introduce next year as part of a Gulf initiative.
Published: 23:32 June 2, 2008
By Shakir Husain, Staff Reporter
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Dubai: Dubai Customs has recommended a rate of three per cent for the value added tax (VAT) the UAE would introduce next year as part of a Gulf initiative.

A final decision on the rate and timing of VAT's implementation will be taken by the federal government.

This will mark the country's exit from a perceived 'tax-free' haven to a tax regime.

Although the country is yet to formally launch direct tax, its residents have been paying indirect taxes in the form of fees, surcharges, and road tolls, etc.

Dubai Customs director-general Ahmad Butti Ahmad said the UAE is likely to be the first country of the Gulf Cooperation Council to introduce the tax on goods and services.

"VAT makes sense for Gulf states diversifying into sectors like tourism, hospitality and financial services," Ahmad said at a media briefing on Sunday night, and described it as "the best tax system" for boosting the UAE economy.

Do you think that VAT will increase overall expenditure for business despite the low rates? How? Tell us at [email protected] or fill in the form bellow to send your comments.

[aussiefarmer]

Lying to yourself pretending that it might not happen I guess is a way to tackle the bad news.

I rather go with preparing for it... Since it is now official and happening in less than 2 years.

If working conditions were already deteriorated to the worst in Emirates' 25+ years history, this news actually represent the end of one of the few benefits of working as an expat pilot in the UAE - tax free environment.

For those who aren't familiar with the UAE, prices in Dubai are already nowadays between 20% to 50% higher than those in western europe or US. I'm talking about food, clothes and basically everything you find in a mall. And this is now, before VAT becomes a reality!!!

With salaries lagging behind inflation for a decade, and working conditions deteriorating (including upgrade time now for new joiners around 10 years).. What reasons are left to choose to come to work here?

Just a word of advice, do your homework before you accept a job offer. Just my 2c.

[Luibar]

With the implementation of income tax there will be no reason for expats remain expats unless there's a total lack of jobs back home or near it. To retain employees one way to do it is the company paying the tax as the chinese and KAL do. Who knows.

[Praise Jebus]

Imported a large and expensive item recently and was charged 5% import tax on the item, it's shipping cost and it's insurance....

[donpizmeov]

PJ,

Bout bloody time. Now don't break it until I get to have a go.

[Praise Jebus]

Ya dream'n....

[johnmark1221]

In The UAE, will be implemented VAT at the rate of 5% from 1 January 2018 (https://www.vatuae.me/). Some sectors such as food, health, education and social services would be exempted from the VAT.

[Cantbebothered]

Items exempt from VAT are
*Staple foods (rice,milk,bread etc about 150 items)
*Bicycles (yes you read correctly)
*Education and Healthcare.

and like all things in Dubai I am guessing it will go up every year. :mad:

[Antman]

Lagarde said that one of the ingredients for successful 21st-century economies is international taxation. “This is an essential means by which governments mobilise their revenues in a globalised economy,” she said.

“We need a tax system in which ordinary citizens are convinced that multinational companies and wealthy individuals are contributing a fair share to the public purse, to the common good,” the IMF head noted.

Got to love these people-no shame

https://www.forbes.com/sites/robertwood/2012/05/30/imfs-christine-lagarde-i-dont-pay-taxes-but-you-should/#77cbd88977cb

[Aluminium shuffler]

It's interesting that the EMF, which has been so well discredited of late (especially Lagarde) and has utterly failed to rectify the crumbling economics of both the EU and the Euro, is telling another group of nations how to run its finances. It's just a lever to try to get money out of expats to plug some holes in Europe or to stop more professional Europeans coming to the ME as the Euro continues to collapse - pure self interest. Hopefully they'll give her all the consideration she is due and spend more time thinking about what to choose for lunch.

[SOPS]

And she gets paid how much........

[Officer Kite]

And she gets paid how much........

"her IMF salary of $467,940 plus an $83,760 additional allowance is not subject to any taxes" ... from the article

[DCS99]

"Why is the UAE implementing VAT?

The UAE government offers many public services to the residents such as hospitals, roads, public schools, parks, waste control, and police services, which are paid by government funds. VAT will provide an additional source of generating revenues for the government to provide high quality public services into the future."

There you go. These public schools and hospitals are good aren't they?

[Aluminium shuffler]

That is rather my point, DCS - without the large state burdens of universal "free at point of service" education and healthcare, housing, nursing homes or pensions for the 90% expat community, the state doesn't need the same levels of revenue as the EU. European style national economics don't apply here, so why is she meddling unless she's trying to put a spanner in the works to benefit the EU?

[outboundjetsetter]

the government doesn't want you here after age 60.... its simply run up a big deficit since banking on oil revenues based on an avg of 100 dollars per barrel... the good old days where based upto 160 per barrel but now the price is way under 50.. the big problem is the bond prices..and us based etf's basically the government will soon be broke as they have one main resource to produce a plastic city (oil) and are not upto critical mass, so in the mean time you will pay for it via...salik vat parking fees/fines/ dreamt up reasons including cutting an a4 page in half for a birth cerfifircate.. making you ( expats only) renew your drivers and pilots licenses more often.( and eida etc etc etc ..... etc writing is on the wall hope all potential expats read between the lines 'CAREFULLY' gross salary may look great but by the time u envision remittence tax etc etc.. you are basically stuffed!

[Yorkshire_Pudding]

What’s everyone’s experience of VAT implementation so far? 5 dhs on a bag of groceries, 10 dhs extra to fill up on fuel. Hardly noticeable perhaps. But for a large part, many prices have increased 20-25% and not just the 1 dhs items rounded up to 1.25. 🙄

[felixthecat]

Home delivery curry from CurryBox up 11% for exactly the same order since 24 Dec when last ordered. Prices seem to have generally gone up more than the 5% somehow or other

[pilotguy1222]

That is interesting, as the price of bacon is up exactly 11% at Spinneys.

[Odins Raven]

That is interesting, as the price of bacon is up exactly 11% at Spinneys.

That will be correct though. 5% tax plus 5% admin fee for administering said tax plus 20% tax on the admin tax as a reflection of the cost of administering the tax - ergo 11% Tax doesn’t grow on trees you know.

Your conspiracy theories are simply insulting to the Ministry of Taxable Tax Taxing.

[Craggenmore]

But the price of Bacon at Sainsbury is still the same 👍🏼😎

[Odins Raven]

But the price of Bacon at Sainsbury is still the same 👍🏼😎

They haven’t got enough expensive Nitrates added in their bacon though, which means you aren’t contributing to supporting the local oncology units at hospital. Have some morals man!

[pilot4life98]

I understand that it is not a pleasure to hear that from 0% VAT there is going to be a 5%. Not saying it's something nice to hear (especially if you work there), but Dubai has realized that their expenses are getting higher and higher and they don't want to waste more of their money. To me a 5% VAT is reasonable, especially nowadays that taxes (in Europe) are between 15-25%.
But yes, they are just getting started. The UAE is inflated af and salaries are not as high as they should be.

[White Knight]

but Dubai has realized that their expenses are getting higher and higher and they don't want to waste more of their money. To me a 5% VAT is reasonable, especially nowadays that taxes (in Europe) are between 15-25%.

Not our fault Dubai inc. has spent so much so 5%, when you come here for a 'tax free' life, IS unreasonable!

What happens in Euroland has nothing to do with what happens here!

We need an immediate and significant pay rise if the company hopes to stem the flow and attract new people!

[Gulf News]

The difference is that in Europe one would get some benefit from the tax generated. The UAE Government has stated that at least 70% ofthe revenue raised by VAT will be used for social projects to benefit the countries citizens In a nutshell money extracted from 100% of the population will be used to improve the lives of less than 5%. The remaining 30% will be used by the Federal Government. Probably to continue the war in Yemen which they planned to have done and dusted in 6 weeks. The average expat employee in UAE will get nothing back from VAT.