UAE VAT - Current Scenario and the Way Ahead

Sanjay Chhabria, Director, Indirect Tax – Nexdigm, draws attention to the apprehensiveness within the industry due to any uncertain penalties being imposed. He adds that there are approximately 20 obvious penalties and a lot more that are hidden and subject to interpretation. He continues by addressing the key violations that are liable for penalties.

Next, Sanjay reminds the viewers of Cabinet Decision 105, which was introduced by the Federal Tax Authorities (FTA) in 2021, and goes on to give an overview of the Waiver and Installment Scheme. He further provides more clarity on the schemes by talking about the conditions for which the waiver, as well as the installment schemes are applicable.

After giving a detailed explanation of what kinds of conditions are applicable for a waiver or installment scheme, Sanjay provides information on the different details and documents required for requesting to avail the above-mentioned schemes. Along with the documents required, Sanjay also enlightens the viewers on how the procedure for the Installment Scheme unfolds, beginning from the request submission stage, as well as what happens in the case of a refund of an earlier penalty that was collected.

Ankit Nagda, Manager, Indirect Tax – Nexdigm, talks about the credit reportability on employee benefit expenses and explains the importance of addressing such a topic. He discusses the three cases in which the expenses can be recovered, the employee benefit, and miscellaneous expenses. Furthermore, since the pandemic has caused most employees to work remotely, expenses such as mobile phone, airtime, and data usage become important to address, which is exactly what Ankit continues to do. He explains the different conditions which make it possible to recover these expenses.

Moving on, Ankit talks about the other changes that have been introduced in the UAE VAT, such as - goods supplied in the designated zones, and focal points of contact being assigned to companies, along with the advantages of such a move. Sanjay throws some light on actions the FTA expects and shares Nexdigm’s perspective regarding the same. He shares the preventive measures that must be taken by the taxpayers.

Before concluding the webinar, the panelists were asked to talk about employee expenditure for accommodation in a new location. Here, Ankit mentioned that when an employee moves to a new location, any expense incurred by the employer towards temporary accommodation is liable to be recovered.