VAT Q&A: Does our SME have to pay VAT on a business centre contract signed last year?

We are a small Abu Dhabi company and took on the services of a business centre as an office; this was based on an annual contract for 2016 followed by two six-month contracts with the most recent running from November 2017 to February 2018, then February to May 2018 as the payment is made every quarter. We have just received the last invoice (ie February to May 2018) and have noticed that VAT has been added. I clarified to the business centre that I should not be incurring any VAT as there was no mention of payment of taxes whatsoever in the signed contract in 2017. I was informed "that any invoice issued after January 2018 will be subject to 5 per cent VAT even if the contract was signed before that period". The business centre added, "you can check it with the VAT authority as well". Can you point me in the right direction on this? SI, Abu Dhabi

The basic rule in Article 80 of the Decree Law and Article 70 of the Executive Regulations is that if a contract was concluded prior to January 1 2018 for a supply wholly or partly made after that date, and the contract does not contain clauses related to tax amounts, it shall be treated as inclusive of tax. So based on this, if you are not VAT registered then the agreed contract price is treated as inclusive of VAT and you should not be asked to pay any more for the 2018 portion of the lease. If this is the case, take the matter to the attention of the Abu Dhabi Department of Economic Development.

If you are VAT-registered, the rules are different and the Executive Regulations set out the exceptions to Article 70 of the law. The landlord should have written to you before December 31 last year to confirm whether you were registered for VAT and can reclaim the VAT. If you confirmed that to him, then he can legitimately charge you VAT on the 2018 portion of the rent. My experience is that most companies did not send any request to their customers, but are charging VAT regardless. However as long as you can reclaim it, then I would pay the VAT rather than get into an unnecessary dispute with the landlord.

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As a small company, we issue all our invoices to our customers in a PDF format by email containing all the required information, such as TRN numbers, VAT amount etc. However, a few of customers are demanding original hardcopy invoices before they will process them although I can find no reference to this in the VAT instructions. To do this will incur considerable costs via a courier company or employing someone to deliver invoices. Is it necessary for us to issue original hardcopy invoices or can we continue to issue softcopy VAT invoices? AT Dubai

Article 59 section 8 of the Executive Regulations to the Decree Law contains information about issuing tax invoices, including what details need to be included and how they should be issued. It states that tax invoices may be issued by electronic means provided two conditions are met. These are, one, that you must be capable of securely storing a copy of the electronic invoice and, two, the authenticity and integrity of the electronic invoice should be guaranteed. As long as you are producing invoices from an accounting system with unique invoice numbers, and either run your accounting system in the cloud or have a reliable back up process in place, then they should be stored securely. What isn’t acceptable to the Federal Tax Authority is producing invoices on excel outside of an accounting system.

I’ve heard some customers insist on hard copy invoices so I checked with Bianca Gracias, a Lawyer from Suits & Advisors, who confirmed my understanding, which is there is no legislation in place which requires this. Sending your customer an invoice electronically, which they can obviously print if they prefer to use a paper copy internally, is not unreasonable. Going forward I would include a clause in your contracts / quotations which states that invoices will be provided electronically and any request for a hard copy invoice will incur an admin fee, of say, Dh100.

Lisa Martin, a chartered accountant with over 20 years commercial finance experience, is the founder of accounting, auditing and VAT consultancy, The Counting House. Email any VAT queries to pf@thenational.ae

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SANCTIONED

Kirill Shamalov, Russia's youngest billionaire and previously married to Putin's daughter Katarina
Petr Fradkov, head of recently sanctioned Promsvyazbank and son of former head of Russian Foreign Intelligence, the FSB.
Denis Bortnikov, Deputy President of Russia's largest bank VTB. He is the son of Alexander Bortnikov, head of the FSB which was responsible for the poisoning of political activist Alexey Navalny in August 2020 with banned chemical agent novichok.
Yury Slyusar, director of United Aircraft Corporation, a major aircraft manufacturer for the Russian military.
Elena Aleksandrovna Georgieva, chair of the board of Novikombank, a state-owned defence conglomerate.

In numbers: China in Dubai

The number of Chinese people living in Dubai: An estimated 200,000

Number of Chinese people in International City: Almost 50,000

Daily visitors to Dragon Mart in 2018/19: 120,000

Daily visitors to Dragon Mart in 2010: 20,000

Percentage increase in visitors in eight years: 500 per cent

10 tips for entry-level job seekers

Have an up-to-date, professional LinkedIn profile. If you don’t have a LinkedIn account, set one up today. Avoid poor-quality profile pictures with distracting backgrounds. Include a professional summary and begin to grow your network.
Keep track of the job trends in your sector through the news. Apply for job alerts at your dream organisations and the types of jobs you want – LinkedIn uses AI to share similar relevant jobs based on your selections.
Double check that you’ve highlighted relevant skills on your resume and LinkedIn profile.
For most entry-level jobs, your resume will first be filtered by an applicant tracking system for keywords. Look closely at the description of the job you are applying for and mirror the language as much as possible (while being honest and accurate about your skills and experience).
Keep your CV professional and in a simple format – make sure you tailor your cover letter and application to the company and role.
Go online and look for details on job specifications for your target position. Make a list of skills required and set yourself some learning goals to tick off all the necessary skills one by one.
Don’t be afraid to reach outside your immediate friends and family to other acquaintances and let them know you are looking for new opportunities.
Make sure you’ve set your LinkedIn profile to signal that you are “open to opportunities”. Also be sure to use LinkedIn to search for people who are still actively hiring by searching for those that have the headline “I’m hiring” or “We’re hiring” in their profile.
Prepare for online interviews using mock interview tools. Even before landing interviews, it can be useful to start practising.
Be professional and patient. Always be professional with whoever you are interacting with throughout your search process, this will be remembered. You need to be patient, dedicated and not give up on your search. Candidates need to make sure they are following up appropriately for roles they have applied.

Arda Atalay, head of Mena private sector at LinkedIn Talent Solutions, Rudy Bier, managing partner of Kinetic Business Solutions and Ben Kinerman Daltrey, co-founder of KinFitz

Benefits of first-time home buyers' scheme

Priority access to new homes from participating developers
Discounts on sales price of off-plan units
Flexible payment plans from developers
Mortgages with better interest rates, faster approval times and reduced fees
DLD registration fee can be paid through banks or credit cards at zero interest rates

The%20US%20Congress%20explained

%3Cp%3E-%20Congress%20is%20one%20of%20three%20branches%20of%20the%20US%20government%2C%20and%20the%20one%20that%20creates%20the%20nation's%20federal%20laws%3C%2Fp%3E%0A%3Cp%3E-%20Congress%20is%20divided%20into%20two%20chambers%3A%20The%20House%20of%20Representatives%20and%20the%20Senate%3C%2Fp%3E%0A%3Cp%3E-%C2%A0The%20House%20is%20made%20up%20of%20435%20members%20based%20on%20a%20state's%20population.%20House%20members%20are%20up%20for%20election%20every%20two%20years%3C%2Fp%3E%0A%3Cp%3E-%20A%20bill%20must%20be%20approved%20by%20both%20the%20House%20and%20Senate%20before%20it%20goes%20to%20the%20president's%20desk%20for%20signature%3C%2Fp%3E%0A%3Cp%3E-%20A%20political%20party%20needs%20218%20seats%20to%20be%20in%20control%20of%20the%20House%20of%20Representatives%3C%2Fp%3E%0A%3Cp%3E-%20The%20Senate%20is%20comprised%20of%20100%20members%2C%20with%20each%20state%20receiving%20two%20senators.%20Senate%20members%20serve%20six-year%20terms%3C%2Fp%3E%0A%3Cp%3E-%20A%20political%20party%20needs%2051%20seats%20to%20control%20the%20Senate.%20In%20the%20case%20of%20a%2050-50%20tie%2C%20the%20party%20of%20the%20president%20controls%20the%20Senate%3C%2Fp%3E%0A

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FROM%20THE%20ASHES

%3Cp%3EDirector%3A%20Khalid%20Fahad%3C%2Fp%3E%0A%3Cp%3EStarring%3A%20Shaima%20Al%20Tayeb%2C%20Wafa%20Muhamad%2C%20Hamss%20Bandar%3C%2Fp%3E%0A%3Cp%3ERating%3A%203%2F5%3C%2Fp%3E%0A

Electoral College Victory

Trump has so far secured 295 Electoral College votes, according to the Associated Press, exceeding the 270 needed to win. Only Nevada and Arizona remain to be called, and both swing states are leaning Republican. Trump swept all five remaining swing states, North Carolina, Georgia, Pennsylvania, Michigan and Wisconsin, sealing his path to victory and giving him a strong mandate.

Popular Vote Tally

The count is ongoing, but Trump currently leads with nearly 51 per cent of the popular vote to Harris’s 47.6 per cent. Trump has over 72.2 million votes, while Harris trails with approximately 67.4 million.