Dubai consumers confident of economy improving this year 63% of consumers rated current job prospects as excellent/good

Dubai: Consumers in Dubai see improved job prospects and personal finances ahead, according to the quarterly business survey of Dubai Economy. The survey conducted during the last quarter of 2019 (Q4 2019) shows 75 per cent of consumers as confident of the employment situation improving during the next 12 months. Even when the Consumer Confidence Index showed a slight four-point decrease to 133 points from the previous quarter, 77 per cent of respondents were positive about their current personal finances and the percentage of those optimistic rose to 79 per cent when asked about the next 12 months.

Although job security is a major concern, 63 per cent of consumers rated current job prospects as excellent/good, while nearly half said they plan to cut down on outdoor entertainment and delay technology updates such as personal computers, mobile phones, etc. Job security remained the next biggest concern after the economy. Consumer perceptions are based on three aspects: job prospects, personal finances, and chances of buying things they need/want to buy.

The Q4 2019 survey showed 77 per cent of UAE nationals as optimistic about finding a job currently, with 22 per cent describing it as excellent, and 55 per cent as good. Among expats, 57 per cent expressed optimism about current job prospects, while 84 per cent nationals and 71 per cent among expats were positive on the chances of finding a job during the next 12 months.

Regarding current personal finances, 76 per cent of consumers expressed optimism. Among UAE nationals, 81 per cent of those surveyed showed optimism and that group comprised 22 per cent who rated their personal finances as excellent and 59 per cent who said they are good. As for expats, 12 per cent expressed optimism, with 63 per cent saying it looked good. Optimism seems likely to persist over the next 12 months for 79 per cent and reach 83 per cent among nationals and 76 per cent among expats.

When asked about buying the things they need and want to buy, 60 per cent expressed their satisfaction with the cost of things, whereas 79 per cent of nationals said they were excellent or good. The percentage decreased to 76 per cent among expats.

Perceptions on the economic situation in Dubai were highly positive among nationals at 77 per cent. More than half of the expatriates (56 per cent) also expressed optimism about the current economic situation while the overall percentage reached 63 per cent. The positive perception was largely due to the trade momentum and recovery of tourism, while the lack of employment opportunities and the lack of salary increases were among the main reasons for the negative perception.

Generally, there is optimism on the economy in Dubai as 74 per cent of UAE nationals and expatriates rated it to be excellent or good. The percentage of those who believe Dubai’s economy is in recession remained the same (25 per cent) as the previous quarter, while the percentage of consumers who expect the economy to recover during the next 12 months decreased from 55 per cent to 41 per cent.

Job security was the biggest concern during this quarter, with the percentage reaching 42 per cent among expats and 15 per cent among nationals. The economy ranked second on the list of major concerns for 16 per cent of expats and 9 per cent of nationals.

Most consumers (86 per cent) confirmed that they are able to meet basic life expenses and almost a third said they spend whatever money left on vacations or save them. Nearly half of consumers said they plan to reduce outdoor entertainment or delay technology upgrades such as personal computers or mobile phones, etc as part of balancing the family budget.

The Consumer Confidence Index captures a consumer’s individual perceptions on the economy as well as intentions and expectations for the future while also tracking consumer confidence over a specific period of time.

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FTA makes it easier for Emiratis to recover VAT on homes. Number of original documents to be submitted with application reduced to four

Abu Dhabi: The Federal Tax Authority, FTA, announced on Tuesday that it has launched a new platform on its website to streamline the process of recovering Value Added Tax, VAT, incurred by UAE citizens on the building of new homes.

Citizens who qualify for VAT recovery on newly-built homes will receive an email with a request to submit the necessary documents to complete the processing. After verification of the documents, the citizen is notified of his/her entitlement. If the refund amount matches the tax invoices provided, then — following final approval the refund amount is transferred to the applicant’s bank account.

In a press statement issued today, the Authority explained that the platform’s most notable new feature is that it allows applicants to apply for the VAT refund online by using the e-Services feature on the FTA website, instead of having to mail applications, as was the previous procedure. It noted that this would save time and expedite the VAT recovery process.

Furthermore, the number of original documents that need to be submitted with the application has been reduced to just four and include a copy of the applicant’s family book, a copy of the applicant’s Emirates ID, a building permit included in the certificate of completion issued by the municipality, and a document indicating the date from which the building has been occupied.

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VAT is universal for ecommerce transactions Scope for exceptions and tax evasion are limited

In UAE e-commerce (electronic sales and purchases) is subject to the standard 5 per cent value added tax (VAT).

As a transitional provision, all goods coming from GCC member countries are subject to VAT until the implementing state provisions becomes operational.

Physical goods and electronic services such as software, e-games, e-subscriptions, mobile phone applications and e-content are subject to specific rules that regulate how VAT applies to them.

(a) Sales & purchase of goods or services through e-commerce within UAE is considered as domestic sales and are subject to standard 5 per cent VAT rate.

(b) Purchase of goods or services from outside UAE, is subject to standard 5 per cent VAT rate.

(i) If recipient of goods or services is in UAE and registered for VAT (as a taxable person), then in this case recipient of goods or services is expected to calculate the standard 5 per cent VAT using reverse charge mechanism, whereby the taxable recipient calculates the due VAT instead of the non-resident supplier.

(ii) If the recipient is the end consumer (i.e. not registered with tax authority for VAT), then standard 5 per cent VAT is charged and paid to the authority by the agent or logistic company. Agent (who supplies/imports) will be responsible for compliance of UAE VAT for all imports on behalf of not registered individual.

Alternatively, the non-resident supplier must register in UAE for VAT purposes, regardless of supply volume.

Compliance on import of goods is aligned and governed through customs automated process and difficult to by-pass the process.

Software, e-games etc

When it comes to services such as software, e-games, e-subscriptions, mobile phone applications and e-content, there are implementation challenges across the world and tax authorities are gauging the trend & increasing surveillance on tax offenders. These are getting controlled through payment gateway monitoring & licensing protocol, e-commerce IP Address monitoring for allowing access to the website in country or not.

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Federal Tax Authority records rise in tax registered businesses Some 539 applications valued at about Dh23.74m were approved until end-June 2019

Abu Dhabi: The Federal Tax Authority has revealed that the number of tax registered businesses has increased thanks to the growing awareness among business sectors, and the ease and flexibility of electronic tax procedures available through the Authority’s official website, which was developed during the year 2019.

Khalid Ali Al Bustani, Director General of the Federal Tax Authority (FTA), stressed that 2020 will witness further development to the online services, as part its efforts to manage, collect, and implement taxes.

Al Bustani added that the continuous development of FTA services aim to maintain the best quality standards in light of having a fully electronic tax system that is the first of its kind regionally. He noted that the number of businesses registered with the authority through individual registration or a tax group increased to about 312,000.

According to FTA statistics, the total number of refund requests received through the tax recovery mechanism for the construction of houses amounted to 2,366 applications until December 2019, 1474 of which were approved for citizens who recovered the tax they paid for building their homes with a total value of Dh84.07 million, while legal measures are being taken regarding other requests submitted to the authority.

Some 539 applications valued at about Dh23.74 million were approved until the end of June 2019, with a record semi-annual growth of 254.18 per cent in the value of the recovered tax and 173.5 per cent in the approved applications.

During the past six months, 935 new applications were approved at a value of about Dh60.33 million, and the monthly average number of approved applications were 154 applications, while the average value of the tax recovered for citizens about building their new homes amounted to Dh10.1 million.

For more information regarding your Business Set-up/Tax/Audit/Accounting or other services please visit our website www.a-h-g.net or drop us an email on info@a-h-g.net

We are one of the leading Audit company present in 4 countries. Approved TAX Agent by the Federal Tax Authority and one of the very few Tax Agents who operates with Excise Tax and have a deep understanding for its needs which helps our clients comply with law requirements and Latest FTA Announcements.