VAT IN THE UAE: CENTRAL BANK ISSUES NEW NOTICE28-06-2018
NOTICE NO. 157/2018
On 19th June 2018, the Central Bank of the United Arab Emirates (“UAE Central Bank”) issued Notice No. 157/2018 (“Notice 157/2018”) amending Appendix 2 of the Regulations Regarding Bank Loans and Other Services Offered to Individual Customers (Circular 29/2011) which outlined the “Maximum Limits for Fees and Commissions Charged on Retail Customer Service.” The newly issued notice revokes Notice No. 421/2017 (“Notice 421/2017”) and further clarifies Value Added Tax (“VAT”) charges on capped fees and commissions charged to customers by banks and finance companies in the UAE.
Pursuant to Notice 157/2018, banks and finance companies within the UAE are obligated to inform and receive approval from the UAE Central Bank prior to the introduction of any new fee changes in existing fee levels - which exceed 5% - for uncapped fees. Banks and finance companies in the UAE would be able to submit such notifications to the UAE Central bank during the first five (5) business days of April and October of each year.
The new notice modifies Notice 421/2018 which previously outlined that banks and finance companies in the UAE would not be able to increase their existing fee structures for customers as a result of the introduction of VAT in the UAE.
In addition, Banks and finance companies in the UAE are required to provide the UAE Central Bank with a complete list of fees charged within thirty (30) days from the effective date of Notice 157/2018 (i.e. 19th June 2018).
HOW CAN TLG HELP
TLG’S Corporate & Commercial Team would be pleased to provide you with assistance and support in assessing the applicability, implacability and/or impact of Notice 157/2018 and ensure optimum compliance with all UAE VAT laws, rules and regulations.
To receive key legal updates and ensure accurate implementation of the law, rules and regulations in UAE, subscribe to TLG’s legal updates and newsletter by visiting our website, www.tlg.ae.