UAE banks start collecting VAT from customers

According to Abdul Aziz Al Ghurair, banks have started to increase the 5% value-added tax on all banking fees and services without exception for individuals and businesses, thus ending the debate on the question of who will bear the value-added tax in the sector.

Al-Ghurair said that the demand of UAE banks to tax customers on fees and banking services is not new and that this corresponds to the research of banking systems of developed countries and global best practices .

Al-Ghurair pointed out that allowing banks under the new circular to raise 43 fees with a maximum limit of 5% of the 140 banking services has nothing to do with the countervailing banks for the tax on the added value perceived by some banks against certain individual services Before the circularization "We believe that the decision of the Central Bank is clear and will reflect positively the behavior of the banks, and will not have a negative impact on the volume of credit in the sector. "

This was canceled on June 19th. The previous Circular No. 421/2017 of 28 December 2017

required central banks and financial companies operating in the country to bear the value-added tax on commissions and banking services, which means that banks will start to collect a VAT of 5%. Fees and banking services of individuals and businesses.