VAT FAQ
  • What is VAT?
    Value Added Tax (VAT) is an Indirect Tax to be introduced in the UAE with effect from 1 January 2018. This is going to be applicable to all products and services (except those are specifically exempted by the Federal Tax Authority).
  • At what percentage VAT is levied?
    VAT will be levied at the rate of 5% on transfer fee and other commission charges for all products and services offered by UAE Exchange.
  • On what amount 5% VAT shall be charged?
    5% VAT shall be charged on the transfer fee and commission (including other charges) collected from the customers.
  • How does VAT affect the Remittance transactions (Bank Transfers, Cash Pay-outs, Associate Branch Transfers and other in-house remittance products and services)? What all components of remittance transaction attract VAT?
    For Send Transactions
    Volume No
    Commission Yes
    Other Charges Yes
    Additional charges Yes
    Card charges Yes
    Back end charges No
    Exchange rate No
    Rebate No
    Discounts No
    Cancellation fee Yes
    Does the branch staff need to manually calculate the VAT? No, it’s automated in the system
    Will the VAT be refunded along with commission in case of cancellation? Yes, the VAT will be refunded along with the commission.
    For Receive Transactions
    Does VAT need to be charged to the customer on receive transactions? No, we are not collecting any additional charges (including other charges,commission or fee) for Receive transactions from the customers.
  • For remittance, will the rate of VAT vary for different countries?
    No, VAT will be charged at a flat rate of 5% on the commission (including all other charges) irrespective of the remitting country.
  • How about purchase or sale of Foreign currency (including Buyback)?
    Like remittance transactions, the commission (including other charges) that is collected from the customer is subject to VAT at the rate of 5%.
  • Does the issuance of UAE Exchange's Gold card or Silver card subject to VAT?
    Yes, VAT will be charged on the fee collected for the card issuance.
  • Is VAT applicable on gocash card issuance or load or reload charges?
    Yes, VAT is applicable to all these components.
  • Is VAT applicable to Bill payments, Cash collection and Smart Pay?
    Yes, VAT is applicable to the above products and services, but only on the commission (including other charges).
  • Is VAT is applicable to instant Money Transfer services like Xpress Money and Western Union?
    Yes, VAT is applicable for Instant Money Transfer facilities as well. In case of Western Union, the VAT calculation is automated in the Western Union system. Wherever manual input of data is required, the branch staff must enter the VAT information, along with other details.
  • Are tourists subject to VAT?
    Yes, tourists are also subject to VAT.
  • Is VAT applicable to Free Zone Visa holders or entities registered in the Free Zone?
    Yes, VAT is applicable to Free Zone visa holders and entities registered in the Free Zone. There is no exemption on services hence VAT is chargeable at the regular rate of 5%.
  • Are UAE Nationals subject to VAT?
    Yes, VAT is applicable to all residents of UAE, including the UAE Nationals.
  • Is there any exemption on VAT to the politicians, political bodies, Royal family or Ambassadors of a foreign country?
    No.
  • How does VAT affect Smart Pay transactions?
    VAT is levied on all forms of fee or charges for the following:
    1. Payroll card issuance
    2. WPS per employee
    3. SIF creation
    4. Card replacement
    5. PIN issuance
    6. PIN reissuance
    7. Withdrawal
    8. Balance inquiry
    9. Statement
    10. Purchasing
    11. Card capture due to customer default
    12. Wrong dispute on card transactions
  • What is Tax Registration Number (TRN)?
    Tax Registration Number (TRN) is an identification number issued by Federal Tax Authority (FTA) to all taxpayers in the UAE.
  • What is the TRN of UAE Exchange?
    TRN of UAE Exchange Centre LLC is 100315485100003.
  • In case of any VAT related queries, whom should I contact?
    VAT related queries can be addressed to tax.finance@uaeexchange.com. This window will be open till 15 February 2018.
  • Is it mandatory to collect the TRN of a customer?
    No, unless the revenue (commission or any other charges) from that transaction is more than AED 10,000.