- 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?
- How does VAT affect Smart Pay transactions?
VAT is levied on all forms of fee or charges for the following:
- Payroll card issuance
- WPS per employee
- SIF creation
- Card replacement
- PIN issuance
- PIN reissuance
- Balance inquiry
- Card capture due to customer default
- Wrong dispute on card transactions
Tax Registration Number (TRN) is an identification number issued by Federal Tax Authority (FTA) to all taxpayers in the UAE.
TRN of UAE Exchange Centre LLC is 100315485100003.
VAT related queries can be addressed to email@example.com. This window will be open till 15 February 2018.
No, unless the revenue (commission or any other charges) from that transaction is more than AED 10,000.