New shisha tobacco, e-cigarettes tax rule announced in UAE

His Highness Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and Minister of Finance and Chairman of the FTA have issued a verdict by which the "Marking Tobacco and Tobacco merchandise Scheme" are enforced on tobacco pipe and electrically heated cigarettes as of November 1, 2019.

Digital Tax Stamps

The decision additionally determines the dates once "Digital Tax Stamps" are created accessible, moreover because of the standards for storage them. The authority has explained that the scheme facilitates inspections at native markets and customs ports to stop the sale of contraband merchandise and product wherever the liabilities weren't paid, and combat business fraud. Digital Tax Stamps are going to be placed on packages of tobacco merchandise and registered within the FTA information.

The stamps store digital data that may be scan with a special device to verify that every one taxes due on the same merchandise are paid.

Federal Tax Authority

In a press statement issued these days, the FTA declared that the finding supports its efforts, together with relevant entities, to gather taxes, combat nonpayment, and implement uniform procedures to confirm transparency, guarantee rights, and highlight the responsibilities of all taxable persons. The FTA call No. 2 of 2019 on Implementing the Marking Tobacco and Tobacco merchandise scheme consists of 5 articles. It determines first Nov 2019, because of the date once the Digital Tax Stamps are out there to order by importers or producers of selected excise product, that embody water pipe tobacco and electrically heated cigarettes.

The decision additionally stipulated that as of March 1, 2020, it'll be prohibited to import selected excise product not bearing the stamps into the UAE, then beginning June 1, 2020, it'll not be permissible to produce, transfer, store, or possess unmarked selected excise product in UAE.

As per the choice, Digital Tax Stamps should be firmly held on before being pasted to the selected excise product in accordance with a group of minimum-security needs. The person behind for storing the stamps shall be needed to produce info, data, and records as requested by the FTA so as to verify that the provisions of the article are enforced.

The FTA's press statement went on to clarify that the choice was a part of its strategy to expand the scope of the "Marking Tobacco and Tobacco merchandise Scheme" to cover all tobacco merchandise - foreign and domestically made and distributed - which can be electronically tracked from production till they reach the top client to make sure full compliance with excise obligations.

FTA-VAT Registered Businesses Must Display VAT Inclusive Prices

According to the Federal Tax Authority (FTA) of UAE, there would be Dh15000 fine on businesses – that fail to display their tax-inclusive prices. FTA mentioned businesses which are eligible for excise tax and VAT (value-added tax) and said, they must display the prices of their products along with the services they provide – in order to save themselves from the penalties and a massive fine. VAT consultancy UAE gives each and every information related to the VAT and penalties linked to it.

In a statement, the FTA urged consumers to know what their rights are, according to the law and mentioned that the prices displayed on goods must be inclusive of taxes and if they didn’t display tax-inclusive prices, then there would be a penalty of DH15000 on them - highlighting the VAT compliance and filing.

FTA also highlighted that the displayed price must be the total amount that customers will pay on getting the UAE tax invoice – including the total price and the tax which is charged from it. FTA also added that it would be considered as a violation if any firm or individual display price excluding the amount of tax – since this practice misleads the customers.

The Federal Tax Authority also urged businesses that are registered for excise tax and VAT to follow the tax laws so that they could avert administrative fines and penalties. The VAT survey started in UAE, at the beginning of 2018 - at 5% rate and the excise tax was implemented last year - at a rate of 50% on carbonated; 100 % on products like energy drinks and tobacco.

Read More: Federal Tax Authority–All Registered Firms Must Submit VAT Returns

10 Year Residency Visas for Investors and Specialists in UAE

Now investors in UAE can have 100% ownership of their companies. But the question arises - how? According to an announcement made by the Vice-President and Prime Minister of the UAE, Sheikh Mohammed bin Rashid Al Maktoum, specialists and investors, including engineers, doctors, and chartered accountants in UAE are soon going to receive the residency visas of UAE which will have the validity of up to 10 years. Also, their families will be receiving the similar validity for their visas as well. In the announcement, it was also mentioned that the students who have top performance in their universities will be also allowed to get residency visa scheme based on 10 years.

100% Ownership and Residency Visas

Sheikh Mohammed took Twitter to spread his word as he said that investors from all around the world can have a complete ownership of their organizations and companies in UAE and the system will allow high-performing students and investors to get 10-year residency visas, especially for technical, scientific, medical, and research fields. This system will also grant 5-year residency visas for the students who are currently studying in the UAE as well as 10-year visas for other extraordinary students. Also, the system aims to make UAE an ideal place for investors.

Sheikh Mohammed tweeted:

"The UAE will remain an incubator for innovators and a hub for investors."

Visa Extension ­to Ease Up Students Future

The decisions will be implemented by the end of the year as the Vice-President of the UAE has directed the bodies to do so. The existing residence visa scheme will be also reviewed by them in order to extend the visa validity duration of dependents including the families and especially students after they get their university studies completed so that they could easily start their future in UAE. This, at the same time, will also give them an opportunity to learn about their future practical options. However, UAE VAT registration will be a matter of concern for them.

In his tweet, Sheikh Mohammed said:

"Our open environment, tolerant values, infrastructure and flexible legislation constitute the best plan to attract global investments and exceptional talents. The UAE will remain a land of opportunities. It is the best environment to realize the dreams of humans and unleashes their exceptional potentialities."

What do business owners think about 10-year visa scheme in UAE?

The 10-year visa scheme is being hailed by many industry experts and business owners. According to the founder and chairman of Danube Group, Rizwan Sajan, this is a great move to build trust and confidence in the UAE, as he said:

"This (move) boosts the trust and confidence which we already have in the UAE. We are thankful to Sheikh Mohammed for this initiative, which will surely boost the economy."

Senior partner at Crowe Horwath, Atik Munshi said that this move is a fantastic development for attracting investments. He said:

"The 10-year visa is not only incredibly attractive but also has come at the right time when the UAE is looking to enhance its investor community. This will build up enormous confidence for the investors who want to make the UAE their home."

Read More: FTA-VAT Registered Businesses Must Display VAT Inclusive Prices