Host
There’s just so much more to hear. Download our podcast at DubaiI1038.com. It’s Drive Live with Claire Sharrock and Sally Moose this evening. Text 4001 if you want to get in touch with the show. We’re about to talk legal matters on Drive Live. A warm welcome to Ludmila Yamalova, Managing Partner at HPL Yamalova and Plewka, here in the hot seat as usual on a Monday, ready to answer any legal questions you might have.
Host
Hello Ludmila. Good to have you here as ever.
لودميلا يامالوفا
Good to be here as always.
Host
Text 4001 to ask Ludmila a question this evening. We’ve got plenty in already, so get yours in quickly—we always run out of time, and we don’t want you to miss out. Let’s start with a topic that we’ve discussed with you well over the recent months. The UAE announced, of course, its intention to introduce Value-Added Tax (VAT) from January 1, 2018, quite some time ago. Just last week, we finally saw the issuance of the Tax Procedures Law, which sets the foundation for the planned tax system, regulates the administration and collection of taxes, and redefines the role of the Federal Tax Authority. Ludmila, that’s a mouthful. What does it all mean? What’s new? We’ve known it’s coming for ages, but now there’s a law—what does it say?
لودميلا يامالوفا
It’s a mouthful, but it’s just the tip of the iceberg. It’s actually a lot more than that. The name itself is pretty complicated. But there’s one word you used that’s fundamentally important to this discussion, procedural law. This is only a procedural law—it’s not yet a transactional law. In any jurisdiction, you have different types of laws. One sets up how to, for example, bring a case. The other deals with the substance or the merits of a case and the nuances of a particular claim. This particular law, Federal Law No. 7 of 2017, only relates to procedure. So, in relevant terms, it’s not substantially different from what we’ve discussed in the past—it’s just a lot more detailed.
لودميلا يامالوفا
For the purposes of our listeners, the details are more than anybody wants—or cares—to hear right now. It would take the whole program to cover them all, and it’s very technical. It’s also a little premature because we don’t yet have the substantive law, which is really what everybody cares about.
Host
So was this what you were expecting? We’ve talked about how we’re still waiting on the law—it’s coming, it’s coming. Is this what you thought would be released last week?
لودميلا يامالوفا
I think by now, we actually expected to have both sets of laws—or at least the one most people are waiting for: the substantive law. That’s the law which will set out the percentage of VAT, which industries will be subject to it, what the exemptions are, and details on the input and output taxes. Businesses need that information to figure out how to adjust their accounting practices and restructure their businesses. This particular law, however, doesn’t address any of that. And more importantly, it’s not limited to VAT. Remember, what we’re waiting for is the outline or roadmap of what VAT will look like and how it will be implemented. This law is much broader than VAT. There’s no mention of VAT, so we can only speculate. But it’s obviously drafted with a much longer future in mind.
Host
It sounds like this law is more about laying the groundwork for a tax system in general.
لودميلا يامالوفا
Absolutely. This is a foundation. For example, one provision outlines that all documents submitted to the tax authority must be in Arabic.
لودميلا يامالوفا
This provision stood out to me. It says that the official language for tax returns, data, information, records, and related documents must be Arabic. If enforced strictly, this could fundamentally reshape how businesses manage their bookkeeping. For example, invoices might need to be bilingual, and anyone issuing invoices may need to speak Arabic. This is significant because, while Arabic is the official language of the UAE, the business language here is English—especially in the free zones.
Host
There must be a lot of businesses without Arabic-speaking accountants.
لودميلا يامالوفا
Exactly. And it’s not just about language. If everything has to be in Arabic, businesses would need to fundamentally change their systems. Another key provision establishes the Federal Tax Authority’s role in licensing tax auditors, conducting audits, and issuing notices. It’s very technical and nuanced.
Q&A Section with Listeners
Listener Text
Can allowances be deducted from my salary when I take annual leave, even though it’s stipulated in my employment contract?
لودميلا يامالوفا
In short, no. That’s against the law. Any contract or document attempting to override the law is invalid. Employers are not allowed to override legal provisions, so such deductions are not enforceable.
Listener Text
Can a company work without an agent, or is it mandatory to have one under VAT?
لودميلا يامالوفا
Companies are not required to have a tax agent. They can appoint someone internally to handle communications with the Federal Tax Authority. Tax agents are optional and more for convenience.
Listener Text
All VAT-related documents may need to be submitted in Arabic. Isn’t that why legal translators exist?
لودميلا يامالوفا
Yes, legal translators can help, but it’s not as straightforward as it sounds. Arabic is complex, and translations can miss nuances. From experience, even certified translations often require review to ensure accuracy. Additionally, legal translations of all receipts and invoices could become costly and time-consuming if required.
Listener Call
Hi, my landlord isn’t responding to my notices, and now he’s saying I owe him rent for a full year. What can I do?
لودميلا يامالوفا
If you’ve served notice through WhatsApp, SMS, or other means, and have proof of delivery, you’ve fulfilled your obligation. If the landlord refuses to engage, they must file a case to claim rent. The Rent Committee will not award a full year’s rent unless the landlord can prove substantial damages, which is unlikely if you’ve vacated. Keep all proof of communication and don’t worry unless legal action is initiated.
Host
Thanks to everyone for their questions tonight, and thanks to Ludmila for helping us navigate these complex issues.
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