Host
On Drive Live for the next hour, it’s your legal hour. It used to be Understanding Property. Ostensibly, it is still about property, so if you have a property question, feel free to text in. Is there something bothering you with your rent contract? Is there an issue legally with where you live, want to live, or are hoping to live? Get in touch at 4001 or use the free app to text at no cost. You can also talk to Ludmila Yamalova directly at 423 1010.
We’ve got a number of topics to run through today. Ludmila, first of all, nice to see you. Welcome back.
Ludmila Yamalova
Thank you very much. Good to be here.
Host
Great to have you with us. We’ll get your latest VAT update in just a moment, as that topic is taking over this hour of the program. It’s becoming a VAT oracle session! But first, a quick recap. Last week was so busy, and there were understandably a lot of questions about value-added tax. You’ve attended another briefing since then. What’s the latest?
Ludmila Yamalova
Indeed. On March 21st, the Ministry of Finance held another briefing, and I attended it. It was four hours of detailed insights into what’s to come.
First, a disclaimer: The VAT law has not yet been finalized or implemented. However, based on official statements, about 90% of what we’ve heard so far is expected to remain unchanged. This consistency is why the ministry is holding these briefings to help the public and businesses prepare.
One key update is that businesses subject to VAT must register by Q4 2017 (October), with optional registration opening in Q3 2017. This means businesses should start preparing now to ensure compliance by January 2018, when VAT is implemented.
Host
Interesting! So, registration is one thing, but having systems in place to comply with VAT is another. Is registration itself complicated?
Ludmila Yamalova
Not at all. Registration and all VAT-related processes, including tax submissions, refunds, and credits, will be done online. However, businesses will still need to keep hard copies of records for at least five years.
While registration might seem simple, implementing the necessary systems for compliance will be more complex. This is why the ministry is encouraging businesses to gear up now.
Host
Got it. Let’s move to other updates. What about property?
Ludmila Yamalova
Here’s an important clarification: Residential properties, including off-plan sales and leases, will be zero-rated, meaning they won’t be subject to VAT.
However, commercial properties—both sales and leases—will have a 5% VAT rate.
Another update is that the application of VAT in free zones is still under consideration. This remains a key area to watch.
Host
That’s good news for residential property owners. Any updates about export businesses?
Ludmila Yamalova
Yes, exports of goods and services will be zero-rated. For example, if you sell goods to Belgium or provide services to a U.S.-based client, those transactions won’t incur VAT.
However, businesses dealing primarily outside the UAE may qualify for VAT refunds since their input VAT (VAT on expenses) exceeds their output VAT (VAT on sales).
Host
That’s a relief for exporters. What about government entities and nonprofits?
Ludmila Yamalova
Government entities will be subject to VAT, with internal systems to manage offsets and refunds. As for nonprofits and charitable organizations, they will be exempt from VAT.
Host
Fascinating updates! Are there any developments regarding financial services or contracts?
Ludmila Yamalova
Most financial services, including Islamic finance, will be subject to VAT. For instance, while the principal of a money transfer isn’t taxed, the service fee for the transfer will incur VAT.
Regarding contracts, the government may include a clause in the law to allow landlords and businesses to amend contracts retroactively to account for VAT, especially for long-term agreements.
Host
That’s a lot to digest. Thank you, Ludmila. For those listening, Ludmila Yamalova from Yamalova & Pletka is here for your legal questions, especially about VAT or property disputes. Text us at 4001, use the free app, or call us at 423 1010.
Host
On Drive Live for the next hour, it’s your legal hour. It used to be Understanding Property. Ostensibly, it is still about property, so if you have a property question, feel free to text in. Is there something bothering you with your rent contract? Is there an issue legally with where you live, want to live, or are hoping to live? Get in touch at 4001 or use the free app to text at no cost. You can also talk to Ludmila Yamalova directly at 423 1010.
We’ve got a number of topics to run through today. Ludmila, first of all, nice to see you. Welcome back.
Ludmila Yamalova
Thank you very much. Good to be here.
Host
Great to have you with us. We’ll get your latest VAT update in just a moment, as that topic is taking over this hour of the program. It’s becoming a VAT oracle session! But first, a quick recap. Last week was so busy, and there were understandably a lot of questions about value-added tax. You’ve attended another briefing since then. What’s the latest?
Ludmila Yamalova
Indeed. On March 21st, the Ministry of Finance held another briefing, and I attended it. It was four hours of detailed insights into what’s to come.
First, a disclaimer: The VAT law has not yet been finalized or implemented. However, based on official statements, about 90% of what we’ve heard so far is expected to remain unchanged. This consistency is why the ministry is holding these briefings to help the public and businesses prepare.
One key update is that businesses subject to VAT must register by Q4 2017 (October), with optional registration opening in Q3 2017. This means businesses should start preparing now to ensure compliance by January 2018, when VAT is implemented.
Host
Interesting! So, registration is one thing, but having systems in place to comply with VAT is another. Is registration itself complicated?
Ludmila Yamalova
Not at all. Registration and all VAT-related processes, including tax submissions, refunds, and credits, will be done online. However, businesses will still need to keep hard copies of records for at least five years.
While registration might seem simple, implementing the necessary systems for compliance will be more complex. This is why the ministry is encouraging businesses to gear up now.
Host
Got it. Let’s move to other updates. What about property?
Ludmila Yamalova
Here’s an important clarification: Residential properties, including off-plan sales and leases, will be zero-rated, meaning they won’t be subject to VAT.
However, commercial properties—both sales and leases—will have a 5% VAT rate.
Another update is that the application of VAT in free zones is still under consideration. This remains a key area to watch.
Host
That’s good news for residential property owners. Any updates about export businesses?
Ludmila Yamalova
Yes, exports of goods and services will be zero-rated. For example, if you sell goods to Belgium or provide services to a U.S.-based client, those transactions won’t incur VAT.
However, businesses dealing primarily outside the UAE may qualify for VAT refunds since their input VAT (VAT on expenses) exceeds their output VAT (VAT on sales).
Host
That’s a relief for exporters. What about government entities and nonprofits?
Ludmila Yamalova
Government entities will be subject to VAT, with internal systems to manage offsets and refunds. As for nonprofits and charitable organizations, they will be exempt from VAT.
Host
Fascinating updates! Are there any developments regarding financial services or contracts?
Ludmila Yamalova
Most financial services, including Islamic finance, will be subject to VAT. For instance, while the principal of a money transfer isn’t taxed, the service fee for the transfer will incur VAT.
Regarding contracts, the government may include a clause in the law to allow landlords and businesses to amend contracts retroactively to account for VAT, especially for long-term agreements.
Host
That’s a lot to digest. Thank you, Ludmila. For those listening, Ludmila Yamalova from Yamalova & Pletka is here for your legal questions, especially about VAT or property disputes. Text us at 4001, use the free app, or call us at 423 1010.
Host
Let’s dive back into VAT updates shortly, but remember, you can still send in your legal questions. Property disputes, rental concerns, or even broader legal issues—this is your chance to ask Ludmila directly. Ludmila, before we continue, any final thoughts on the VAT updates so far?
Ludmila Yamalova
Yes, just a quick reminder for businesses to start including VAT clauses in their contracts now. If there’s no clear mention of VAT responsibility in a contract after January 2018, the government will assume that the VAT comes off the invoiced amount. For example, if an invoice says AED 100,000 but doesn’t specify who pays VAT, it will be deducted from that AED 100,000 rather than added on top.
Host
That’s a critical point for businesses. Contracts need to reflect these changes to avoid surprises later. Okay, let’s switch gears slightly. We’ve received a few listener questions about property issues. Ready to tackle those?
Ludmila Yamalova
Of course!
Listener Question 1
I live in a centrally air-conditioned building and pay higher rent because of it. Recently, my landlord outsourced the chiller to an external agency and started charging extra for cooling. Is this legal?
Ludmila Yamalova
Short answer: No, it’s not legal. Any changes to the agreed-upon rental terms would constitute a unilateral amendment to the contract, which is not allowed unless both parties agree. If cooling costs were included in your rent previously, you have every right to insist that they remain included unless you sign a new agreement stating otherwise.
Listener Question 2
I signed a rental contract in March 2017, but it wasn’t the new unified Ejari lease. Can I request the landlord to update it? Also, my landlord hasn’t provided the title deed or other documents needed to register the contract with Ejari. What can I do?
Ludmila Yamalova
Yes, you can and should request the new Ejari unified lease. It’s now mandatory for all rental contracts in Dubai. As for the missing documents, you absolutely need to insist on receiving them. Without them, you won’t be able to register your lease with Ejari, which can cause problems later if disputes arise. Be persistent with the landlord to provide these documents.
Listener Question 3
Our flat is currently rented out, but we want to move back in. Do we just notify the tenant three months before the lease ends, or do we need to give an official eviction notice?
Ludmila Yamalova
Great question! In Dubai, simply notifying the tenant three months before the lease ends is not enough. By law, you must serve a one-year eviction notice if you want to repossess the property. This notice must be served through a notary public or registered mail. Without it, the tenant has the right to continue occupying the property.
Host
It’s clear that understanding your legal rights as a tenant or landlord is essential. Keep those questions coming!
Ludmila, let’s pivot back to VAT briefly. We’ve talked about residential properties, free zones, and export businesses. Are there any updates on financial services or startup implications?
Ludmila Yamalova
Yes, financial services—like credit cards and bank fees—will be subject to VAT if there’s a fixed fee involved. For example, if your credit card comes with an annual fee, that fee will include VAT.
As for startups, the government is still determining how to handle them. Startups are a key driver of the economy, so the authorities are looking into ways to support them in this transition.
Host
That’s a lot of ground covered! For anyone just joining us, Ludmila Yamalova is here to answer your legal questions—whether about VAT, property issues, or disputes. Text us at 4001, use the free app, or call 423 1010 to speak with her directly.
We’ll take a short break and come back with more listener questions and legal insights. Stay with us on Drive Live on Dubai Eye 103.8.
Welcome back to Drive Live. It’s the legal hour with Ludmila Yamalova from Yamalova & Pletka. We’re covering everything from VAT updates to property issues, and your questions are rolling in. Let’s get straight back into it. Ludmila, ready for the next one?
Ludmila Yamalova
Absolutely, let’s go!
Listener Question 4
What can I do if my tenant isn’t responding to emails or calls and keeps delaying rent payments? It’s adding a lot of stress. Are there any collection agencies I can use?
Ludmila Yamalova
Unfortunately, there are no formal collection agencies in Dubai for cases like this. If you have post-dated rent checks from your tenant, the easiest way is to deposit the check and let it clear through the bank. If the check bounces, you have legal recourse to file a case.
If you don’t have checks or your tenant continues to delay, your only real option is to file a case with the Rental Dispute Center (RDC). While this may seem time-consuming, it’s the best way to address the issue legally and enforce payment.
Listener Question 5
I’m an investor in a project that’s been cancelled, and the case has been moved to the courts. I’ve paid 95% of the property cost. What should I expect during this process?
Ludmila Yamalova
In cancellation cases, the courts typically require all claimants to submit proof of their payments to the developer. Make sure you’ve submitted all relevant documents, including canceled checks, receipts, and the sales agreement, to support your claim.
Regarding the amount you’ll receive, it depends on the value of the project’s remaining assets versus the total claims. If the project has been sold for AED 100 million but claims amount to AED 150 million, refunds will be distributed on a pro-rata basis.
One key point: Only payments made directly to the developer are usually eligible for refund. Premiums paid to third parties, like brokers, may not qualify.
Listener Question 6
I plan to leave Dubai later this year but want to keep my property here rented out. My residence visa will expire. Will I face any issues managing my property and bank account remotely?
Ludmila Yamalova
Good news—you don’t need a residence visa to own property or maintain a bank account in Dubai. However, you should notify your bank of your new status to avoid issues.
If you’re concerned about managing the property from abroad, consider appointing someone in Dubai as your power of attorney. This can be a trusted friend, family member, or professional service. They can handle tenant agreements, renewals, and other administrative matters on your behalf.
Alternatively, you can explore applying for a property investor visa if your property is worth AED 1 million or more. This allows you to maintain your residence status while managing your investments.
Host
Fantastic advice, as always, Ludmila. We’ve had another question come in about rental disputes. This listener asks if RERA can step in to mediate rental increases for a commercial unit.
Ludmila Yamalova
RERA can assist, but only if you file a case with the Rental Dispute Center (RDC). If your landlord imposes an unreasonable rental increase, you’ll need to challenge it formally. The RDC acts as the arbitration body for all such disputes, including residential and commercial properties.
Remember, filing a case with the RDC is like filing a court case—it’s an official legal process, so ensure you have all your documentation in order before proceeding.
Host
That’s great clarity for anyone dealing with property disputes. Keep sending in your questions to 4001 or via the free app. Ludmila, before we wrap up, any parting advice for our listeners navigating legal challenges in Dubai?
Ludmila Yamalova
Yes, my advice is simple: always read the fine print and collect supporting documentation for any transaction or agreement. Whether it’s a property contract, a tenancy agreement, or a business deal, having the right paperwork ensures you’re protected if a dispute arises.
And for those preparing for VAT, start now. Ensure your contracts are updated and your systems are ready to handle compliance. January 2018 is just around the corner.
Host
Wise words, Ludmila. That’s all the time we have for this week’s legal hour. Thank you for joining us and answering so many questions.
Ludmila Yamalova
Thank you, as always!
Host
This has been Drive Live on Dubai Eye 103.8. If you missed any part of today’s show, catch the replay on our website. Until next time, stay informed and take care!