May 1, 2017

Хозяин

Welcome to Drive Live. Ludmila Yamalova is here with us for the Legal Hour. Ludmila, it’s great to have you.

Людмила Ямалова

Thank you, always a pleasure to be here.

Хозяин

Let’s dive in. Over the past few weeks, you’ve attended VAT briefings, and while the law isn’t finalized, we’re getting a clearer picture of its implications. What’s the latest on VAT registration for groups?

Людмила Ямалова

Indeed, the Ministry of Finance is encouraging businesses to prepare. A significant update is the concept of a “VAT Group,” which applies to related companies under common control. Instead of registering separately, these companies can register as a single group with one VAT number. This is especially beneficial for businesses with multiple legal entities in different emirates, as it simplifies internal transactions and reporting.

Хозяин

What does “common control” mean in this context?

Людмила Ямалова

It’s a somewhat subjective term. It generally applies to businesses with multiple licenses or legal entities under shared management. The tax authority will accept a declaration confirming common control, but businesses must be cautious. If supporting documents contradict UAE laws—such as agreements undermining the 51-49% Emirati ownership rule—the declarations may face challenges.

Хозяин

Just a reminder—while VAT law isn’t finalized, these insights are based on Ministry of Finance briefings. The focus is on helping businesses prepare for VAT implementation, which starts on January 1, 2018. Registration opens in Q3 2017, with mandatory registration by October.

Людмила Ямалова

Exactly. Businesses should begin organizing their records and processes to ensure smooth compliance.

Question from Anthony

Will VAT apply when purchasing an established home (not off-plan)?

Людмила Ямалова

Good question. Residential properties, whether new or resale, are subject to 0% VAT. This is different from commercial properties, which are taxed at 5%. The clarification helps avoid confusion about VAT’s application to different property types.

Question from Emma

Can a landlord send a notary public two weeks after lease renewal, asking tenants to vacate for personal use or sale?

Людмила Ямалова

Yes, but the eviction notice starts the clock from the day the tenant receives it—not from the lease renewal date. If the landlord has dual reasons, like selling the property or moving in, both should be clearly stated to avoid legal challenges.

Хозяин

What should tenants do if landlords increase rent unreasonably?

Людмила Ямалова

Tenants can file a case with the Rental Dispute Committee (RDC). However, tenants must ensure they deposit their rent checks with the RDC to demonstrate willingness to pay. This protects tenants if landlords claim non-payment.

Question from Brian

Can I keep my HSBC bank account open if I leave the UAE but retain property here?

Людмила Ямалова

Yes, most banks allow non-residents to maintain accounts, especially if linked to mortgages. Ensure you notify the bank about your status change and maintain a clear line of communication.

Question from Dave

Can I manage my property remotely after leaving the UAE?

Людмила Ямалова

Yes, but it’s advisable to appoint someone via a power of attorney for smoother transactions. Alternatively, you can apply for an investment visa tied to your property, allowing you to retain residency status.

Хозяин

Ludmila, thank you for sharing your insights today. As always, we couldn’t get to every question, but we’ll revisit them next time.

Людмила Ямалова

Thank you! Always a pleasure to help clarify these legal concerns.