October 14, 2017
“The introduction of VAT regime is not merely a change in taxation. It’s a change in how we do business”
Grid: With implementation of VAT around the corner in UAE, what more can you tell us about the proposed VAT legislation, with an emphasis on financial services?
Jigar Doshi: UAE VAT law has been designed in such a way that, at a macro level, it will cover almost all the supplies of goods and services including import of goods / services, real estate, energy and even water supplies.
There are certain relaxations offered in the manner of zero rating and exemptions in the UAE VAT law. For instance, exports, international transport, certain education services are to be zero rated, whereas certain financial services, supply of empty land, local passenger transportation are to be exempt from the VAT levy. All other supplies will attract the standard rate of 5%.
“Banks still have to find a niche and stand out to win clients”
The Grid: Do you think wealthy families have aligned their mindset to the new status quo globally i.e. the inevitable shift towards more disclosure of information?
Pankaj Narain: The sense is that it is all too early at this stage for everybody to take in the entire impact of what’s going to come. At Hinduja Bank we have started speaking with clients on this subject. CRS will impact pretty much everybody with a bank account.
Have clients understood the whole piece? Perhaps not. My sense is that clients require an education process to get there. Our relationship managers are explaining to them why this is happening. All stakeholders have an important role to play, including the Regulators.
The Grid: How is the advent of the CRS beneficial to clients? Does the industry have their buy-in?