The UAE government have announced to introduce Value Added Tax (VAT) from January 1, 2018 with 5% tax on goods and services.
Banks and finance companies will not be permitted to exceed the fees structure for individual customers because of VAT. The apex bank have asked the local banks not to increase their existing fees structure and levels for non-individual customers as a result of VAT.
UAE will levy five per cent VAT from January 1, 2018 on a host of goods and services. Saudi Arabia will also join the UAE in implementing VAT. Other regional countries will implement VAT at a later stage.
The Processing Fee, File Opening Fee, Assessment Fee, Evaluation Fee, Account Management Fee etc. charged by the banks will be subject to 5 per cent VAT in the UAE.
In case of credit cards, fees such as Annual Credit Card Fee, Late Payment Fee, and Processing Fee for transferring outstanding payment from one credit card to another etc. will attract five per cent VAT.
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