Dec 19, 2017 6:30 PMThe Law Firm of JASON HUF INTERNATIONAL, pc (JHI) will close the doors of its New York HQ Office for the "High Holidays" of Christmas and New Year's Day starting Thursday, December 21, 2017 at 5:00pm.JHI will resume regular business hours on Tuesday, January 2, 2018. As usual, office visits in 2018 will be by Appointment Only.During the Holiday Season, the Jeddah, Saudi Arabia office and the Khalil Khazinar Law Firm will remain open. In the event of an urgent matter arising during the High Holidays, Mr. Huf can be reached directly by e-mail.From everyone at JHI, Merry Christmas!! And best wishes for a happy, healthy and prosperous New Year!
Dec 14, 2017 6:28 PMCommensurate with its Gulf Cooperation Council (GCC) obligations, the United Arab Emirates (UAE) will fully-implement the Federal-level imposition of a Value Added Tax (VAT) of 5% on most goods and services, and associated registration and reporting requirements, along with Excise Taxes on certain goods (50% on "fizzy drinks" & 100% on energy drinks and tobacco products), effective January 1, 2018.
Some industries are exempt from responsibility for VAT by statute, such as certain transportation services and basic healthcare providers. Real estate transactions within the first three years (thus far) of the law's enforcement are also exempt from VAT in the UAE.
Companies doing business in any of the Emirates who are not in an exempted industry and whose turnover exceeds the statutory threshold (AED 375,000 over a period of 12 months) were required to register for VAT by December 4, 2017, or face a penalty. In future, companies whose turnover does not yet exceed the statutory threshold will have to become compliant within one month of achieveing such turnover during a 12 month period. Companies who are not yet required to register and report for VAT may apply to do so voluntarily, provided their 12 month turnover exceeds AED 175,500. If a company anticipates exceeding the mandatory threshold in the future, then voluntary registration may be advisable so that a future 30 day deadline will not present potential difficulties.
Initial estimates are that approximately 350,000 companies will have registered for VAT in the UAE by the statutorily stipulated date. An exact figure is not yet available.
Reporting/ filing of returns will be performed on a quarterly basis. This may precipitate retaining Registered Tax Agents (and, JHI recommends that reporting companies retain such professional services).Naturally, being a new law, regulations, clarifications and other factors affecting implementation of and compliance with the new laws (UAE Federal Laws 7, 8 & 13 of 2017) remain subject to change at this stage. The UAE Ministry of Finance provides this page to provide basic information, timely updates and a starting point for researching and tracking the new tax regime:https://www.mof.gov.ae/En/budget/Pages/VATQuestions.aspx
One issue that begs for near-term clarification is the question of taxability of Free Zone entities. At the time of this writing, the responsibility for actual payment of VAT by entities established in Free Zones, including "Financial Free Zones" (such as the Dubai International Financial Centre, or DIFC; or, the Abu Dhabi Global Market, or ADGM), remains somewhat unclear. For example, following current guidance from the Federal Tax Authority (FTA), the agency with primary responsibility for the enforcement of VAT, such entities should be registered for VAT if their turnover exceeds the mandatory threshold. On the other hand, by Emiri decree (issued under a recent Constitutional provision), a 50 Year Tax Holiday has been established for the ADGM (measured from the effective date of the underlying law).
The UAE Cabinet has not yet issued its decision identifying any "Designated Zone" (wherein established entities may receive at least some partial or limited form of exemption from VAT) as the law empowers it to do, and the issue of responsibility for payment by companies in Financial Free Zones involves something of a Constitutional question. However, as stated above, it is hoped that additional clarifications may be issued by the relevant authorities in the near future. It is also worth noting that the FTA's determinations/ decisions can be challenged through the courts, provided there is a credible legal basis for such a challenge.
Being a brand new area of law, such gray areas are to be expected. The drafters of the new laws concerning VAT certainly seem to have expected this, as certain mechanisms - such as the ability to challenge FTA policy decisions in court - are built into the new tax regime to ensure transparency and fairness (important factors in any healthy business environment) as and when important issues are sorted.
Thinking more globally, one wonders what this may do to the famously business-friendly reputation the UAE has enjoyed for decades. After all, "the (tax-free) UAE is the Place to Be" in the Gulf region. JHI believes that the imposition of the VAT, in and of itself, will not severly impact the UAE's positive business environment.
The imposition of VAT is a GCC-wide program, agreed upon by the member states. The level of tax will be 5% across the board, and goods and services exempt from the tax will be similar almost to the point of being mirrored from jurisdiction to jurisdiction. Compliance steps and associated costs should be roughly equal in each of the member states. And, the timing of full VAT implementation in the member states should coincide (the Kingdom of Saudi Arabia, for example, is also introducing its new VAT in January of 2018). So, this should not significantly reduce the attractiveness of the UAE for investors, nor does it seem likely to impact the UAE's role as a gateway into the other GCC economies (such as Saudi Arabia - the largest economy in the GCC).
As a GCC member state, the UAE has agreed, and is obligated, to impose VAT. With recent fluctuations in the price of oil and the recent military build-up, in addition to the maintenance of basic services, additional revenues are needed to keep the national debt at a sustainable level.
The broadening of the UAE's economy in recent years has provided an opportune situation wherein the imposition of VAT (as opposed to other taxes and/ or fees) makes sense. On paper, it seems the best available method of helping to keep the UAE's fiscal ship steady. Although it will contribute an additional layer of expense onto the costs of living and doing business in the UAE, the UAE enforces no other tax and the compliance costs associated with the UAE's regulatory environment are among the least burdensome in the world. As to the pre-VAT cost of living and doing business in the UAE (such as real estate, some services and many goods), much of this is due to high demand brought about by a decades-long strong international interest in participating in the UAE market.
Further, the UAE, with a low-cost regulatory environment and a mere 5% VAT, seems poised to remain the gateway to one of the fastest growing regional economies in the world. JHI believes that for businesses who view the GCC as an attractive area for investment, the UAE will continue to flourish as a "starting-off" or set-up point for such investment, and at a time when the economies of the GCC may be poised for potentially explosive growth during a revolutionary time of profound reforms throughout the region, particularly in Kingdom of Saudi Arabia.
JHI will continue to monitor the situation, and track legal developments concerning the implementation of the VAT, in the UAE and throughout the GCC.(Mr. Huf gratefully acknowledges the contributions to this brief note by his good friend Sreekumar Radikrishnan of Goodwins Law Corporation's Abu Dhabi office. Mr. Huf calls Prof. Radhakrishnan his "top Go-To guy" in the UAE - especially on new tax matters: http://www.goodwinslaw.ae/about-us/our-team/sreekumar-radhakrishnan/
This website and its contents - taken in whole or in part - are a law firm advertisement. As with all other entries in the blog section of JHI's website, this article is intended to contribute to public discussion and is published for and distributed to a rather general audience. This article is not legal advice and should not be mistaken for such.
In the event legal advice is needed on the subject of VAT in the UAE, Mr. Huf & JHI will be happy to introduce and refer any such client to Prof. Radhakrishnan & Goodwins for his personal attention.
Finally, Mr. Huf also wishes to make clear that any opinions expressed herein are solely those of Jason Huf & JHI.)
Oct 12, 2017 2:05 PM
By R. Jason Huf
When recollecting the uses of my spare time as I sat down to pen my previously promised piece on fully utilizing the summer months to achieve Work-Life Balance goals, I realized that a simple "How I Spent My Summer Vacation" article would be insufficient. During the summer, indeed throught 2017 thus far, I seemed to gravitate to leisure activities that were relaxing and - sometimes - valuable beyond taking a mere breather for myself.
So, I have instead decided to include something in this writing about how time taken to relax, though not billable, can still be valuable - to ourselves and others. Indirectly, a more relaxed you is likely to be of greater help to your client. But, beyond that, there are activites that are relaxing, interesting AND enriching to your profession and society more broadly.
After all, a desire to influence and shepherd positive change is at least part of the motivation that drove us - and still drives us - along our respective career paths, isn't it?
I have always been public-service minded. This is reflected in my legal practice, wherein certain investments, projects and other client matters have over time and in the aggregate served as a small piece of a small piece of the large, complicated puzzle of establishing a foundation for economic and social reform in Saudi Arabia and the larger Middle East (parenthetically, I am pleased to see that today's reforms are more sweeping and are being enacted much more quickly than I had anticipated, or even hoped).
Accordingly, I often find "relaxation" and satisfaction when I can make time for pursuits that have some intrinsic (but, not necessarily obvious) value to the larger world around me. Take, for example, a presentation hosted by Oxford University's North American office on Manar al-Athar and its efforts to catalogue ancient sites in the war-torn Levant so that they can be preserved or (in the event they have already been or are going to be destroyed by insidious groups like Daesh) restored after the shooting finally stops. When "endangered" cultures become lost civilizations, it degrades the whole of humanity. I encourage you to give this group's efforts a fair look. And, hey, wine was served...
(Sometimes, to your surprise, you may get to meet fabulous people like the one pictued here. Also pictured, standing next to this fabulous person, is a member of the Hashemite Royal Family... )
(Attorney Disclaimer: NOT an endorsement of JHI by HRH!)
Whatever your line of work, your position as a professional provides you with access. In addition to being present at the above-referenced presentation, I'm rather excited to say that I have accepted an invitation to join the New York City Bar Associations's Committee on Middle Eastern & North African Affairs (MENA Committee). Then again, the MENA Committee has a pretty robust agenda, so I may end up regretting this...
Kidding aside, there aren't too many bar association committees in New York, Pennsylvania or New Jersey (the jurisdictions where I am admitted to practice) that specifically focus on subject matter so closely aligned to my practice, so in addition to being recognized for my work after so many years in the field, I am actually looking forward to the (non-billable) work ahead.
Now, I'm not saying that all of your spare time needs to be "meaningful", only that the added element of being satisfyingly productive in some measure may add to the value of your relaxing uses of the downttime you manage to carve out of your busy schedule. Different people have different interests and run at different speeds. I may be someone who has yet to take a real "vacation" at any point in my life, but I do not dispute the notion that relaxation for relaxation's sake is absolutely fine.
For those of you who have the discipline to make the effort to force yourself to take a vacation, more power to you. For the rest of us its enough of an endeavor to find forms of refreshment that are somewhat more limited in scope. But, no worries - it ain't that tough. Really!
Again, Pennsylvania is one of the jurisdictions in which I am admitted to practice. On occassion, I travel to Philadelphia on business. When I know I'm to make the short drive into Philly, well, being a long-time Philadelphia Phillies fan (and, you cannot be a Phillies fan without being a an of baseball period - trust me on that one) I like to catch an evening game when they are playing at home. Why not? I'm a phan, its the thinking man's sport, Citizens Bank Park is a great ballpark and I love Dollar Dog Day.
Also, this past year, the NFL Draft was hosted there (great event, and Philly did a fantastic job of hosting); and, the Philadelphia Orchestra celebrated the works of Mozart not very long ago - as part of that celebration, there was an opportunity to see a showing of the film "Amadeus" (one of my favorites), with the orchestra providing a live sound track.
(NFL Draft - Philadelphia, Pa.)
Some things can be done spur of the moment, without planning, and can be done by almost anyone, especially in New York. Catching the recent solar eclipse without special glasses was easily done by using my phone - I perched it over my shoulder and recorded a brief video. Anyone who could walk to Battery Park (or any open space where the sun was at least partially blocked by the moon that afternoon) could have done the same thing. Many did.
https://www.youtube.com/watch?v=SpdAcRPtZ8Y (As you can see, the Firm's YouTube Channel is still in the "experimental" stage)
When I lived in Jeddah, Saudi Arabia years ago, I took up snorkeling on the weekends and fell in love with the Red Sea and the coral reef beneath its surface. Some folks encouraged me to take up diving, but diving is a great deal of work. If what I do for recreation is more work that what I do for a living, I have something of a philosophical problem with that...
My dog can be a great deal of work (and, don't get a dog unless you are honestly ready, willing and able to do all of the work associated with sharing your home with a dog), but she is without question the exception to the above-referenced rule. When it comes to time well-spent, I am hard-pressed to think of anything more rewarding and relaxing than walking my dog.
Sometimes, I'll just call it an early day at the office and go out. Its New York, man - hit the town. Fridays tend to be ideal: the Middle East is closed on Fridays and the West is in the process of shutting down for the weekend, with businesses in London generally closing by 12:00 noon, US Eastern time (though, I must be mindful of places in other time zones, such as Houston, Texas, which is an hour behind New York). And, naturally, your employees won't mind being able to knock off a little early before the weekend, or will they...
("Seriously, you can leave... ")
In any event, I find that making time for yourself and your favorite people (or, pets) is not impossible - it really boils down to time management. I have also found that taking the occasional, but regular, breather won't kill the bottom line, can make you better at your job and (depending on the activity at hand) may even have the potential to make the world a better place. And, I feel like a million dirhams.
(This is what a million dirhams looks like... )
So, even with the cold winds of winter coming, ready to whistle through the concrete canyons of downtown Manhattan (and I hate winter) - I'm going to continue to make time for me. Since returning to the United States several years ago, I have ordinarily gone into hybernation every winter (absent JHI's Annual Informal Holiday Gathering), but not this year.
Why work so hard in the first place? I don't live to work, I work to live (and, my work is pretty darned good anyway, if I do say so myself). So, I'll work as hard as I play, and play as hard as I work. Maybe you should, too? Whether its rubbing elbows with royalty from an ancient noble line, or having a beer or two with your cheeseburger during an extra-long lunch. Hey, whatever floats your boat.
The bottom line is this: You have an epic and fabulous career, so Live an EPIC and Fabulous Life. There is no point to doing anything else.
I decided against supplying the entire list of extra-curricular activites because if I did you'd still be reading this instead of engaging in your own leisure pursuits (if reading this little blog is one of your leisure pursuits, well, I'm flattered).
Oh, and we all have to get some work in once and a while, too. OK, now back to the grind... : )
– Jason Huf
Thursday, October 12, 2017
New York, NY
Jason Huf International, pc
"Exploring the Boundaries of Your Business."