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UAE Central Bank will soon decide on passing VAT to customers

dubai - The apex bank is in the process of informing banks of its final decision

The Central Bank of the UAE is likely to soon decide to allow banks to pass on 5 per cent value-added tax (VAT) to customers.

Quoting sources, the Arabic daily Al Khaleej reported that the apex bank is in the process of informing the banks of its final decision in this regard to pass on VAT to companies and individuals from May 1.

The central bank issued a circular in late December 2017 asking banks not to increase existing fees ahead of VAT until further notice from the apex bank.

Mayank Sawhney, director, MaxGrowth Consulting, earlier told Khaleej Times that the processing fee, file opening fee, assessment fee, evaluation fee, account management fee, etc., charged by 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, processing fee for transferring outstanding payment from one credit card to another, etc., will also attract 5 per cent VAT, Sawhney added.

However, some banks had updated their websites last year ahead of VAT implementation with notifications that certain fees, charges and commissions that they charge on their products and services will be subject to a 5 per cent VAT.

- waheedabbas@khaleejtimes.com