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	(265663,25702,'ReportText','<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignleft size-full wp-image-8015\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/19.jpg\" alt=\"\" width=\"4573\" height=\"1322\" /></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Combating corruption is a hot topic across the globe. Scoring on top of international rankings, the Nordic countries (being Denmark, Norway, Sweden, Finland and Iceland) have traditionally been regarded as the global frontrunners when it comes to anti-corruption. In the Middle East, governments are working hard to decrease bribery and increase transparency in society, which ultimately complements the general promotion of civil rights. Research indicates that free speech, independent media, political dissent and an open and engaged civil society, access to information and the non-existence of censorship are the core elements preventing corruption.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The author previously practised law in Finland, advising Finnish and Scandinavian clients, before locating to the UAE. In this article I seek to provide comparative insights on the topic of anti-corruption practices between the Middle East and the Nordic countries, in light of current developments.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>From global harmonisation of laws to local enforcement</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Combating corruption on a global level is subject to several international treaties, the provisions of which are then transposed to national laws, harmonising the content thereof. The most important international treaties in this regard are the United Nations Convention Against Corruption of 2003 and the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions of 1997. In Europe, an intergovernmental body called the Group of States against Corruption (GRECO) was established in 1999 by the Council of Europe to monitor its Member States’ compliance with the organisation’s anti-corruption standards.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The intention of international treaties is to establish common worldwide legislative standards for anti-corruption laws through imposing obligations on the Member States to bring their legislation in line with the obligations of the treaties. As a result, the laws of different Member States should include similar provisions criminalising the different forms of bribery, which provisions are locally enforced by national authorities. Despite these developments, it goes without saying that the national anti-corruption laws are far from being harmonised and different geographic regions face different corruption related challenges.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Corruption Perceptions</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Transparency International is a non-governmental watchdog promoting anti-corruption in the world. It publishes an annual Corruption Perception Index, ranking 180 countries and territories by their perceived levels of public sector corruption, predicated on information provided by experts and businesspeople.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Middle East consists of a variety of jurisdictions, many of which are far from homogenous. While some of the countries are still subject to weaker public institutions due to, e.g.; internal conflict, a number of countries in the Middle East, such as Jordan and Lebanon, are taking positive steps towards fighting corruption and increasing transparency and integrity in their societies. The hard work conducted by local governments in the Middle East is gradually attracting the attention of the rest of the world.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This year, the United Arab Emirates (\"UAE\") ranked higher on the index than ever before. The UAE reached the 21st position in the ranking being the frontrunner of the Middle East. According to Transparency International, this may be due to good and efficient management of public finances, improved public procurement and better access to public services and infrastructure in the UAE. In 2016, the UAE carried out a significant reform of its criminal laws, which may be reflected in the Index as well.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Nordic countries usually score highest in international anti-corruption rankings. According to the latest Corruption Perceptions Index, Denmark was ranked the 2nd least corrupt country in the world, after New Zealand. Finland and Norway shared 3rd spot and Sweden ranked 6th. Iceland, holding 13th position, appears to be an outlier among Nordic countries.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Considering the rankings, one may ask whether Nordic countries are perhaps a safe-harbour from corruption. Despite the apparently excellent reputation, do corruption related risks still exist for businesses in the Nordics? Are the Nordic Countries the complete opposite to the Middle East?</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Finland: There is a snake in paradise</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Despite direct bribery being relatively rare in Finland and the rest of the Nordic jurisdictions, the existence of conflicts of interest and the lack of transparency in declaring conflicts of interest have turned out to be a common feature of the Nordic countries. This may be difficult to detect considering it is an inherently subjective evaluation. I suggest corruption does exist in Nordic countries, but that it has taken forms that are relatively difficult to detect by researchers.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In the aftermath of its evaluation round in September 2017, GRECO issued recommendations to Finland aimed at improving its anti-corruption regime, such recommendations being published in March 2018. Six of the recommendations issued by GRECO concerned senior government officials and ministers, and eight of them law enforcement authorities. Regarding law enforcement agencies, GRECO recommends that the Police and the Border Guard develop a dedicated anti-corruption strategy or policy, compile a code of conduct and specify their guidelines for secondary employment, organise training on the prevention and combating of corruption, and reinforce ethical practices in their career-related processes. In addition, it is recommended that the police enhance their risk management, internal oversight, and procedures to be followed by their officials when taking up secondary employment.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">When it comes to whistleblower protection, GRECO recommends that the Police and the Border Guard be obliged to report suspicions of corruption and that protection of the whistleblowers be enhanced. At the moment, Finnish law does not include all-encompassing provisions protecting whistleblowers, applicable across different industries and, as a result, whistleblowers are practically protected only by the provisions in the Employment Act regulating grounds for dismissal. When it comes to the GRECO anti-corruption recommendations with regards to judges, public prosecutors and Members of Parliament, the Finnish Ministry of Justice announced in May 2018 that it has duly implemented all the recommendations. Also, the current Minister of Labour is strongly promoting enhancing whistleblower protection in Finland according to his political agenda.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"wp-image-8084 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/08/shutterstock_138713570-1024x683.jpg\" alt=\"\" width=\"622\" height=\"415\" />Sweden: a recent extraterritoriality exercise in the telecommunications sector</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Finland is not the only Nordic jurisdiction that has recently encountered serious corruption allegations. In Sweden, a local leading telecommunications company and its Uzbek subsidiary admitted paying (on multiple occasions between 2007 and 2010) more than USD 331 million in bribes to an Uzbek government official, who was a close relative of a high-ranking government official and had influence over the Uzbek governmental body that regulated the telecommunications industry. The telecommunications operator, which used to be a listed company in New York, used US bank accounts to move the bribery related assets, which triggered the involvement of the US authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In 2017, the company reached a settlement involving the anti-corruption authorities of the United States, the Netherlands and Sweden. In the United States, the company entered a deferred prosecution agreement agreeing to pay the fine, implement rigorous internal controls and cooperate fully with the Department’s ongoing investigation, including its investigation of individuals. The U.S. authorities agreed to credit any disgorged profits paid to the Swedish and Dutch authorities as a result of related national proceedings in Sweden and in the Netherlands.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition to the criminal proceedings faced by the company, the individual directors involved are now being prosecuted in Sweden for bribery. According to the prosecutor, the company paid the authorities to make a preferred decision when considering its operational licenses in Uzbekistan and the prosecuted directors in question were aware of the bribery or even took initiative in the matter.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>The loopholes relating to gifts and hospitality in the Middle East</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">In Europe and in the United States, there is a common trend of companies becoming extremely cautious when it comes to hospitality and gifts, including business to business relationships. Public officials aside, one of the most common corruption related issues that businesses often struggle with is to understand where to draw the line between illegitimate and legitimate, or sometimes even expected, provision of business gifts and hospitality in the Middle East.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">There are different legislative approaches to private sector bribery in the Middle East. For example, the UAE has explicitly criminalised bribery in business in Article 236 bis of the Federal Law No. 3 of 1987 as amended by the Federal Decree Law No. 7 of 2016 (\"UAE Penal Code\"). Another example can be found in Qatar where passive bribery i.e. accepting illegitimate benefits in the private sector has been criminalised in Article 146 of the Law Number 11 of 2004 (\"Qatar Penal Code\")..</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In light of the above, and importantly for companies doing business in the Middle East, it is highly recommended to adopt restrictive hospitality policies in order to avoid bribery risks in relation to both the public and the private sector. It should be noted that the anti-bribery laws in the Middle East do not usually include exceptions when it comes to gifts of only nominal value, if the corrupt intent can be proven. Also, the definition of a public official tends to be relatively broad resulting e.g. employees of many companies subject to (partial) government ownership being regarded as public officials.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"alignleft size-large wp-image-8083\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/08/20-1024x683.jpg\" alt=\"\" width=\"640\" height=\"427\" />Key take home for global businesses: global vigilance</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The above examples indicate that regardless of the jurisdiction - whether the Middle East, the high ranking Nordic countries or elsewhere in the world, no business is entirely safe from corruption related risks. International rankings aside, businesses should pay attention to corruption risks and implement strict compliance policies. As demonstrated above, there is no safe-harbour when it comes to corruption risk management.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Adopting an anti-bribery policy is always advisable irrespective of whether the law so obliges. The policy should be embedded in the business procedures of the company, accompanied by quality training of the personnel at regular intervals to identify and avoid compliance risks.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Similarly to compliance policies, legislators have adopted different approaches to whistleblowing regulations. Businesses should not hesitate to go beyond the statutory requirements and implement independent whistleblowing channels to help foster a compliance culture in their organisations.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is important to note that bribery is only one aspect of corruption. As demonstrated above, corruption can take many forms. Detecting and avoiding conflicts of interest in business operations can work against presuming corrupt intent, due to which businesses are advised to include relevant provisions on excluding conflicted employees from decision making in order to manage corruption risks. Even though the examples set out above include significant intentional bribery, in many jurisdictions bribery offences are criminalised even if the offence is not intentionally committed.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition to local laws and local law enforcement, the extraterritorial effect of certain foreign anti-corruption laws should be observed. For example, US Foreign Corrupt Practices Act (\"FCPA\") is widely known to be enforced also in respect of corruption offences taking place outside the United States. Transacting in US Dollars or employing US citizens may trigger the application of the FCPA and enforcement thereof by US authorities irrespective of the location of the business or any potential bribery activity, including in the Middle East. Businesses are recommended to adopt anti-corruption policies and accounting standards that meet the requirements of all the statutes potentially applicable to their operations. It seems that national authorities are working closely together to resolve cross-border bribery matters making it more difficult for the offenders to escape the jurisdiction of national authorities in an international context.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It seems that the Nordics can no longer take their high ranking in the Transparency International Corruption Perceptions Index for granted. This is partly due not only to international watchdogs, but also legislators and law enforcement authorities realising that the roots of corruption are embedded in conflict of interest which is a prevalent issue in the Nordic countries. At the same time, other countries are also working hard towards efficient enforcement of anti-corruption laws which makes competition at the top level fiercer than ever.</p>\r\nAs Transparency International and intergovernmental bodies, such as the United Nations, do not solely consider the content of laws and enforcement statistics, making general changes in improving transparency and integrity in the public sector may also yield a positive effect on anti-corruption. Importantly for businesses, it should be noted that bribery is widely criminalised in the Middle East and bribery laws actively enforced. The efforts made by the governments in the Middle East are gradually being recognised in the international domain.|<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignleft size-full wp-image-8015\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/19.jpg\" alt=\"\" width=\"4573\" height=\"1322\" /></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Combating corruption is a hot topic across the globe. Scoring on top of international rankings, the Nordic countries (being Denmark, Norway, Sweden, Finland and Iceland) have traditionally been regarded as the global frontrunners when it comes to anti-corruption. In the Middle East, governments are working hard to decrease bribery and increase transparency in society, which ultimately complements the general promotion of civil rights. Research indicates that free speech, independent media, political dissent and an open and engaged civil society, access to information and the non-existence of censorship are the core elements preventing corruption.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The author previously practised law in Finland, advising Finnish and Scandinavian clients, before locating to the UAE. In this article I seek to provide comparative insights on the topic of anti-corruption practices between the Middle East and the Nordic countries, in light of current developments.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>From global harmonisation of laws to local enforcement</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Combating corruption on a global level is subject to several international treaties, the provisions of which are then transposed to national laws, harmonising the content thereof. The most important international treaties in this regard are the United Nations Convention Against Corruption of 2003 and the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions of 1997. In Europe, an intergovernmental body called the Group of States against Corruption (GRECO) was established in 1999 by the Council of Europe to monitor its Member States’ compliance with the organisation’s anti-corruption standards.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The intention of international treaties is to establish common worldwide legislative standards for anti-corruption laws through imposing obligations on the Member States to bring their legislation in line with the obligations of the treaties. As a result, the laws of different Member States should include similar provisions criminalising the different forms of bribery, which provisions are locally enforced by national authorities. Despite these developments, it goes without saying that the national anti-corruption laws are far from being harmonised and different geographic regions face different corruption related challenges.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Corruption Perceptions</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Transparency International is a non-governmental watchdog promoting anti-corruption in the world. It publishes an annual Corruption Perception Index, ranking 180 countries and territories by their perceived levels of public sector corruption, predicated on information provided by experts and businesspeople.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Middle East consists of a variety of jurisdictions, many of which are far from homogenous. While some of the countries are still subject to weaker public institutions due to, e.g.; internal conflict, a number of countries in the Middle East, such as Jordan and Lebanon, are taking positive steps towards fighting corruption and increasing transparency and integrity in their societies. The hard work conducted by local governments in the Middle East is gradually attracting the attention of the rest of the world.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This year, the United Arab Emirates (\"UAE\") ranked higher on the index than ever before. The UAE reached the 21st position in the ranking being the frontrunner of the Middle East. According to Transparency International, this may be due to good and efficient management of public finances, improved public procurement and better access to public services and infrastructure in the UAE. In 2016, the UAE carried out a significant reform of its criminal laws, which may be reflected in the Index as well.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Nordic countries usually score highest in international anti-corruption rankings. According to the latest Corruption Perceptions Index, Denmark was ranked the 2nd least corrupt country in the world, after New Zealand. Finland and Norway shared 3rd spot and Sweden ranked 6th. Iceland, holding 13th position, appears to be an outlier among Nordic countries.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Considering the rankings, one may ask whether Nordic countries are perhaps a safe-harbour from corruption. Despite the apparently excellent reputation, do corruption related risks still exist for businesses in the Nordics? Are the Nordic Countries the complete opposite to the Middle East?</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Finland: There is a snake in paradise</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Despite direct bribery being relatively rare in Finland and the rest of the Nordic jurisdictions, the existence of conflicts of interest and the lack of transparency in declaring conflicts of interest have turned out to be a common feature of the Nordic countries. This may be difficult to detect considering it is an inherently subjective evaluation. I suggest corruption does exist in Nordic countries, but that it has taken forms that are relatively difficult to detect by researchers.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In the aftermath of its evaluation round in September 2017, GRECO issued recommendations to Finland aimed at improving its anti-corruption regime, such recommendations being published in March 2018. Six of the recommendations issued by GRECO concerned senior government officials and ministers, and eight of them law enforcement authorities. Regarding law enforcement agencies, GRECO recommends that the Police and the Border Guard develop a dedicated anti-corruption strategy or policy, compile a code of conduct and specify their guidelines for secondary employment, organise training on the prevention and combating of corruption, and reinforce ethical practices in their career-related processes. In addition, it is recommended that the police enhance their risk management, internal oversight, and procedures to be followed by their officials when taking up secondary employment.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">When it comes to whistleblower protection, GRECO recommends that the Police and the Border Guard be obliged to report suspicions of corruption and that protection of the whistleblowers be enhanced. At the moment, Finnish law does not include all-encompassing provisions protecting whistleblowers, applicable across different industries and, as a result, whistleblowers are practically protected only by the provisions in the Employment Act regulating grounds for dismissal. When it comes to the GRECO anti-corruption recommendations with regards to judges, public prosecutors and Members of Parliament, the Finnish Ministry of Justice announced in May 2018 that it has duly implemented all the recommendations. Also, the current Minister of Labour is strongly promoting enhancing whistleblower protection in Finland according to his political agenda.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"wp-image-8084 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/08/shutterstock_138713570-1024x683.jpg\" alt=\"\" width=\"570\" height=\"380\" />Sweden: a recent extraterritoriality exercise in the telecommunications sector</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Finland is not the only Nordic jurisdiction that has recently encountered serious corruption allegations. In Sweden, a local leading telecommunications company and its Uzbek subsidiary admitted paying (on multiple occasions between 2007 and 2010) more than USD 331 million in bribes to an Uzbek government official, who was a close relative of a high-ranking government official and had influence over the Uzbek governmental body that regulated the telecommunications industry. The telecommunications operator, which used to be a listed company in New York, used US bank accounts to move the bribery related assets, which triggered the involvement of the US authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In 2017, the company reached a settlement involving the anti-corruption authorities of the United States, the Netherlands and Sweden. In the United States, the company entered a deferred prosecution agreement agreeing to pay the fine, implement rigorous internal controls and cooperate fully with the Department’s ongoing investigation, including its investigation of individuals. The U.S. authorities agreed to credit any disgorged profits paid to the Swedish and Dutch authorities as a result of related national proceedings in Sweden and in the Netherlands.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition to the criminal proceedings faced by the company, the individual directors involved are now being prosecuted in Sweden for bribery. According to the prosecutor, the company paid the authorities to make a preferred decision when considering its operational licenses in Uzbekistan and the prosecuted directors in question were aware of the bribery or even took initiative in the matter.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>The loopholes relating to gifts and hospitality in the Middle East</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">In Europe and in the United States, there is a common trend of companies becoming extremely cautious when it comes to hospitality and gifts, including business to business relationships. Public officials aside, one of the most common corruption related issues that businesses often struggle with is to understand where to draw the line between illegitimate and legitimate, or sometimes even expected, provision of business gifts and hospitality in the Middle East.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">There are different legislative approaches to private sector bribery in the Middle East. For example, the UAE has explicitly criminalised bribery in business in Article 236 bis of the Federal Law No. 3 of 1987 as amended by the Federal Decree Law No. 7 of 2016 (\"UAE Penal Code\"). Another example can be found in Qatar where passive bribery i.e. accepting illegitimate benefits in the private sector has been criminalised in Article 146 of the Law Number 11 of 2004 (\"Qatar Penal Code\")..</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In light of the above, and importantly for companies doing business in the Middle East, it is highly recommended to adopt restrictive hospitality policies in order to avoid bribery risks in relation to both the public and the private sector. It should be noted that the anti-bribery laws in the Middle East do not usually include exceptions when it comes to gifts of only nominal value, if the corrupt intent can be proven. Also, the definition of a public official tends to be relatively broad resulting e.g. employees of many companies subject to (partial) government ownership being regarded as public officials.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"alignleft size-large wp-image-8083\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/08/20-1024x683.jpg\" alt=\"\" width=\"640\" height=\"427\" />Key take home for global businesses: global vigilance</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The above examples indicate that regardless of the jurisdiction - whether the Middle East, the high ranking Nordic countries or elsewhere in the world, no business is entirely safe from corruption related risks. International rankings aside, businesses should pay attention to corruption risks and implement strict compliance policies. As demonstrated above, there is no safe-harbour when it comes to corruption risk management.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Adopting an anti-bribery policy is always advisable irrespective of whether the law so obliges. The policy should be embedded in the business procedures of the company, accompanied by quality training of the personnel at regular intervals to identify and avoid compliance risks.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Similarly to compliance policies, legislators have adopted different approaches to whistleblowing regulations. Businesses should not hesitate to go beyond the statutory requirements and implement independent whistleblowing channels to help foster a compliance culture in their organisations.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is important to note that bribery is only one aspect of corruption. As demonstrated above, corruption can take many forms. Detecting and avoiding conflicts of interest in business operations can work against presuming corrupt intent, due to which businesses are advised to include relevant provisions on excluding conflicted employees from decision making in order to manage corruption risks. Even though the examples set out above include significant intentional bribery, in many jurisdictions bribery offences are criminalised even if the offence is not intentionally committed.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition to local laws and local law enforcement, the extraterritorial effect of certain foreign anti-corruption laws should be observed. For example, US Foreign Corrupt Practices Act (\"FCPA\") is widely known to be enforced also in respect of corruption offences taking place outside the United States. Transacting in US Dollars or employing US citizens may trigger the application of the FCPA and enforcement thereof by US authorities irrespective of the location of the business or any potential bribery activity, including in the Middle East. Businesses are recommended to adopt anti-corruption policies and accounting standards that meet the requirements of all the statutes potentially applicable to their operations. It seems that national authorities are working closely together to resolve cross-border bribery matters making it more difficult for the offenders to escape the jurisdiction of national authorities in an international context.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It seems that the Nordics can no longer take their high ranking in the Transparency International Corruption Perceptions Index for granted. This is partly due not only to international watchdogs, but also legislators and law enforcement authorities realising that the roots of corruption are embedded in conflict of interest which is a prevalent issue in the Nordic countries. At the same time, other countries are also working hard towards efficient enforcement of anti-corruption laws which makes competition at the top level fiercer than ever.</p>\r\nAs Transparency International and intergovernmental bodies, such as the United Nations, do not solely consider the content of laws and enforcement statistics, making general changes in improving transparency and integrity in the public sector may also yield a positive effect on anti-corruption. Importantly for businesses, it should be noted that bribery is widely criminalised in the Middle East and bribery laws actively enforced. The efforts made by the governments in the Middle East are gradually being recognised in the international domain.'),
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	(265724,25708,'PostTitle','Getting to Grips with VAT Implementation'),
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	(265727,25708,'PostDate','2018-08-01 07:40:24'),
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	(265731,25708,'MetaValueNew','<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8016 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/21-379x1024.jpg\" alt=\"\" width=\"305\" height=\"824\" />The introduction of VAT in the UAE at the start of 2018, was a major change for businesses, Shiraz Khan of Al Tamimi &amp; Company looks back on how they should have tackled the implementation phase and what their priorities should be going forward.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The UAE’s VAT system is broadly based on common prin-ciples that have been agreed by all GCC countries in the Uniﬁed GCC VAT Agreement. These include certain ar-eas which all the individual GCC countries are required to follow. For example, the mandatory and voluntary registration thresholds were set by the GCC VAT Agreement. The standard VAT rate of 5% was also ﬁxed by the GCC VAT Agreement across the GCC. However, individual GCC countries do have some freedom to determine the application of VAT on some matters such as the VAT treatment of certain sectors and industries.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>UAE Legislation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">UAE VAT legislation is made up of Federal Decree Law No. 8/2017 on VAT (the VAT Law) and Cabinet Decision No. 52/2017 on the Executive Regulations to the VAT Law (VAT Executive Regula-tions). The Federal Decree-Law No. 8/2017, which was published in August 2017, sets out the UAE VAT rules. The Executive Regula-tions which were issued in November 2017 deal with the detailed application of the VAT Law’s provisions.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition, the Federal Tax Authority (FTA), which was formed under Federal Decree-Law No. 13/ 2016 on the Establishment of the FTA is responsible for the administration, management, collection and enforcement of VAT and all other current and future Federal taxes. At present VAT and excise tax are the only taxes at the Federal level. Federal Law No. 7/2017 for Tax Procedures and Cabinet Decision No. 36/2017 on the Executive Regulations on Tax Procedures are also relevant in this context as they provide a procedural framework that is applied across all Federal Taxes. This includes details and requirements related to tax registra-tion, ﬁling of tax returns and settlement of taxes, tax audits, appeals and penalties as well as FTA and taxpayers’ rights and obligations.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Implementation Challenges</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of VAT was a major change for businesses operating in the UAE. In order to prepare for it, busi-nesses had to complete a number of steps before VAT came into force. These included analysing the impact of VAT on their operations and across many diﬀer-ent functions including Legal, Finance, IT, Human Resources, Procurement, Sales, Marketing and Strategy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Businesses had to review and deter-mine the VAT treatment of all their sales and purchase transactions and understand their resulting compli-ance obligations. In addition, they had to assess the capability of their existing IT system or software to produce auto-matic VAT reporting and consider if an upgrade would be suﬃcient or they would need a whole new system. It was also important for organisa-tions to make changes to their business processes, including invoicing and record keeping so they were compliant with the new VAT legislation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">From a legal perspective, it was necessary to review existing contracts with customers to check if they needed to renegotiate contracts which had no VAT clause in order to avoid bearing any VAT cost. They also had to check that all new contracts dealt with the application of VAT and set out which party was responsible for bearing the VAT liability.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In order to achieve this objective and manage relationships with customers, communication with customers was required. It was also important to communicate with suppliers to ensure they were going to issue VAT compliant invoices which would facilitate the recovery of VAT. Finally, businesses had to evaluate the cash ﬂow implications and their working capital requirements as a result of now having to pay VAT before they received payments from customers.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">All in all, a signiﬁcant amount of work had to be undertaken by businesses to be ready for VAT. In other jurisdictions such as Malaysia when a similar goods or services tax (known as GST) was implemented, companies there typically needed around six to 18 months to prepare for the change depending on the size and complexity of their operations and transactions.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Preparation Time</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Although some of the large multinational groups in the UAE began their preparations in 2016 or in the beginning of 2017, many busi-nesses in the UAE took a reactive approach instead and decided to wait until the publication of the complete VAT legislation in November before taking any action. There was also an expectation or possibly a hope in the UAE business community that the imple-mentation of VAT would be delayed by the UAE Government based on previous experience in the UAE. (Although, this was despite an indication from the FTA in early 2017 that VAT would be imple-mented on 1 January 2018 and the fact the VAT Law also conﬁrmed that VAT would be implemented by this date when it was published in August 2017.)</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In hindsight, once the UAE Government had taken a decision to implement VAT on 1 January 2018 and this fact was conﬁrmed by the VAT law, businesses could have done more and been more proactive with their VAT preparations. VAT is not a new tax and it or a similar tax exists in more than 160 other countries around the globe. In addition, the UAE VAT law is is largely based on the EU VAT rules and Malaysian GST system. In addition, the GCC VAT Agreement on which UAE VAT legislation was based was also published in the ﬁrst half of 2017. So as far as the UAE is concerned, although the ﬁnal VAT Executive Regulations were not published until November 2017, most of the information in these regulations had already been made available by the FTA earlier in the year as part of an awareness campaign. So, a signiﬁcant amount of information was already available in the public domain even before the VAT Executive Regulations were published and it was suﬃcient to enable businesses to begin their preparations. In fact, most of the information in the VAT Executive Regulations was already known before these Regulations were issued. It would have been better for businesses to begin preparation before the VAT Executive Regulations were issued based on the known information at that time and then validate any assumptions or conﬁrm positions after the regulations were issued in November 2017. Unfortunately, in the UAE, many businesses took the wrong approach and instead waited for the regulations before even beginning this work which meant they only had one month to get ready. A few businesses were even taken by surprise by the introduction of VAT despite the fact the FTA, tax advisers and the local and business press had conducted an awareness campaign throughout 2017.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>The Role of the Federal Tax Authority</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Many businesses operating in the UAE appear to have misun-derstood the role of the FTA. The FTA is a new tax authority, the legislation establishing it was published towards the end of 2016 and it only began recruiting staﬀ in the middle of 2017.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">As with any tax authority in mature tax jurisdictions, the FTA’s primary role is to administer, collect and enforce Federal taxes and apply procedures which are related to these taxes. Although it will issue technical guidance to the public on tax matters, like any tax authority, it is not responsible for advising businesses on their tax obligations or on the VAT implications of their transac-tions. Unfortunately, a number of businesses have not understood what the responsiblities of the FTA are and are currently trying to contact the FTA helpline or meet FTA representatives to obtain tax advice, although this is not part of their role. Like many tax authorities in other countries, the FTA, particularly as it is a new body, has very limited resources. With over 300,000 businesses now registered for VAT in the UAE, clearly it is not possible for the FTA to engage directly with all of them and provide tax advice particularly as this is not a part of their remit. As is the case in all other tax jurisdictions, businesses should seek tax advice from a reputable professional services ﬁrm rather than tax authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The FTA have conducted a country-wide campaign to increase awareness, through a series of seminars on VAT introduction in 2017. Given their limited resources, the scale of this campaign has been impressive and is unprecedented even by the standards of more mature tax jurisdictions. Although, some businesses may disagree, it was never realistic to expect a new tax authority like the FTA to personally visit every registered business just to tell them VAT was being introduced. The onus was also on these busi-nesses to speak to advisers and read the many articles which have been published in newspapers and business magazines on the subject.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Interpretation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is easy to mistakenly assume that since the VAT legislation has been issued now, its interpretation will be straightforward and the VAT treatment of all transactions will be clear. In many countries where VAT has been in place for some time, guidance tends to be sought from the published practice of the tax authority in the form of public notices and circulars. Case law precedent is also relied on to check how the courts have decided cases with similar facts in the past. In such countries, VAT law continues to evolve and even decades after its implementation uncertainty remains, as such, the tax authorities in these countries continue to be involved in disputes with businesses, new cases on complex VAT issues continue to be heard by the courts and new schemes are introduced to take into account unique circumstances and industry speciﬁc issues. Similar developments can be expected in the UAE as the UAE VAT legisla-tion has only been eﬀective for just over three months and there is currently no case law from which guidance can be obtained. It will also take time for the FTA’s practice to develop as they audit businesses’ VAT returns and encounter diﬀerent situations. In the future, the FTA will no doubt make further guidance available and new schemes may be announced to take account of diﬀerent industries issues. Any disputes with the FTA will be subject to a three-tier appeal system. Businesses who have a dispute with the FTA, will have the right to ask them to reconsider their decision, and the matter will then be referred to another inspector. An objec-tion against the FTA’s reconsideration decision may then be made to an independent tax disputes resolution committee made up of a judge and two tax experts. Appeals may be made against that committee’s decision to a competent court.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>What should businesses do now?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">As VAT has been implemented and ﬁling deadlines are approach-ing, the focus for businesses has shifted from VAT implementa-tion to the preparation of their ﬁrst VAT return. Companies are currently trying to identify and conﬁrm the VAT treatment of their transactions so they are able to ﬁle a complete and correct tax return. The completion of the tax return may seem a simple, straightforward task, but the department (and in some cases the individual) within the organisation who ﬁles the return on behalf of the business will be held responsible for the tax positions taken in that return regardless of whether the compliance work was outsourced. The relevant department will usually be the tax department, but it could be the legal or ﬁnance department. Given VAT is a new law, there may be uncertainty on many technical posi-tions which could create risk and this has to be taken seriously as penalties for non-compliance, including incorrect tax returns, could be as high as 300% of the tax amount due. Therefore the person responsible for this area must proactively manage this risk by obtaining professional tax advice from a reputable ﬁrm if there are uncertainties and should also document this advice for internal risk management. Going forward, it will be a challenge for FTA, tax advisers and businesses to interpret and apply the provisions of the new VAT legislation. Although VAT will involve a compliance cost for businesses, given the potential risks and penalties, it is important when ever there is uncertainty, busi-nesses work with a trusted tax adviser and navigate logically through any areas of doubt.</p>\r\n <em>For further information please contact Shiraz Khan, (s.khan@tamimi.com).</em>'),
	(265732,25708,'MetaValueOld','<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8016 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/21-379x1024.jpg\" alt=\"\" width=\"305\" height=\"824\" />The introduction of VAT in the UAE at the start of 2018, was a major change for businesses, Shiraz Khan of Al Tamimi &amp; Company looks back on how they should have tackled the implementation phase and what their priorities should be going forward.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The UAE’s VAT system is broadly based on common prin-ciples that have been agreed by all GCC countries in the Uniﬁed GCC VAT Agreement. These include certain ar-eas which all the individual GCC countries are required to follow. For example, the mandatory and voluntary registration thresholds were set by the GCC VAT Agreement. The standard VAT rate of 5% was also ﬁxed by the GCC VAT Agreement across the GCC. However, individual GCC countries do have some freedom to determine the application of VAT on some matters such as the VAT treatment of certain sectors and industries.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>UAE Legislation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">UAE VAT legislation is made up of Federal Decree Law No. 8/2017 on VAT (the VAT Law) and Cabinet Decision No. 52/2017 on the Executive Regulations to the VAT Law (VAT Executive Regula-tions). The Federal Decree-Law No. 8/2017, which was published in August 2017, sets out the UAE VAT rules. The Executive Regula-tions which were issued in November 2017 deal with the detailed application of the VAT Law’s provisions.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition, the Federal Tax Authority (FTA), which was formed under Federal Decree-Law No. 13/ 2016 on the Establishment of the FTA is responsible for the administration, management, collection and enforcement of VAT and all other current and future Federal taxes. At present VAT and excise tax are the only taxes at the Federal level. Federal Law No. 7/2017 for Tax Procedures and Cabinet Decision No. 36/2017 on the Executive Regulations on Tax Procedures are also relevant in this context as they provide a procedural framework that is applied across all Federal Taxes. This includes details and requirements related to tax registra-tion, ﬁling of tax returns and settlement of taxes, tax audits, appeals and penalties as well as FTA and taxpayers’ rights and obligations.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Implementation Challenges</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of VAT was a major change for businesses operating in the UAE. In order to prepare for it, busi-nesses had to complete a number of steps before VAT came into force. These included analysing the impact of VAT on their operations and across many diﬀer-ent functions including Legal, Finance, IT, Human Resources, Procurement, Sales, Marketing and Strategy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Businesses had to review and deter-mine the VAT treatment of all their sales and purchase transactions and understand their resulting compli-ance obligations. In addition, they had to assess the capability of their existing IT system or software to produce auto-matic VAT reporting and consider if an upgrade would be suﬃcient or they would need a whole new system. It was also important for organisa-tions to make changes to their business processes, including invoicing and record keeping so they were compliant with the new VAT legislation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">From a legal perspective, it was necessary to review existing contracts with customers to check if they needed to renegotiate contracts which had no VAT clause in order to avoid bearing any VAT cost. They also had to check that all new contracts dealt with the application of VAT and set out which party was responsible for bearing the VAT liability.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In order to achieve this objective and manage relationships with customers, communication with customers was required. It was also important to communicate with suppliers to ensure they were going to issue VAT compliant invoices which would facilitate the recovery of VAT. Finally, businesses had to evaluate the cash ﬂow implications and their working capital requirements as a result of now having to pay VAT before they received payments from customers.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">All in all, a signiﬁcant amount of work had to be undertaken by businesses to be ready for VAT. In other jurisdictions such as Malaysia when a similar goods or services tax (known as GST) was implemented, companies there typically needed around six to 18 months to prepare for the change depending on the size and complexity of their operations and transactions.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Preparation Time</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Although some of the large multinational groups in the UAE began their preparations in 2016 or in the beginning of 2017, many busi-nesses in the UAE took a reactive approach instead and decided to wait until the publication of the complete VAT legislation in November before taking any action. There was also an expectation or possibly a hope in the UAE business community that the imple-mentation of VAT would be delayed by the UAE Government based on previous experience in the UAE. (Although, this was despite an indication from the FTA in early 2017 that VAT would be imple-mented on 1 January 2018 and the fact the VAT Law also conﬁrmed that VAT would be implemented by this date when it was published in August 2017.)</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In hindsight, once the UAE Government had taken a decision to implement VAT on 1 January 2018 and this fact was conﬁrmed by the VAT law, businesses could have done more and been more proactive with their VAT preparations. VAT is not a new tax and it or a similar tax exists in more than 160 other countries around the globe. In addition, the UAE VAT law is is largely based on the EU VAT rules and Malaysian GST system. In addition, the GCC VAT Agreement on which UAE VAT legislation was based was also published in the ﬁrst half of 2017. So as far as the UAE is concerned, although the ﬁnal VAT Executive Regulations were not published until November 2017, most of the information in these regulations had already been made available by the FTA earlier in the year as part of an awareness campaign. So, a signiﬁcant amount of information was already available in the public domain even before the VAT Executive Regulations were published and it was suﬃcient to enable businesses to begin their preparations. In fact, most of the information in the VAT Executive Regulations was already known before these Regulations were issued. It would have been better for businesses to begin preparation before the VAT Executive Regulations were issued based on the known information at that time and then validate any assumptions or conﬁrm positions after the regulations were issued in November 2017. Unfortunately, in the UAE, many businesses took the wrong approach and instead waited for the regulations before even beginning this work which meant they only had one month to get ready. A few businesses were even taken by surprise by the introduction of VAT despite the fact the FTA, tax advisers and the local and business press had conducted an awareness campaign throughout 2017.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>The Role of the Federal Tax Authority</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Many businesses operating in the UAE appear to have misun-derstood the role of the FTA. The FTA is a new tax authority, the legislation establishing it was published towards the end of 2016 and it only began recruiting staﬀ in the middle of 2017.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">As with any tax authority in mature tax jurisdictions, the FTA’s primary role is to administer, collect and enforce Federal taxes and apply procedures which are related to these taxes. Although it will issue technical guidance to the public on tax matters, like any tax authority, it is not responsible for advising businesses on their tax obligations or on the VAT implications of their transac-tions. Unfortunately, a number of businesses have not understood what the responsiblities of the FTA are and are currently trying to contact the FTA helpline or meet FTA representatives to obtain tax advice, although this is not part of their role. Like many tax authorities in other countries, the FTA, particularly as it is a new body, has very limited resources. With over 300,000 businesses now registered for VAT in the UAE, clearly it is not possible for the FTA to engage directly with all of them and provide tax advice particularly as this is not a part of their remit. As is the case in all other tax jurisdictions, businesses should seek tax advice from a reputable professional services ﬁrm rather than tax authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The FTA have conducted a country-wide campaign to increase awareness, through a series of seminars on VAT introduction in 2017. Given their limited resources, the scale of this campaign has been impressive and is unprecedented even by the standards of more mature tax jurisdictions. Although, some businesses may disagree, it was never realistic to expect a new tax authority like the FTA to personally visit every registered business just to tell them VAT was being introduced. The onus was also on these busi-nesses to speak to advisers and read the many articles which have been published in newspapers and business magazines on the subject.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Interpretation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is easy to mistakenly assume that since the VAT legislation has been issued now, its interpretation will be straightforward and the VAT treatment of all transactions will be clear. In many countries where VAT has been in place for some time, guidance tends to be sought from the published practice of the tax authority in the form of public notices and circulars. Case law precedent is also relied on to check how the courts have decided cases with similar facts in the past. In such countries, VAT law continues to evolve and even decades after its implementation uncertainty remains, as such, the tax authorities in these countries continue to be involved in disputes with businesses, new cases on complex VAT issues continue to be heard by the courts and new schemes are introduced to take into account unique circumstances and industry speciﬁc issues. Similar developments can be expected in the UAE as the UAE VAT legisla-tion has only been eﬀective for just over three months and there is currently no case law from which guidance can be obtained. It will also take time for the FTA’s practice to develop as they audit businesses’ VAT returns and encounter diﬀerent situations. In the future, the FTA will no doubt make further guidance available and new schemes may be announced to take account of diﬀerent industries issues. Any disputes with the FTA will be subject to a three-tier appeal system. Businesses who have a dispute with the FTA, will have the right to ask them to reconsider their decision, and the matter will then be referred to another inspector. An objec-tion against the FTA’s reconsideration decision may then be made to an independent tax disputes resolution committee made up of a judge and two tax experts. Appeals may be made against that committee’s decision to a competent court.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>What should businesses do now?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">As VAT has been implemented and ﬁling deadlines are approach-ing, the focus for businesses has shifted from VAT implementa-tion to the preparation of their ﬁrst VAT return. Companies are currently trying to identify and conﬁrm the VAT treatment of their transactions so they are able to ﬁle a complete and correct tax return. The completion of the tax return may seem a simple, straightforward task, but the department (and in some cases the individual) within the organisation who ﬁles the return on behalf of the business will be held responsible for the tax positions taken in that return regardless of whether the compliance work was outsourced. The relevant department will usually be the tax department, but it could be the legal or ﬁnance department. Given VAT is a new law, there may be uncertainty on many technical posi-tions which could create risk and this has to be taken seriously as penalties for non-compliance, including incorrect tax returns, could be as high as 300% of the tax amount due. Therefore the person responsible for this area must proactively manage this risk by obtaining professional tax advice from a reputable ﬁrm if there are uncertainties and should also document this advice for internal risk management. Going forward, it will be a challenge for FTA, tax advisers and businesses to interpret and apply the provisions of the new VAT legislation. Although VAT will involve a compliance cost for businesses, given the potential risks and penalties, it is important when ever there is uncertainty, busi-nesses work with a trusted tax adviser and navigate logically through any areas of doubt.</p>\r\nFor further information please contact Shiraz Khan, (s.khan@tamimi.com).'),
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	(265735,25708,'ReportText','<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8016 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/21-379x1024.jpg\" alt=\"\" width=\"305\" height=\"824\" />The introduction of VAT in the UAE at the start of 2018, was a major change for businesses, Shiraz Khan of Al Tamimi &amp; Company looks back on how they should have tackled the implementation phase and what their priorities should be going forward.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The UAE’s VAT system is broadly based on common prin-ciples that have been agreed by all GCC countries in the Uniﬁed GCC VAT Agreement. These include certain ar-eas which all the individual GCC countries are required to follow. For example, the mandatory and voluntary registration thresholds were set by the GCC VAT Agreement. The standard VAT rate of 5% was also ﬁxed by the GCC VAT Agreement across the GCC. However, individual GCC countries do have some freedom to determine the application of VAT on some matters such as the VAT treatment of certain sectors and industries.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>UAE Legislation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">UAE VAT legislation is made up of Federal Decree Law No. 8/2017 on VAT (the VAT Law) and Cabinet Decision No. 52/2017 on the Executive Regulations to the VAT Law (VAT Executive Regula-tions). The Federal Decree-Law No. 8/2017, which was published in August 2017, sets out the UAE VAT rules. The Executive Regula-tions which were issued in November 2017 deal with the detailed application of the VAT Law’s provisions.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition, the Federal Tax Authority (FTA), which was formed under Federal Decree-Law No. 13/ 2016 on the Establishment of the FTA is responsible for the administration, management, collection and enforcement of VAT and all other current and future Federal taxes. At present VAT and excise tax are the only taxes at the Federal level. Federal Law No. 7/2017 for Tax Procedures and Cabinet Decision No. 36/2017 on the Executive Regulations on Tax Procedures are also relevant in this context as they provide a procedural framework that is applied across all Federal Taxes. This includes details and requirements related to tax registra-tion, ﬁling of tax returns and settlement of taxes, tax audits, appeals and penalties as well as FTA and taxpayers’ rights and obligations.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Implementation Challenges</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of VAT was a major change for businesses operating in the UAE. In order to prepare for it, busi-nesses had to complete a number of steps before VAT came into force. These included analysing the impact of VAT on their operations and across many diﬀer-ent functions including Legal, Finance, IT, Human Resources, Procurement, Sales, Marketing and Strategy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Businesses had to review and deter-mine the VAT treatment of all their sales and purchase transactions and understand their resulting compli-ance obligations. In addition, they had to assess the capability of their existing IT system or software to produce auto-matic VAT reporting and consider if an upgrade would be suﬃcient or they would need a whole new system. It was also important for organisa-tions to make changes to their business processes, including invoicing and record keeping so they were compliant with the new VAT legislation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">From a legal perspective, it was necessary to review existing contracts with customers to check if they needed to renegotiate contracts which had no VAT clause in order to avoid bearing any VAT cost. They also had to check that all new contracts dealt with the application of VAT and set out which party was responsible for bearing the VAT liability.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In order to achieve this objective and manage relationships with customers, communication with customers was required. It was also important to communicate with suppliers to ensure they were going to issue VAT compliant invoices which would facilitate the recovery of VAT. Finally, businesses had to evaluate the cash ﬂow implications and their working capital requirements as a result of now having to pay VAT before they received payments from customers.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">All in all, a signiﬁcant amount of work had to be undertaken by businesses to be ready for VAT. In other jurisdictions such as Malaysia when a similar goods or services tax (known as GST) was implemented, companies there typically needed around six to 18 months to prepare for the change depending on the size and complexity of their operations and transactions.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Preparation Time</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Although some of the large multinational groups in the UAE began their preparations in 2016 or in the beginning of 2017, many busi-nesses in the UAE took a reactive approach instead and decided to wait until the publication of the complete VAT legislation in November before taking any action. There was also an expectation or possibly a hope in the UAE business community that the imple-mentation of VAT would be delayed by the UAE Government based on previous experience in the UAE. (Although, this was despite an indication from the FTA in early 2017 that VAT would be imple-mented on 1 January 2018 and the fact the VAT Law also conﬁrmed that VAT would be implemented by this date when it was published in August 2017.)</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In hindsight, once the UAE Government had taken a decision to implement VAT on 1 January 2018 and this fact was conﬁrmed by the VAT law, businesses could have done more and been more proactive with their VAT preparations. VAT is not a new tax and it or a similar tax exists in more than 160 other countries around the globe. In addition, the UAE VAT law is is largely based on the EU VAT rules and Malaysian GST system. In addition, the GCC VAT Agreement on which UAE VAT legislation was based was also published in the ﬁrst half of 2017. So as far as the UAE is concerned, although the ﬁnal VAT Executive Regulations were not published until November 2017, most of the information in these regulations had already been made available by the FTA earlier in the year as part of an awareness campaign. So, a signiﬁcant amount of information was already available in the public domain even before the VAT Executive Regulations were published and it was suﬃcient to enable businesses to begin their preparations. In fact, most of the information in the VAT Executive Regulations was already known before these Regulations were issued. It would have been better for businesses to begin preparation before the VAT Executive Regulations were issued based on the known information at that time and then validate any assumptions or conﬁrm positions after the regulations were issued in November 2017. Unfortunately, in the UAE, many businesses took the wrong approach and instead waited for the regulations before even beginning this work which meant they only had one month to get ready. A few businesses were even taken by surprise by the introduction of VAT despite the fact the FTA, tax advisers and the local and business press had conducted an awareness campaign throughout 2017.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>The Role of the Federal Tax Authority</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Many businesses operating in the UAE appear to have misun-derstood the role of the FTA. The FTA is a new tax authority, the legislation establishing it was published towards the end of 2016 and it only began recruiting staﬀ in the middle of 2017.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">As with any tax authority in mature tax jurisdictions, the FTA’s primary role is to administer, collect and enforce Federal taxes and apply procedures which are related to these taxes. Although it will issue technical guidance to the public on tax matters, like any tax authority, it is not responsible for advising businesses on their tax obligations or on the VAT implications of their transac-tions. Unfortunately, a number of businesses have not understood what the responsiblities of the FTA are and are currently trying to contact the FTA helpline or meet FTA representatives to obtain tax advice, although this is not part of their role. Like many tax authorities in other countries, the FTA, particularly as it is a new body, has very limited resources. With over 300,000 businesses now registered for VAT in the UAE, clearly it is not possible for the FTA to engage directly with all of them and provide tax advice particularly as this is not a part of their remit. As is the case in all other tax jurisdictions, businesses should seek tax advice from a reputable professional services ﬁrm rather than tax authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The FTA have conducted a country-wide campaign to increase awareness, through a series of seminars on VAT introduction in 2017. Given their limited resources, the scale of this campaign has been impressive and is unprecedented even by the standards of more mature tax jurisdictions. Although, some businesses may disagree, it was never realistic to expect a new tax authority like the FTA to personally visit every registered business just to tell them VAT was being introduced. The onus was also on these busi-nesses to speak to advisers and read the many articles which have been published in newspapers and business magazines on the subject.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Interpretation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is easy to mistakenly assume that since the VAT legislation has been issued now, its interpretation will be straightforward and the VAT treatment of all transactions will be clear. In many countries where VAT has been in place for some time, guidance tends to be sought from the published practice of the tax authority in the form of public notices and circulars. Case law precedent is also relied on to check how the courts have decided cases with similar facts in the past. In such countries, VAT law continues to evolve and even decades after its implementation uncertainty remains, as such, the tax authorities in these countries continue to be involved in disputes with businesses, new cases on complex VAT issues continue to be heard by the courts and new schemes are introduced to take into account unique circumstances and industry speciﬁc issues. Similar developments can be expected in the UAE as the UAE VAT legisla-tion has only been eﬀective for just over three months and there is currently no case law from which guidance can be obtained. It will also take time for the FTA’s practice to develop as they audit businesses’ VAT returns and encounter diﬀerent situations. In the future, the FTA will no doubt make further guidance available and new schemes may be announced to take account of diﬀerent industries issues. Any disputes with the FTA will be subject to a three-tier appeal system. Businesses who have a dispute with the FTA, will have the right to ask them to reconsider their decision, and the matter will then be referred to another inspector. An objec-tion against the FTA’s reconsideration decision may then be made to an independent tax disputes resolution committee made up of a judge and two tax experts. Appeals may be made against that committee’s decision to a competent court.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>What should businesses do now?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">As VAT has been implemented and ﬁling deadlines are approach-ing, the focus for businesses has shifted from VAT implementa-tion to the preparation of their ﬁrst VAT return. Companies are currently trying to identify and conﬁrm the VAT treatment of their transactions so they are able to ﬁle a complete and correct tax return. The completion of the tax return may seem a simple, straightforward task, but the department (and in some cases the individual) within the organisation who ﬁles the return on behalf of the business will be held responsible for the tax positions taken in that return regardless of whether the compliance work was outsourced. The relevant department will usually be the tax department, but it could be the legal or ﬁnance department. Given VAT is a new law, there may be uncertainty on many technical posi-tions which could create risk and this has to be taken seriously as penalties for non-compliance, including incorrect tax returns, could be as high as 300% of the tax amount due. Therefore the person responsible for this area must proactively manage this risk by obtaining professional tax advice from a reputable ﬁrm if there are uncertainties and should also document this advice for internal risk management. Going forward, it will be a challenge for FTA, tax advisers and businesses to interpret and apply the provisions of the new VAT legislation. Although VAT will involve a compliance cost for businesses, given the potential risks and penalties, it is important when ever there is uncertainty, busi-nesses work with a trusted tax adviser and navigate logically through any areas of doubt.</p>\r\nFor further information please contact Shiraz Khan, (s.khan@tamimi.com).|<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8016 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/21-379x1024.jpg\" alt=\"\" width=\"305\" height=\"824\" />The introduction of VAT in the UAE at the start of 2018, was a major change for businesses, Shiraz Khan of Al Tamimi &amp; Company looks back on how they should have tackled the implementation phase and what their priorities should be going forward.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The UAE’s VAT system is broadly based on common prin-ciples that have been agreed by all GCC countries in the Uniﬁed GCC VAT Agreement. These include certain ar-eas which all the individual GCC countries are required to follow. For example, the mandatory and voluntary registration thresholds were set by the GCC VAT Agreement. The standard VAT rate of 5% was also ﬁxed by the GCC VAT Agreement across the GCC. However, individual GCC countries do have some freedom to determine the application of VAT on some matters such as the VAT treatment of certain sectors and industries.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>UAE Legislation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">UAE VAT legislation is made up of Federal Decree Law No. 8/2017 on VAT (the VAT Law) and Cabinet Decision No. 52/2017 on the Executive Regulations to the VAT Law (VAT Executive Regula-tions). The Federal Decree-Law No. 8/2017, which was published in August 2017, sets out the UAE VAT rules. The Executive Regula-tions which were issued in November 2017 deal with the detailed application of the VAT Law’s provisions.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition, the Federal Tax Authority (FTA), which was formed under Federal Decree-Law No. 13/ 2016 on the Establishment of the FTA is responsible for the administration, management, collection and enforcement of VAT and all other current and future Federal taxes. At present VAT and excise tax are the only taxes at the Federal level. Federal Law No. 7/2017 for Tax Procedures and Cabinet Decision No. 36/2017 on the Executive Regulations on Tax Procedures are also relevant in this context as they provide a procedural framework that is applied across all Federal Taxes. This includes details and requirements related to tax registra-tion, ﬁling of tax returns and settlement of taxes, tax audits, appeals and penalties as well as FTA and taxpayers’ rights and obligations.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Implementation Challenges</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of VAT was a major change for businesses operating in the UAE. In order to prepare for it, busi-nesses had to complete a number of steps before VAT came into force. These included analysing the impact of VAT on their operations and across many diﬀer-ent functions including Legal, Finance, IT, Human Resources, Procurement, Sales, Marketing and Strategy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Businesses had to review and deter-mine the VAT treatment of all their sales and purchase transactions and understand their resulting compli-ance obligations. In addition, they had to assess the capability of their existing IT system or software to produce auto-matic VAT reporting and consider if an upgrade would be suﬃcient or they would need a whole new system. It was also important for organisa-tions to make changes to their business processes, including invoicing and record keeping so they were compliant with the new VAT legislation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">From a legal perspective, it was necessary to review existing contracts with customers to check if they needed to renegotiate contracts which had no VAT clause in order to avoid bearing any VAT cost. They also had to check that all new contracts dealt with the application of VAT and set out which party was responsible for bearing the VAT liability.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In order to achieve this objective and manage relationships with customers, communication with customers was required. It was also important to communicate with suppliers to ensure they were going to issue VAT compliant invoices which would facilitate the recovery of VAT. Finally, businesses had to evaluate the cash ﬂow implications and their working capital requirements as a result of now having to pay VAT before they received payments from customers.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">All in all, a signiﬁcant amount of work had to be undertaken by businesses to be ready for VAT. In other jurisdictions such as Malaysia when a similar goods or services tax (known as GST) was implemented, companies there typically needed around six to 18 months to prepare for the change depending on the size and complexity of their operations and transactions.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Preparation Time</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Although some of the large multinational groups in the UAE began their preparations in 2016 or in the beginning of 2017, many busi-nesses in the UAE took a reactive approach instead and decided to wait until the publication of the complete VAT legislation in November before taking any action. There was also an expectation or possibly a hope in the UAE business community that the imple-mentation of VAT would be delayed by the UAE Government based on previous experience in the UAE. (Although, this was despite an indication from the FTA in early 2017 that VAT would be imple-mented on 1 January 2018 and the fact the VAT Law also conﬁrmed that VAT would be implemented by this date when it was published in August 2017.)</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In hindsight, once the UAE Government had taken a decision to implement VAT on 1 January 2018 and this fact was conﬁrmed by the VAT law, businesses could have done more and been more proactive with their VAT preparations. VAT is not a new tax and it or a similar tax exists in more than 160 other countries around the globe. In addition, the UAE VAT law is is largely based on the EU VAT rules and Malaysian GST system. In addition, the GCC VAT Agreement on which UAE VAT legislation was based was also published in the ﬁrst half of 2017. So as far as the UAE is concerned, although the ﬁnal VAT Executive Regulations were not published until November 2017, most of the information in these regulations had already been made available by the FTA earlier in the year as part of an awareness campaign. So, a signiﬁcant amount of information was already available in the public domain even before the VAT Executive Regulations were published and it was suﬃcient to enable businesses to begin their preparations. In fact, most of the information in the VAT Executive Regulations was already known before these Regulations were issued. It would have been better for businesses to begin preparation before the VAT Executive Regulations were issued based on the known information at that time and then validate any assumptions or conﬁrm positions after the regulations were issued in November 2017. Unfortunately, in the UAE, many businesses took the wrong approach and instead waited for the regulations before even beginning this work which meant they only had one month to get ready. A few businesses were even taken by surprise by the introduction of VAT despite the fact the FTA, tax advisers and the local and business press had conducted an awareness campaign throughout 2017.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>The Role of the Federal Tax Authority</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Many businesses operating in the UAE appear to have misun-derstood the role of the FTA. The FTA is a new tax authority, the legislation establishing it was published towards the end of 2016 and it only began recruiting staﬀ in the middle of 2017.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">As with any tax authority in mature tax jurisdictions, the FTA’s primary role is to administer, collect and enforce Federal taxes and apply procedures which are related to these taxes. Although it will issue technical guidance to the public on tax matters, like any tax authority, it is not responsible for advising businesses on their tax obligations or on the VAT implications of their transac-tions. Unfortunately, a number of businesses have not understood what the responsiblities of the FTA are and are currently trying to contact the FTA helpline or meet FTA representatives to obtain tax advice, although this is not part of their role. Like many tax authorities in other countries, the FTA, particularly as it is a new body, has very limited resources. With over 300,000 businesses now registered for VAT in the UAE, clearly it is not possible for the FTA to engage directly with all of them and provide tax advice particularly as this is not a part of their remit. As is the case in all other tax jurisdictions, businesses should seek tax advice from a reputable professional services ﬁrm rather than tax authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The FTA have conducted a country-wide campaign to increase awareness, through a series of seminars on VAT introduction in 2017. Given their limited resources, the scale of this campaign has been impressive and is unprecedented even by the standards of more mature tax jurisdictions. Although, some businesses may disagree, it was never realistic to expect a new tax authority like the FTA to personally visit every registered business just to tell them VAT was being introduced. The onus was also on these busi-nesses to speak to advisers and read the many articles which have been published in newspapers and business magazines on the subject.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Interpretation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is easy to mistakenly assume that since the VAT legislation has been issued now, its interpretation will be straightforward and the VAT treatment of all transactions will be clear. In many countries where VAT has been in place for some time, guidance tends to be sought from the published practice of the tax authority in the form of public notices and circulars. Case law precedent is also relied on to check how the courts have decided cases with similar facts in the past. In such countries, VAT law continues to evolve and even decades after its implementation uncertainty remains, as such, the tax authorities in these countries continue to be involved in disputes with businesses, new cases on complex VAT issues continue to be heard by the courts and new schemes are introduced to take into account unique circumstances and industry speciﬁc issues. Similar developments can be expected in the UAE as the UAE VAT legisla-tion has only been eﬀective for just over three months and there is currently no case law from which guidance can be obtained. It will also take time for the FTA’s practice to develop as they audit businesses’ VAT returns and encounter diﬀerent situations. In the future, the FTA will no doubt make further guidance available and new schemes may be announced to take account of diﬀerent industries issues. Any disputes with the FTA will be subject to a three-tier appeal system. Businesses who have a dispute with the FTA, will have the right to ask them to reconsider their decision, and the matter will then be referred to another inspector. An objec-tion against the FTA’s reconsideration decision may then be made to an independent tax disputes resolution committee made up of a judge and two tax experts. Appeals may be made against that committee’s decision to a competent court.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>What should businesses do now?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">As VAT has been implemented and ﬁling deadlines are approach-ing, the focus for businesses has shifted from VAT implementa-tion to the preparation of their ﬁrst VAT return. Companies are currently trying to identify and conﬁrm the VAT treatment of their transactions so they are able to ﬁle a complete and correct tax return. The completion of the tax return may seem a simple, straightforward task, but the department (and in some cases the individual) within the organisation who ﬁles the return on behalf of the business will be held responsible for the tax positions taken in that return regardless of whether the compliance work was outsourced. The relevant department will usually be the tax department, but it could be the legal or ﬁnance department. Given VAT is a new law, there may be uncertainty on many technical posi-tions which could create risk and this has to be taken seriously as penalties for non-compliance, including incorrect tax returns, could be as high as 300% of the tax amount due. Therefore the person responsible for this area must proactively manage this risk by obtaining professional tax advice from a reputable ﬁrm if there are uncertainties and should also document this advice for internal risk management. Going forward, it will be a challenge for FTA, tax advisers and businesses to interpret and apply the provisions of the new VAT legislation. Although VAT will involve a compliance cost for businesses, given the potential risks and penalties, it is important when ever there is uncertainty, busi-nesses work with a trusted tax adviser and navigate logically through any areas of doubt.</p>\r\n <em>For further information please contact Shiraz Khan, (s.khan@tamimi.com).</em>'),
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	(265781,25712,'MetaValueNew','<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8016 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/21-379x1024.jpg\" alt=\"\" width=\"305\" height=\"824\" />The introduction of VAT in the UAE at the start of 2018, was a major change for businesses, Shiraz Khan of Al Tamimi &amp; Company looks back on how they should have tackled the implementation phase and what their priorities should be going forward.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The UAE’s VAT system is broadly based on common prin-ciples that have been agreed by all GCC countries in the Uniﬁed GCC VAT Agreement. These include certain ar-eas which all the individual GCC countries are required to follow. For example, the mandatory and voluntary registration thresholds were set by the GCC VAT Agreement. The standard VAT rate of 5% was also ﬁxed by the GCC VAT Agreement across the GCC. However, individual GCC countries do have some freedom to determine the application of VAT on some matters such as the VAT treatment of certain sectors and industries.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>UAE Legislation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">UAE VAT legislation is made up of Federal Decree Law No. 8/2017 on VAT (the VAT Law) and Cabinet Decision No. 52/2017 on the Executive Regulations to the VAT Law (VAT Executive Regula-tions). The Federal Decree-Law No. 8/2017, which was published in August 2017, sets out the UAE VAT rules. The Executive Regula-tions which were issued in November 2017 deal with the detailed application of the VAT Law’s provisions.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition, the Federal Tax Authority (FTA), which was formed under Federal Decree-Law No. 13/ 2016 on the Establishment of the FTA is responsible for the administration, management, collection and enforcement of VAT and all other current and future Federal taxes. At present VAT and excise tax are the only taxes at the Federal level. Federal Law No. 7/2017 for Tax Procedures and Cabinet Decision No. 36/2017 on the Executive Regulations on Tax Procedures are also relevant in this context as they provide a procedural framework that is applied across all Federal Taxes. This includes details and requirements related to tax registra-tion, ﬁling of tax returns and settlement of taxes, tax audits, appeals and penalties as well as FTA and taxpayers’ rights and obligations.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Implementation Challenges</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of VAT was a major change for businesses operating in the UAE. In order to prepare for it, busi-nesses had to complete a number of steps before VAT came into force. These included analysing the impact of VAT on their operations and across many diﬀer-ent functions including Legal, Finance, IT, Human Resources, Procurement, Sales, Marketing and Strategy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Businesses had to review and deter-mine the VAT treatment of all their sales and purchase transactions and understand their resulting compli-ance obligations. In addition, they had to assess the capability of their existing IT system or software to produce auto-matic VAT reporting and consider if an upgrade would be suﬃcient or they would need a whole new system. It was also important for organisa-tions to make changes to their business processes, including invoicing and record keeping so they were compliant with the new VAT legislation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">From a legal perspective, it was necessary to review existing contracts with customers to check if they needed to renegotiate contracts which had no VAT clause in order to avoid bearing any VAT cost. They also had to check that all new contracts dealt with the application of VAT and set out which party was responsible for bearing the VAT liability.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In order to achieve this objective and manage relationships with customers, communication with customers was required. It was also important to communicate with suppliers to ensure they were going to issue VAT compliant invoices which would facilitate the recovery of VAT. Finally, businesses had to evaluate the cash ﬂow implications and their working capital requirements as a result of now having to pay VAT before they received payments from customers.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">All in all, a signiﬁcant amount of work had to be undertaken by businesses to be ready for VAT. In other jurisdictions such as Malaysia when a similar goods or services tax (known as GST) was implemented, companies there typically needed around six to 18 months to prepare for the change depending on the size and complexity of their operations and transactions.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Preparation Time</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Although some of the large multinational groups in the UAE began their preparations in 2016 or in the beginning of 2017, many busi-nesses in the UAE took a reactive approach instead and decided to wait until the publication of the complete VAT legislation in November before taking any action. There was also an expectation or possibly a hope in the UAE business community that the imple-mentation of VAT would be delayed by the UAE Government based on previous experience in the UAE. (Although, this was despite an indication from the FTA in early 2017 that VAT would be imple-mented on 1 January 2018 and the fact the VAT Law also conﬁrmed that VAT would be implemented by this date when it was published in August 2017.)</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In hindsight, once the UAE Government had taken a decision to implement VAT on 1 January 2018 and this fact was conﬁrmed by the VAT law, businesses could have done more and been more proactive with their VAT preparations. VAT is not a new tax and it or a similar tax exists in more than 160 other countries around the globe. In addition, the UAE VAT law is is largely based on the EU VAT rules and Malaysian GST system. In addition, the GCC VAT Agreement on which UAE VAT legislation was based was also published in the ﬁrst half of 2017. So as far as the UAE is concerned, although the ﬁnal VAT Executive Regulations were not published until November 2017, most of the information in these regulations had already been made available by the FTA earlier in the year as part of an awareness campaign. So, a signiﬁcant amount of information was already available in the public domain even before the VAT Executive Regulations were published and it was suﬃcient to enable businesses to begin their preparations. In fact, most of the information in the VAT Executive Regulations was already known before these Regulations were issued. It would have been better for businesses to begin preparation before the VAT Executive Regulations were issued based on the known information at that time and then validate any assumptions or conﬁrm positions after the regulations were issued in November 2017. Unfortunately, in the UAE, many businesses took the wrong approach and instead waited for the regulations before even beginning this work which meant they only had one month to get ready. A few businesses were even taken by surprise by the introduction of VAT despite the fact the FTA, tax advisers and the local and business press had conducted an awareness campaign throughout 2017.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>The Role of the Federal Tax Authority</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Many businesses operating in the UAE appear to have misun-derstood the role of the FTA. The FTA is a new tax authority, the legislation establishing it was published towards the end of 2016 and it only began recruiting staﬀ in the middle of 2017.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">As with any tax authority in mature tax jurisdictions, the FTA’s primary role is to administer, collect and enforce Federal taxes and apply procedures which are related to these taxes. Although it will issue technical guidance to the public on tax matters, like any tax authority, it is not responsible for advising businesses on their tax obligations or on the VAT implications of their transac-tions. Unfortunately, a number of businesses have not understood what the responsiblities of the FTA are and are currently trying to contact the FTA helpline or meet FTA representatives to obtain tax advice, although this is not part of their role. Like many tax authorities in other countries, the FTA, particularly as it is a new body, has very limited resources. With over 300,000 businesses now registered for VAT in the UAE, clearly it is not possible for the FTA to engage directly with all of them and provide tax advice particularly as this is not a part of their remit. As is the case in all other tax jurisdictions, businesses should seek tax advice from a reputable professional services ﬁrm rather than tax authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The FTA have conducted a country-wide campaign to increase awareness, through a series of seminars on VAT introduction in 2017. Given their limited resources, the scale of this campaign has been impressive and is unprecedented even by the standards of more mature tax jurisdictions. Although, some businesses may disagree, it was never realistic to expect a new tax authority like the FTA to personally visit every registered business just to tell them VAT was being introduced. The onus was also on these busi-nesses to speak to advisers and read the many articles which have been published in newspapers and business magazines on the subject.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Interpretation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is easy to mistakenly assume that since the VAT legislation has been issued now, its interpretation will be straightforward and the VAT treatment of all transactions will be clear. In many countries where VAT has been in place for some time, guidance tends to be sought from the published practice of the tax authority in the form of public notices and circulars. Case law precedent is also relied on to check how the courts have decided cases with similar facts in the past. In such countries, VAT law continues to evolve and even decades after its implementation uncertainty remains, as such, the tax authorities in these countries continue to be involved in disputes with businesses, new cases on complex VAT issues continue to be heard by the courts and new schemes are introduced to take into account unique circumstances and industry speciﬁc issues. Similar developments can be expected in the UAE as the UAE VAT legisla-tion has only been eﬀective for just over three months and there is currently no case law from which guidance can be obtained. It will also take time for the FTA’s practice to develop as they audit businesses’ VAT returns and encounter diﬀerent situations. In the future, the FTA will no doubt make further guidance available and new schemes may be announced to take account of diﬀerent industries issues. Any disputes with the FTA will be subject to a three-tier appeal system. Businesses who have a dispute with the FTA, will have the right to ask them to reconsider their decision, and the matter will then be referred to another inspector. An objec-tion against the FTA’s reconsideration decision may then be made to an independent tax disputes resolution committee made up of a judge and two tax experts. Appeals may be made against that committee’s decision to a competent court.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>What should businesses do now?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">As VAT has been implemented and ﬁling deadlines are approach-ing, the focus for businesses has shifted from VAT implementa-tion to the preparation of their ﬁrst VAT return. Companies are currently trying to identify and conﬁrm the VAT treatment of their transactions so they are able to ﬁle a complete and correct tax return. The completion of the tax return may seem a simple, straightforward task, but the department (and in some cases the individual) within the organisation who ﬁles the return on behalf of the business will be held responsible for the tax positions taken in that return regardless of whether the compliance work was outsourced. The relevant department will usually be the tax department, but it could be the legal or ﬁnance department. Given VAT is a new law, there may be uncertainty on many technical posi-tions which could create risk and this has to be taken seriously as penalties for non-compliance, including incorrect tax returns, could be as high as 300% of the tax amount due. Therefore the person responsible for this area must proactively manage this risk by obtaining professional tax advice from a reputable ﬁrm if there are uncertainties and should also document this advice for internal risk management. Going forward, it will be a challenge for FTA, tax advisers and businesses to interpret and apply the provisions of the new VAT legislation. Although VAT will involve a compliance cost for businesses, given the potential risks and penalties, it is important when ever there is uncertainty, busi-nesses work with a trusted tax adviser and navigate logically through any areas of doubt.</p>\r\n&nbsp; <p dir=\"LTR\" align=\"LEFT\"><em>For further information please contact Shiraz Khan, (s.khan@tamimi.com).</em></p>'),
	(265782,25712,'MetaValueOld','<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8016 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/21-379x1024.jpg\" alt=\"\" width=\"305\" height=\"824\" />The introduction of VAT in the UAE at the start of 2018, was a major change for businesses, Shiraz Khan of Al Tamimi &amp; Company looks back on how they should have tackled the implementation phase and what their priorities should be going forward.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The UAE’s VAT system is broadly based on common prin-ciples that have been agreed by all GCC countries in the Uniﬁed GCC VAT Agreement. These include certain ar-eas which all the individual GCC countries are required to follow. For example, the mandatory and voluntary registration thresholds were set by the GCC VAT Agreement. The standard VAT rate of 5% was also ﬁxed by the GCC VAT Agreement across the GCC. However, individual GCC countries do have some freedom to determine the application of VAT on some matters such as the VAT treatment of certain sectors and industries.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>UAE Legislation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">UAE VAT legislation is made up of Federal Decree Law No. 8/2017 on VAT (the VAT Law) and Cabinet Decision No. 52/2017 on the Executive Regulations to the VAT Law (VAT Executive Regula-tions). The Federal Decree-Law No. 8/2017, which was published in August 2017, sets out the UAE VAT rules. The Executive Regula-tions which were issued in November 2017 deal with the detailed application of the VAT Law’s provisions.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition, the Federal Tax Authority (FTA), which was formed under Federal Decree-Law No. 13/ 2016 on the Establishment of the FTA is responsible for the administration, management, collection and enforcement of VAT and all other current and future Federal taxes. At present VAT and excise tax are the only taxes at the Federal level. Federal Law No. 7/2017 for Tax Procedures and Cabinet Decision No. 36/2017 on the Executive Regulations on Tax Procedures are also relevant in this context as they provide a procedural framework that is applied across all Federal Taxes. This includes details and requirements related to tax registra-tion, ﬁling of tax returns and settlement of taxes, tax audits, appeals and penalties as well as FTA and taxpayers’ rights and obligations.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Implementation Challenges</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of VAT was a major change for businesses operating in the UAE. In order to prepare for it, busi-nesses had to complete a number of steps before VAT came into force. These included analysing the impact of VAT on their operations and across many diﬀer-ent functions including Legal, Finance, IT, Human Resources, Procurement, Sales, Marketing and Strategy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Businesses had to review and deter-mine the VAT treatment of all their sales and purchase transactions and understand their resulting compli-ance obligations. In addition, they had to assess the capability of their existing IT system or software to produce auto-matic VAT reporting and consider if an upgrade would be suﬃcient or they would need a whole new system. It was also important for organisa-tions to make changes to their business processes, including invoicing and record keeping so they were compliant with the new VAT legislation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">From a legal perspective, it was necessary to review existing contracts with customers to check if they needed to renegotiate contracts which had no VAT clause in order to avoid bearing any VAT cost. They also had to check that all new contracts dealt with the application of VAT and set out which party was responsible for bearing the VAT liability.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In order to achieve this objective and manage relationships with customers, communication with customers was required. It was also important to communicate with suppliers to ensure they were going to issue VAT compliant invoices which would facilitate the recovery of VAT. Finally, businesses had to evaluate the cash ﬂow implications and their working capital requirements as a result of now having to pay VAT before they received payments from customers.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">All in all, a signiﬁcant amount of work had to be undertaken by businesses to be ready for VAT. In other jurisdictions such as Malaysia when a similar goods or services tax (known as GST) was implemented, companies there typically needed around six to 18 months to prepare for the change depending on the size and complexity of their operations and transactions.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Preparation Time</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Although some of the large multinational groups in the UAE began their preparations in 2016 or in the beginning of 2017, many busi-nesses in the UAE took a reactive approach instead and decided to wait until the publication of the complete VAT legislation in November before taking any action. There was also an expectation or possibly a hope in the UAE business community that the imple-mentation of VAT would be delayed by the UAE Government based on previous experience in the UAE. (Although, this was despite an indication from the FTA in early 2017 that VAT would be imple-mented on 1 January 2018 and the fact the VAT Law also conﬁrmed that VAT would be implemented by this date when it was published in August 2017.)</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In hindsight, once the UAE Government had taken a decision to implement VAT on 1 January 2018 and this fact was conﬁrmed by the VAT law, businesses could have done more and been more proactive with their VAT preparations. VAT is not a new tax and it or a similar tax exists in more than 160 other countries around the globe. In addition, the UAE VAT law is is largely based on the EU VAT rules and Malaysian GST system. In addition, the GCC VAT Agreement on which UAE VAT legislation was based was also published in the ﬁrst half of 2017. So as far as the UAE is concerned, although the ﬁnal VAT Executive Regulations were not published until November 2017, most of the information in these regulations had already been made available by the FTA earlier in the year as part of an awareness campaign. So, a signiﬁcant amount of information was already available in the public domain even before the VAT Executive Regulations were published and it was suﬃcient to enable businesses to begin their preparations. In fact, most of the information in the VAT Executive Regulations was already known before these Regulations were issued. It would have been better for businesses to begin preparation before the VAT Executive Regulations were issued based on the known information at that time and then validate any assumptions or conﬁrm positions after the regulations were issued in November 2017. Unfortunately, in the UAE, many businesses took the wrong approach and instead waited for the regulations before even beginning this work which meant they only had one month to get ready. A few businesses were even taken by surprise by the introduction of VAT despite the fact the FTA, tax advisers and the local and business press had conducted an awareness campaign throughout 2017.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>The Role of the Federal Tax Authority</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Many businesses operating in the UAE appear to have misun-derstood the role of the FTA. The FTA is a new tax authority, the legislation establishing it was published towards the end of 2016 and it only began recruiting staﬀ in the middle of 2017.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">As with any tax authority in mature tax jurisdictions, the FTA’s primary role is to administer, collect and enforce Federal taxes and apply procedures which are related to these taxes. Although it will issue technical guidance to the public on tax matters, like any tax authority, it is not responsible for advising businesses on their tax obligations or on the VAT implications of their transac-tions. Unfortunately, a number of businesses have not understood what the responsiblities of the FTA are and are currently trying to contact the FTA helpline or meet FTA representatives to obtain tax advice, although this is not part of their role. Like many tax authorities in other countries, the FTA, particularly as it is a new body, has very limited resources. With over 300,000 businesses now registered for VAT in the UAE, clearly it is not possible for the FTA to engage directly with all of them and provide tax advice particularly as this is not a part of their remit. As is the case in all other tax jurisdictions, businesses should seek tax advice from a reputable professional services ﬁrm rather than tax authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The FTA have conducted a country-wide campaign to increase awareness, through a series of seminars on VAT introduction in 2017. Given their limited resources, the scale of this campaign has been impressive and is unprecedented even by the standards of more mature tax jurisdictions. Although, some businesses may disagree, it was never realistic to expect a new tax authority like the FTA to personally visit every registered business just to tell them VAT was being introduced. The onus was also on these busi-nesses to speak to advisers and read the many articles which have been published in newspapers and business magazines on the subject.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Interpretation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is easy to mistakenly assume that since the VAT legislation has been issued now, its interpretation will be straightforward and the VAT treatment of all transactions will be clear. In many countries where VAT has been in place for some time, guidance tends to be sought from the published practice of the tax authority in the form of public notices and circulars. Case law precedent is also relied on to check how the courts have decided cases with similar facts in the past. In such countries, VAT law continues to evolve and even decades after its implementation uncertainty remains, as such, the tax authorities in these countries continue to be involved in disputes with businesses, new cases on complex VAT issues continue to be heard by the courts and new schemes are introduced to take into account unique circumstances and industry speciﬁc issues. Similar developments can be expected in the UAE as the UAE VAT legisla-tion has only been eﬀective for just over three months and there is currently no case law from which guidance can be obtained. It will also take time for the FTA’s practice to develop as they audit businesses’ VAT returns and encounter diﬀerent situations. In the future, the FTA will no doubt make further guidance available and new schemes may be announced to take account of diﬀerent industries issues. Any disputes with the FTA will be subject to a three-tier appeal system. Businesses who have a dispute with the FTA, will have the right to ask them to reconsider their decision, and the matter will then be referred to another inspector. An objec-tion against the FTA’s reconsideration decision may then be made to an independent tax disputes resolution committee made up of a judge and two tax experts. Appeals may be made against that committee’s decision to a competent court.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>What should businesses do now?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">As VAT has been implemented and ﬁling deadlines are approach-ing, the focus for businesses has shifted from VAT implementa-tion to the preparation of their ﬁrst VAT return. Companies are currently trying to identify and conﬁrm the VAT treatment of their transactions so they are able to ﬁle a complete and correct tax return. The completion of the tax return may seem a simple, straightforward task, but the department (and in some cases the individual) within the organisation who ﬁles the return on behalf of the business will be held responsible for the tax positions taken in that return regardless of whether the compliance work was outsourced. The relevant department will usually be the tax department, but it could be the legal or ﬁnance department. Given VAT is a new law, there may be uncertainty on many technical posi-tions which could create risk and this has to be taken seriously as penalties for non-compliance, including incorrect tax returns, could be as high as 300% of the tax amount due. Therefore the person responsible for this area must proactively manage this risk by obtaining professional tax advice from a reputable ﬁrm if there are uncertainties and should also document this advice for internal risk management. Going forward, it will be a challenge for FTA, tax advisers and businesses to interpret and apply the provisions of the new VAT legislation. Although VAT will involve a compliance cost for businesses, given the potential risks and penalties, it is important when ever there is uncertainty, busi-nesses work with a trusted tax adviser and navigate logically through any areas of doubt.</p>\r\n <em>For further information please contact Shiraz Khan, (s.khan@tamimi.com).</em>'),
	(265783,25712,'MetaLink','content'),
	(265784,25712,'EditorLinkPost','http://localhost:8888/tamimi/wp-admin/post.php?post=7942&amp;action=edit'),
	(265785,25712,'ReportText','<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8016 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/21-379x1024.jpg\" alt=\"\" width=\"305\" height=\"824\" />The introduction of VAT in the UAE at the start of 2018, was a major change for businesses, Shiraz Khan of Al Tamimi &amp; Company looks back on how they should have tackled the implementation phase and what their priorities should be going forward.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The UAE’s VAT system is broadly based on common prin-ciples that have been agreed by all GCC countries in the Uniﬁed GCC VAT Agreement. These include certain ar-eas which all the individual GCC countries are required to follow. For example, the mandatory and voluntary registration thresholds were set by the GCC VAT Agreement. The standard VAT rate of 5% was also ﬁxed by the GCC VAT Agreement across the GCC. However, individual GCC countries do have some freedom to determine the application of VAT on some matters such as the VAT treatment of certain sectors and industries.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>UAE Legislation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">UAE VAT legislation is made up of Federal Decree Law No. 8/2017 on VAT (the VAT Law) and Cabinet Decision No. 52/2017 on the Executive Regulations to the VAT Law (VAT Executive Regula-tions). The Federal Decree-Law No. 8/2017, which was published in August 2017, sets out the UAE VAT rules. The Executive Regula-tions which were issued in November 2017 deal with the detailed application of the VAT Law’s provisions.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition, the Federal Tax Authority (FTA), which was formed under Federal Decree-Law No. 13/ 2016 on the Establishment of the FTA is responsible for the administration, management, collection and enforcement of VAT and all other current and future Federal taxes. At present VAT and excise tax are the only taxes at the Federal level. Federal Law No. 7/2017 for Tax Procedures and Cabinet Decision No. 36/2017 on the Executive Regulations on Tax Procedures are also relevant in this context as they provide a procedural framework that is applied across all Federal Taxes. This includes details and requirements related to tax registra-tion, ﬁling of tax returns and settlement of taxes, tax audits, appeals and penalties as well as FTA and taxpayers’ rights and obligations.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Implementation Challenges</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of VAT was a major change for businesses operating in the UAE. In order to prepare for it, busi-nesses had to complete a number of steps before VAT came into force. These included analysing the impact of VAT on their operations and across many diﬀer-ent functions including Legal, Finance, IT, Human Resources, Procurement, Sales, Marketing and Strategy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Businesses had to review and deter-mine the VAT treatment of all their sales and purchase transactions and understand their resulting compli-ance obligations. In addition, they had to assess the capability of their existing IT system or software to produce auto-matic VAT reporting and consider if an upgrade would be suﬃcient or they would need a whole new system. It was also important for organisa-tions to make changes to their business processes, including invoicing and record keeping so they were compliant with the new VAT legislation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">From a legal perspective, it was necessary to review existing contracts with customers to check if they needed to renegotiate contracts which had no VAT clause in order to avoid bearing any VAT cost. They also had to check that all new contracts dealt with the application of VAT and set out which party was responsible for bearing the VAT liability.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In order to achieve this objective and manage relationships with customers, communication with customers was required. It was also important to communicate with suppliers to ensure they were going to issue VAT compliant invoices which would facilitate the recovery of VAT. Finally, businesses had to evaluate the cash ﬂow implications and their working capital requirements as a result of now having to pay VAT before they received payments from customers.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">All in all, a signiﬁcant amount of work had to be undertaken by businesses to be ready for VAT. In other jurisdictions such as Malaysia when a similar goods or services tax (known as GST) was implemented, companies there typically needed around six to 18 months to prepare for the change depending on the size and complexity of their operations and transactions.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Preparation Time</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Although some of the large multinational groups in the UAE began their preparations in 2016 or in the beginning of 2017, many busi-nesses in the UAE took a reactive approach instead and decided to wait until the publication of the complete VAT legislation in November before taking any action. There was also an expectation or possibly a hope in the UAE business community that the imple-mentation of VAT would be delayed by the UAE Government based on previous experience in the UAE. (Although, this was despite an indication from the FTA in early 2017 that VAT would be imple-mented on 1 January 2018 and the fact the VAT Law also conﬁrmed that VAT would be implemented by this date when it was published in August 2017.)</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In hindsight, once the UAE Government had taken a decision to implement VAT on 1 January 2018 and this fact was conﬁrmed by the VAT law, businesses could have done more and been more proactive with their VAT preparations. VAT is not a new tax and it or a similar tax exists in more than 160 other countries around the globe. In addition, the UAE VAT law is is largely based on the EU VAT rules and Malaysian GST system. In addition, the GCC VAT Agreement on which UAE VAT legislation was based was also published in the ﬁrst half of 2017. So as far as the UAE is concerned, although the ﬁnal VAT Executive Regulations were not published until November 2017, most of the information in these regulations had already been made available by the FTA earlier in the year as part of an awareness campaign. So, a signiﬁcant amount of information was already available in the public domain even before the VAT Executive Regulations were published and it was suﬃcient to enable businesses to begin their preparations. In fact, most of the information in the VAT Executive Regulations was already known before these Regulations were issued. It would have been better for businesses to begin preparation before the VAT Executive Regulations were issued based on the known information at that time and then validate any assumptions or conﬁrm positions after the regulations were issued in November 2017. Unfortunately, in the UAE, many businesses took the wrong approach and instead waited for the regulations before even beginning this work which meant they only had one month to get ready. A few businesses were even taken by surprise by the introduction of VAT despite the fact the FTA, tax advisers and the local and business press had conducted an awareness campaign throughout 2017.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>The Role of the Federal Tax Authority</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Many businesses operating in the UAE appear to have misun-derstood the role of the FTA. The FTA is a new tax authority, the legislation establishing it was published towards the end of 2016 and it only began recruiting staﬀ in the middle of 2017.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">As with any tax authority in mature tax jurisdictions, the FTA’s primary role is to administer, collect and enforce Federal taxes and apply procedures which are related to these taxes. Although it will issue technical guidance to the public on tax matters, like any tax authority, it is not responsible for advising businesses on their tax obligations or on the VAT implications of their transac-tions. Unfortunately, a number of businesses have not understood what the responsiblities of the FTA are and are currently trying to contact the FTA helpline or meet FTA representatives to obtain tax advice, although this is not part of their role. Like many tax authorities in other countries, the FTA, particularly as it is a new body, has very limited resources. With over 300,000 businesses now registered for VAT in the UAE, clearly it is not possible for the FTA to engage directly with all of them and provide tax advice particularly as this is not a part of their remit. As is the case in all other tax jurisdictions, businesses should seek tax advice from a reputable professional services ﬁrm rather than tax authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The FTA have conducted a country-wide campaign to increase awareness, through a series of seminars on VAT introduction in 2017. Given their limited resources, the scale of this campaign has been impressive and is unprecedented even by the standards of more mature tax jurisdictions. Although, some businesses may disagree, it was never realistic to expect a new tax authority like the FTA to personally visit every registered business just to tell them VAT was being introduced. The onus was also on these busi-nesses to speak to advisers and read the many articles which have been published in newspapers and business magazines on the subject.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Interpretation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is easy to mistakenly assume that since the VAT legislation has been issued now, its interpretation will be straightforward and the VAT treatment of all transactions will be clear. In many countries where VAT has been in place for some time, guidance tends to be sought from the published practice of the tax authority in the form of public notices and circulars. Case law precedent is also relied on to check how the courts have decided cases with similar facts in the past. In such countries, VAT law continues to evolve and even decades after its implementation uncertainty remains, as such, the tax authorities in these countries continue to be involved in disputes with businesses, new cases on complex VAT issues continue to be heard by the courts and new schemes are introduced to take into account unique circumstances and industry speciﬁc issues. Similar developments can be expected in the UAE as the UAE VAT legisla-tion has only been eﬀective for just over three months and there is currently no case law from which guidance can be obtained. It will also take time for the FTA’s practice to develop as they audit businesses’ VAT returns and encounter diﬀerent situations. In the future, the FTA will no doubt make further guidance available and new schemes may be announced to take account of diﬀerent industries issues. Any disputes with the FTA will be subject to a three-tier appeal system. Businesses who have a dispute with the FTA, will have the right to ask them to reconsider their decision, and the matter will then be referred to another inspector. An objec-tion against the FTA’s reconsideration decision may then be made to an independent tax disputes resolution committee made up of a judge and two tax experts. Appeals may be made against that committee’s decision to a competent court.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>What should businesses do now?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">As VAT has been implemented and ﬁling deadlines are approach-ing, the focus for businesses has shifted from VAT implementa-tion to the preparation of their ﬁrst VAT return. Companies are currently trying to identify and conﬁrm the VAT treatment of their transactions so they are able to ﬁle a complete and correct tax return. The completion of the tax return may seem a simple, straightforward task, but the department (and in some cases the individual) within the organisation who ﬁles the return on behalf of the business will be held responsible for the tax positions taken in that return regardless of whether the compliance work was outsourced. The relevant department will usually be the tax department, but it could be the legal or ﬁnance department. Given VAT is a new law, there may be uncertainty on many technical posi-tions which could create risk and this has to be taken seriously as penalties for non-compliance, including incorrect tax returns, could be as high as 300% of the tax amount due. Therefore the person responsible for this area must proactively manage this risk by obtaining professional tax advice from a reputable ﬁrm if there are uncertainties and should also document this advice for internal risk management. Going forward, it will be a challenge for FTA, tax advisers and businesses to interpret and apply the provisions of the new VAT legislation. Although VAT will involve a compliance cost for businesses, given the potential risks and penalties, it is important when ever there is uncertainty, busi-nesses work with a trusted tax adviser and navigate logically through any areas of doubt.</p>\r\n <em>For further information please contact Shiraz Khan, (s.khan@tamimi.com).</em>|<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8016 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/21-379x1024.jpg\" alt=\"\" width=\"305\" height=\"824\" />The introduction of VAT in the UAE at the start of 2018, was a major change for businesses, Shiraz Khan of Al Tamimi &amp; Company looks back on how they should have tackled the implementation phase and what their priorities should be going forward.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The UAE’s VAT system is broadly based on common prin-ciples that have been agreed by all GCC countries in the Uniﬁed GCC VAT Agreement. These include certain ar-eas which all the individual GCC countries are required to follow. For example, the mandatory and voluntary registration thresholds were set by the GCC VAT Agreement. The standard VAT rate of 5% was also ﬁxed by the GCC VAT Agreement across the GCC. However, individual GCC countries do have some freedom to determine the application of VAT on some matters such as the VAT treatment of certain sectors and industries.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>UAE Legislation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">UAE VAT legislation is made up of Federal Decree Law No. 8/2017 on VAT (the VAT Law) and Cabinet Decision No. 52/2017 on the Executive Regulations to the VAT Law (VAT Executive Regula-tions). The Federal Decree-Law No. 8/2017, which was published in August 2017, sets out the UAE VAT rules. The Executive Regula-tions which were issued in November 2017 deal with the detailed application of the VAT Law’s provisions.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition, the Federal Tax Authority (FTA), which was formed under Federal Decree-Law No. 13/ 2016 on the Establishment of the FTA is responsible for the administration, management, collection and enforcement of VAT and all other current and future Federal taxes. At present VAT and excise tax are the only taxes at the Federal level. Federal Law No. 7/2017 for Tax Procedures and Cabinet Decision No. 36/2017 on the Executive Regulations on Tax Procedures are also relevant in this context as they provide a procedural framework that is applied across all Federal Taxes. This includes details and requirements related to tax registra-tion, ﬁling of tax returns and settlement of taxes, tax audits, appeals and penalties as well as FTA and taxpayers’ rights and obligations.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Implementation Challenges</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of VAT was a major change for businesses operating in the UAE. In order to prepare for it, busi-nesses had to complete a number of steps before VAT came into force. These included analysing the impact of VAT on their operations and across many diﬀer-ent functions including Legal, Finance, IT, Human Resources, Procurement, Sales, Marketing and Strategy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Businesses had to review and deter-mine the VAT treatment of all their sales and purchase transactions and understand their resulting compli-ance obligations. In addition, they had to assess the capability of their existing IT system or software to produce auto-matic VAT reporting and consider if an upgrade would be suﬃcient or they would need a whole new system. It was also important for organisa-tions to make changes to their business processes, including invoicing and record keeping so they were compliant with the new VAT legislation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">From a legal perspective, it was necessary to review existing contracts with customers to check if they needed to renegotiate contracts which had no VAT clause in order to avoid bearing any VAT cost. They also had to check that all new contracts dealt with the application of VAT and set out which party was responsible for bearing the VAT liability.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In order to achieve this objective and manage relationships with customers, communication with customers was required. It was also important to communicate with suppliers to ensure they were going to issue VAT compliant invoices which would facilitate the recovery of VAT. Finally, businesses had to evaluate the cash ﬂow implications and their working capital requirements as a result of now having to pay VAT before they received payments from customers.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">All in all, a signiﬁcant amount of work had to be undertaken by businesses to be ready for VAT. In other jurisdictions such as Malaysia when a similar goods or services tax (known as GST) was implemented, companies there typically needed around six to 18 months to prepare for the change depending on the size and complexity of their operations and transactions.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Preparation Time</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Although some of the large multinational groups in the UAE began their preparations in 2016 or in the beginning of 2017, many busi-nesses in the UAE took a reactive approach instead and decided to wait until the publication of the complete VAT legislation in November before taking any action. There was also an expectation or possibly a hope in the UAE business community that the imple-mentation of VAT would be delayed by the UAE Government based on previous experience in the UAE. (Although, this was despite an indication from the FTA in early 2017 that VAT would be imple-mented on 1 January 2018 and the fact the VAT Law also conﬁrmed that VAT would be implemented by this date when it was published in August 2017.)</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In hindsight, once the UAE Government had taken a decision to implement VAT on 1 January 2018 and this fact was conﬁrmed by the VAT law, businesses could have done more and been more proactive with their VAT preparations. VAT is not a new tax and it or a similar tax exists in more than 160 other countries around the globe. In addition, the UAE VAT law is is largely based on the EU VAT rules and Malaysian GST system. In addition, the GCC VAT Agreement on which UAE VAT legislation was based was also published in the ﬁrst half of 2017. So as far as the UAE is concerned, although the ﬁnal VAT Executive Regulations were not published until November 2017, most of the information in these regulations had already been made available by the FTA earlier in the year as part of an awareness campaign. So, a signiﬁcant amount of information was already available in the public domain even before the VAT Executive Regulations were published and it was suﬃcient to enable businesses to begin their preparations. In fact, most of the information in the VAT Executive Regulations was already known before these Regulations were issued. It would have been better for businesses to begin preparation before the VAT Executive Regulations were issued based on the known information at that time and then validate any assumptions or conﬁrm positions after the regulations were issued in November 2017. Unfortunately, in the UAE, many businesses took the wrong approach and instead waited for the regulations before even beginning this work which meant they only had one month to get ready. A few businesses were even taken by surprise by the introduction of VAT despite the fact the FTA, tax advisers and the local and business press had conducted an awareness campaign throughout 2017.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>The Role of the Federal Tax Authority</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Many businesses operating in the UAE appear to have misun-derstood the role of the FTA. The FTA is a new tax authority, the legislation establishing it was published towards the end of 2016 and it only began recruiting staﬀ in the middle of 2017.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">As with any tax authority in mature tax jurisdictions, the FTA’s primary role is to administer, collect and enforce Federal taxes and apply procedures which are related to these taxes. Although it will issue technical guidance to the public on tax matters, like any tax authority, it is not responsible for advising businesses on their tax obligations or on the VAT implications of their transac-tions. Unfortunately, a number of businesses have not understood what the responsiblities of the FTA are and are currently trying to contact the FTA helpline or meet FTA representatives to obtain tax advice, although this is not part of their role. Like many tax authorities in other countries, the FTA, particularly as it is a new body, has very limited resources. With over 300,000 businesses now registered for VAT in the UAE, clearly it is not possible for the FTA to engage directly with all of them and provide tax advice particularly as this is not a part of their remit. As is the case in all other tax jurisdictions, businesses should seek tax advice from a reputable professional services ﬁrm rather than tax authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The FTA have conducted a country-wide campaign to increase awareness, through a series of seminars on VAT introduction in 2017. Given their limited resources, the scale of this campaign has been impressive and is unprecedented even by the standards of more mature tax jurisdictions. Although, some businesses may disagree, it was never realistic to expect a new tax authority like the FTA to personally visit every registered business just to tell them VAT was being introduced. The onus was also on these busi-nesses to speak to advisers and read the many articles which have been published in newspapers and business magazines on the subject.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Interpretation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is easy to mistakenly assume that since the VAT legislation has been issued now, its interpretation will be straightforward and the VAT treatment of all transactions will be clear. In many countries where VAT has been in place for some time, guidance tends to be sought from the published practice of the tax authority in the form of public notices and circulars. Case law precedent is also relied on to check how the courts have decided cases with similar facts in the past. In such countries, VAT law continues to evolve and even decades after its implementation uncertainty remains, as such, the tax authorities in these countries continue to be involved in disputes with businesses, new cases on complex VAT issues continue to be heard by the courts and new schemes are introduced to take into account unique circumstances and industry speciﬁc issues. Similar developments can be expected in the UAE as the UAE VAT legisla-tion has only been eﬀective for just over three months and there is currently no case law from which guidance can be obtained. It will also take time for the FTA’s practice to develop as they audit businesses’ VAT returns and encounter diﬀerent situations. In the future, the FTA will no doubt make further guidance available and new schemes may be announced to take account of diﬀerent industries issues. Any disputes with the FTA will be subject to a three-tier appeal system. Businesses who have a dispute with the FTA, will have the right to ask them to reconsider their decision, and the matter will then be referred to another inspector. An objec-tion against the FTA’s reconsideration decision may then be made to an independent tax disputes resolution committee made up of a judge and two tax experts. Appeals may be made against that committee’s decision to a competent court.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>What should businesses do now?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">As VAT has been implemented and ﬁling deadlines are approach-ing, the focus for businesses has shifted from VAT implementa-tion to the preparation of their ﬁrst VAT return. Companies are currently trying to identify and conﬁrm the VAT treatment of their transactions so they are able to ﬁle a complete and correct tax return. The completion of the tax return may seem a simple, straightforward task, but the department (and in some cases the individual) within the organisation who ﬁles the return on behalf of the business will be held responsible for the tax positions taken in that return regardless of whether the compliance work was outsourced. The relevant department will usually be the tax department, but it could be the legal or ﬁnance department. Given VAT is a new law, there may be uncertainty on many technical posi-tions which could create risk and this has to be taken seriously as penalties for non-compliance, including incorrect tax returns, could be as high as 300% of the tax amount due. Therefore the person responsible for this area must proactively manage this risk by obtaining professional tax advice from a reputable ﬁrm if there are uncertainties and should also document this advice for internal risk management. Going forward, it will be a challenge for FTA, tax advisers and businesses to interpret and apply the provisions of the new VAT legislation. Although VAT will involve a compliance cost for businesses, given the potential risks and penalties, it is important when ever there is uncertainty, busi-nesses work with a trusted tax adviser and navigate logically through any areas of doubt.</p>\r\n&nbsp; <p dir=\"LTR\" align=\"LEFT\"><em>For further information please contact Shiraz Khan, (s.khan@tamimi.com).</em></p>'),
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	(265860,25719,'PostDate','2018-08-01 07:40:08'),
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	(265864,25719,'MetaValueNew','<p dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-8050  alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/hgfhf-796x1024.jpg\" alt=\"\" width=\"363\" height=\"467\" />In this month’s special feature of Law Update we focus on our Sports &amp; Events Management Group, as well as our Expo 2020 practice, and the interesting client issues and sector trends that have been brought into focus over the course of the past year and those which we anticipate will arise in the future.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Particular highlights of this edition include an in-depth look at the on-going privatization of football clubs in KSA; an overview of the role that blockchain and other FinTech will play in the sports and events sector going forwards; a look at the rapidly developing regulatory concerns in the nascent e-Sports market; and a special focus on the ramp-up to the grand spectacle that will be Expo 2020.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is beyond doubt that the sports and events sector is booming both globally and regionally. Industry reports predict that the global events industry will grow by 44% between 2017- 2020. In Dubai alone, which now hosts over 300 regular sporting events attracting over 1 million attendees, annual expenditure relating to sport has grown to over $1.7bn. Such growth is symptomatic of the ever-increasing appetite of governmental and non-governmental entities to embrace the sector.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For governmental bodies, events (both sporting and non-sporting) can act as powerful drivers of economic development, which positively impact upon tourism, public health, national pride, social progression and, ultimately, a country’s international reputation. One need look no further than KSA to see how sport can be utilised as a conduit for social reform, with women being allowed to attend football games for the first time in 2018. For brands too, events offer an irresistible platform to promote products in an increasingly digital age. In particular, they offer an opportunity to capture the elusive attention of ‘Millennials’ in an increasingly crowded marketplace. This key demographic demands authenticity in the brands they choose and events can help create an authentic brand experience and story, as shown by consumer surveys identifying that 87% of consumers purchase products relating to a brand’s event after attending.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The outlook is not necessarily uniform across the GCC, either in terms of sports and events background or commitment to further development of the sector. We expect that KSA and the UAE will continue to take a lead in these areas, particularly in support of their respective long-term economic development and diversification plans; however, there are significant opportunities elsewhere in the region that will bring opportunities for well-positioned clients, particularly in Qatar (in the build-up to the 2022 World Cup) and Bahrain.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">With Expo 2020 on the immediate horizon, the time to turn good planning and mindful preparation into active strategies to position participants, suppliers and stakeholders across the spectrum is squarely upon us as stakeholders in the sector. These are also certainly exciting times for the Sports and Events Management industry in the Middle East. With a history of success built in a short period of time over a wide array of events, there is a level of expectation and diversification that suggests the sports and events landscape remains promising. We will continue to closely monitor these developments with our local presence throughout the region whilst engaging with regulators and stakeholders to ensure our clients are best placed to seize the inevitable opportunities that will arise.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">We hope you will find this edition interesting and information. If you have any queries in relation to any of the articles featured or any other aspect of the Sport &amp; Events Management sector, our dedicated team of sector experts across our network of regional offices will be only too happy to assist.</p>'),
	(265865,25719,'MetaValueOld','<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8050 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/hgfhf-796x1024.jpg\" alt=\"\" width=\"363\" height=\"467\" />In this month’s special feature of Law Update we focus on our Sports &amp; Events Management Group, as well as our Expo 2020 practice, and the interesting client issues and sector trends that have been brought into focus over the course of the past year and those which we anticipate will arise in the future.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Particular highlights of this edition include an in-depth look at the on-going privatization of football clubs in KSA; an overview of the role that blockchain and other FinTech will play in the sports and events sector going forwards; a look at the rapidly developing regulatory concerns in the nascent e-Sports market; and a special focus on the ramp-up to the grand spectacle that will be Expo 2020.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is beyond doubt that the sports and events sector is booming both globally and regionally. Industry reports predict that the global events industry will grow by 44% between 2017- 2020. In Dubai alone, which now hosts over 300 regular sporting events attracting over 1 million attendees, annual expenditure relating to sport has grown to over $1.7bn. Such growth is symptomatic of the ever-increasing appetite of governmental and non-governmental entities to embrace the sector.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For governmental bodies, events (both sporting and non-sporting) can act as powerful drivers of economic development, which positively impact upon tourism, public health, national pride, social progression and, ultimately, a country’s international reputation. One need look no further than KSA to see how sport can be utilised as a conduit for social reform, with women being allowed to attend football games for the first time in 2018. For brands too, events offer an irresistible platform to promote products in an increasingly digital age. In particular, they offer an opportunity to capture the elusive attention of ‘Millennials’ in an increasingly crowded marketplace. This key demographic demands authenticity in the brands they choose and events can help create an authentic brand experience and story, as shown by consumer surveys identifying that 87% of consumers purchase products relating to a brand’s event after attending.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The outlook is not necessarily uniform across the GCC, either in terms of sports and events background or commitment to further development of the sector. We expect that KSA and the UAE will continue to take a lead in these areas, particularly in support of their respective long-term economic development and diversification plans; however, there are significant opportunities elsewhere in the region that will bring opportunities for well-positioned clients, particularly in Qatar (in the build-up to the 2022 World Cup) and Bahrain.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">With Expo 2020 on the immediate horizon, the time to turn good planning and mindful preparation into active strategies to position participants, suppliers and stakeholders across the spectrum is squarely upon us as stakeholders in the sector. These are also certainly exciting times for the Sports and Events Management industry in the Middle East. With a history of success built in a short period of time over a wide array of events, there is a level of expectation and diversification that suggests the sports and events landscape remains promising. We will continue to closely monitor these developments with our local presence throughout the region whilst engaging with regulators and stakeholders to ensure our clients are best placed to seize the inevitable opportunities that will arise.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">We hope you will find this edition interesting and information. If you have any queries in relation to any of the articles featured or any other aspect of the Sport &amp; Events Management sector, our dedicated team of sector experts across our network of regional offices will be only too happy to assist.</p>'),
	(265866,25719,'MetaLink','content'),
	(265867,25719,'EditorLinkPost','http://localhost:8888/tamimi/wp-admin/post.php?post=7943&amp;action=edit'),
	(265868,25719,'ReportText','<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8050 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/hgfhf-796x1024.jpg\" alt=\"\" width=\"363\" height=\"467\" />In this month’s special feature of Law Update we focus on our Sports &amp; Events Management Group, as well as our Expo 2020 practice, and the interesting client issues and sector trends that have been brought into focus over the course of the past year and those which we anticipate will arise in the future.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Particular highlights of this edition include an in-depth look at the on-going privatization of football clubs in KSA; an overview of the role that blockchain and other FinTech will play in the sports and events sector going forwards; a look at the rapidly developing regulatory concerns in the nascent e-Sports market; and a special focus on the ramp-up to the grand spectacle that will be Expo 2020.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is beyond doubt that the sports and events sector is booming both globally and regionally. Industry reports predict that the global events industry will grow by 44% between 2017- 2020. In Dubai alone, which now hosts over 300 regular sporting events attracting over 1 million attendees, annual expenditure relating to sport has grown to over $1.7bn. Such growth is symptomatic of the ever-increasing appetite of governmental and non-governmental entities to embrace the sector.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For governmental bodies, events (both sporting and non-sporting) can act as powerful drivers of economic development, which positively impact upon tourism, public health, national pride, social progression and, ultimately, a country’s international reputation. One need look no further than KSA to see how sport can be utilised as a conduit for social reform, with women being allowed to attend football games for the first time in 2018. For brands too, events offer an irresistible platform to promote products in an increasingly digital age. In particular, they offer an opportunity to capture the elusive attention of ‘Millennials’ in an increasingly crowded marketplace. This key demographic demands authenticity in the brands they choose and events can help create an authentic brand experience and story, as shown by consumer surveys identifying that 87% of consumers purchase products relating to a brand’s event after attending.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The outlook is not necessarily uniform across the GCC, either in terms of sports and events background or commitment to further development of the sector. We expect that KSA and the UAE will continue to take a lead in these areas, particularly in support of their respective long-term economic development and diversification plans; however, there are significant opportunities elsewhere in the region that will bring opportunities for well-positioned clients, particularly in Qatar (in the build-up to the 2022 World Cup) and Bahrain.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">With Expo 2020 on the immediate horizon, the time to turn good planning and mindful preparation into active strategies to position participants, suppliers and stakeholders across the spectrum is squarely upon us as stakeholders in the sector. These are also certainly exciting times for the Sports and Events Management industry in the Middle East. With a history of success built in a short period of time over a wide array of events, there is a level of expectation and diversification that suggests the sports and events landscape remains promising. We will continue to closely monitor these developments with our local presence throughout the region whilst engaging with regulators and stakeholders to ensure our clients are best placed to seize the inevitable opportunities that will arise.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">We hope you will find this edition interesting and information. If you have any queries in relation to any of the articles featured or any other aspect of the Sport &amp; Events Management sector, our dedicated team of sector experts across our network of regional offices will be only too happy to assist.</p>|<p dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-8050  alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/hgfhf-796x1024.jpg\" alt=\"\" width=\"363\" height=\"467\" />In this month’s special feature of Law Update we focus on our Sports &amp; Events Management Group, as well as our Expo 2020 practice, and the interesting client issues and sector trends that have been brought into focus over the course of the past year and those which we anticipate will arise in the future.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Particular highlights of this edition include an in-depth look at the on-going privatization of football clubs in KSA; an overview of the role that blockchain and other FinTech will play in the sports and events sector going forwards; a look at the rapidly developing regulatory concerns in the nascent e-Sports market; and a special focus on the ramp-up to the grand spectacle that will be Expo 2020.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is beyond doubt that the sports and events sector is booming both globally and regionally. Industry reports predict that the global events industry will grow by 44% between 2017- 2020. In Dubai alone, which now hosts over 300 regular sporting events attracting over 1 million attendees, annual expenditure relating to sport has grown to over $1.7bn. Such growth is symptomatic of the ever-increasing appetite of governmental and non-governmental entities to embrace the sector.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For governmental bodies, events (both sporting and non-sporting) can act as powerful drivers of economic development, which positively impact upon tourism, public health, national pride, social progression and, ultimately, a country’s international reputation. One need look no further than KSA to see how sport can be utilised as a conduit for social reform, with women being allowed to attend football games for the first time in 2018. For brands too, events offer an irresistible platform to promote products in an increasingly digital age. In particular, they offer an opportunity to capture the elusive attention of ‘Millennials’ in an increasingly crowded marketplace. This key demographic demands authenticity in the brands they choose and events can help create an authentic brand experience and story, as shown by consumer surveys identifying that 87% of consumers purchase products relating to a brand’s event after attending.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The outlook is not necessarily uniform across the GCC, either in terms of sports and events background or commitment to further development of the sector. We expect that KSA and the UAE will continue to take a lead in these areas, particularly in support of their respective long-term economic development and diversification plans; however, there are significant opportunities elsewhere in the region that will bring opportunities for well-positioned clients, particularly in Qatar (in the build-up to the 2022 World Cup) and Bahrain.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">With Expo 2020 on the immediate horizon, the time to turn good planning and mindful preparation into active strategies to position participants, suppliers and stakeholders across the spectrum is squarely upon us as stakeholders in the sector. These are also certainly exciting times for the Sports and Events Management industry in the Middle East. With a history of success built in a short period of time over a wide array of events, there is a level of expectation and diversification that suggests the sports and events landscape remains promising. We will continue to closely monitor these developments with our local presence throughout the region whilst engaging with regulators and stakeholders to ensure our clients are best placed to seize the inevitable opportunities that will arise.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">We hope you will find this edition interesting and information. If you have any queries in relation to any of the articles featured or any other aspect of the Sport &amp; Events Management sector, our dedicated team of sector experts across our network of regional offices will be only too happy to assist.</p>'),
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	(265921,25724,'MetaValueNew','<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8016 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/21-379x1024.jpg\" alt=\"\" width=\"305\" height=\"824\" />The introduction of VAT in the UAE at the start of 2018, was a major change for businesses, Shiraz Khan of Al Tamimi &amp; Company looks back on how they should have tackled the implementation phase and what their priorities should be going forward.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The UAE’s VAT system is broadly based on common prin-ciples that have been agreed by all GCC countries in the Uniﬁed GCC VAT Agreement. These include certain ar-eas which all the individual GCC countries are required to follow. For example, the mandatory and voluntary registration thresholds were set by the GCC VAT Agreement. The standard VAT rate of 5% was also ﬁxed by the GCC VAT Agreement across the GCC. However, individual GCC countries do have some freedom to determine the application of VAT on some matters such as the VAT treatment of certain sectors and industries.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>UAE Legislation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">UAE VAT legislation is made up of Federal Decree Law No. 8/2017 on VAT (the VAT Law) and Cabinet Decision No. 52/2017 on the Executive Regulations to the VAT Law (VAT Executive Regula-tions). The Federal Decree-Law No. 8/2017, which was published in August 2017, sets out the UAE VAT rules. The Executive Regula-tions which were issued in November 2017 deal with the detailed application of the VAT Law’s provisions.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition, the Federal Tax Authority (FTA), which was formed under Federal Decree-Law No. 13/ 2016 on the Establishment of the FTA is responsible for the administration, management, collection and enforcement of VAT and all other current and future Federal taxes. At present VAT and excise tax are the only taxes at the Federal level. Federal Law No. 7/2017 for Tax Procedures and Cabinet Decision No. 36/2017 on the Executive Regulations on Tax Procedures are also relevant in this context as they provide a procedural framework that is applied across all Federal Taxes. This includes details and requirements related to tax registra-tion, ﬁling of tax returns and settlement of taxes, tax audits, appeals and penalties as well as FTA and taxpayers’ rights and obligations.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Implementation Challenges</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of VAT was a major change for businesses operating in the UAE. In order to prepare for it, busi-nesses had to complete a number of steps before VAT came into force. These included analysing the impact of VAT on their operations and across many diﬀer-ent functions including Legal, Finance, IT, Human Resources, Procurement, Sales, Marketing and Strategy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Businesses had to review and deter-mine the VAT treatment of all their sales and purchase transactions and understand their resulting compli-ance obligations. In addition, they had to assess the capability of their existing IT system or software to produce auto-matic VAT reporting and consider if an upgrade would be suﬃcient or they would need a whole new system. It was also important for organisa-tions to make changes to their business processes, including invoicing and record keeping so they were compliant with the new VAT legislation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">From a legal perspective, it was necessary to review existing contracts with customers to check if they needed to renegotiate contracts which had no VAT clause in order to avoid bearing any VAT cost. They also had to check that all new contracts dealt with the application of VAT and set out which party was responsible for bearing the VAT liability.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In order to achieve this objective and manage relationships with customers, communication with customers was required. It was also important to communicate with suppliers to ensure they were going to issue VAT compliant invoices which would facilitate the recovery of VAT. Finally, businesses had to evaluate the cash ﬂow implications and their working capital requirements as a result of now having to pay VAT before they received payments from customers.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">All in all, a signiﬁcant amount of work had to be undertaken by businesses to be ready for VAT. In other jurisdictions such as Malaysia when a similar goods or services tax (known as GST) was implemented, companies there typically needed around six to 18 months to prepare for the change depending on the size and complexity of their operations and transactions.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Preparation Time</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Although some of the large multinational groups in the UAE began their preparations in 2016 or in the beginning of 2017, many busi-nesses in the UAE took a reactive approach instead and decided to wait until the publication of the complete VAT legislation in November before taking any action. There was also an expectation or possibly a hope in the UAE business community that the imple-mentation of VAT would be delayed by the UAE Government based on previous experience in the UAE. (Although, this was despite an indication from the FTA in early 2017 that VAT would be imple-mented on 1 January 2018 and the fact the VAT Law also conﬁrmed that VAT would be implemented by this date when it was published in August 2017.)</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In hindsight, once the UAE Government had taken a decision to implement VAT on 1 January 2018 and this fact was conﬁrmed by the VAT law, businesses could have done more and been more proactive with their VAT preparations. VAT is not a new tax and it or a similar tax exists in more than 160 other countries around the globe. In addition, the UAE VAT law is is largely based on the EU VAT rules and Malaysian GST system. In addition, the GCC VAT Agreement on which UAE VAT legislation was based was also published in the ﬁrst half of 2017. So as far as the UAE is concerned, although the ﬁnal VAT Executive Regulations were not published until November 2017, most of the information in these regulations had already been made available by the FTA earlier in the year as part of an awareness campaign. So, a signiﬁcant amount of information was already available in the public domain even before the VAT Executive Regulations were published and it was suﬃcient to enable businesses to begin their preparations. In fact, most of the information in the VAT Executive Regulations was already known before these Regulations were issued. It would have been better for businesses to begin preparation before the VAT Executive Regulations were issued based on the known information at that time and then validate any assumptions or conﬁrm positions after the regulations were issued in November 2017. Unfortunately, in the UAE, many businesses took the wrong approach and instead waited for the regulations before even beginning this work which meant they only had one month to get ready. A few businesses were even taken by surprise by the introduction of VAT despite the fact the FTA, tax advisers and the local and business press had conducted an awareness campaign throughout 2017.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"alignleft size-large wp-image-8085\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/08/shutterstock_727827781-Converted-01-1024x724.png\" alt=\"\" width=\"640\" height=\"453\" />The Role of the Federal Tax Authority</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Many businesses operating in the UAE appear to have misun-derstood the role of the FTA. The FTA is a new tax authority, the legislation establishing it was published towards the end of 2016 and it only began recruiting staﬀ in the middle of 2017.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">As with any tax authority in mature tax jurisdictions, the FTA’s primary role is to administer, collect and enforce Federal taxes and apply procedures which are related to these taxes. Although it will issue technical guidance to the public on tax matters, like any tax authority, it is not responsible for advising businesses on their tax obligations or on the VAT implications of their transac-tions. Unfortunately, a number of businesses have not understood what the responsiblities of the FTA are and are currently trying to contact the FTA helpline or meet FTA representatives to obtain tax advice, although this is not part of their role. Like many tax authorities in other countries, the FTA, particularly as it is a new body, has very limited resources. With over 300,000 businesses now registered for VAT in the UAE, clearly it is not possible for the FTA to engage directly with all of them and provide tax advice particularly as this is not a part of their remit. As is the case in all other tax jurisdictions, businesses should seek tax advice from a reputable professional services ﬁrm rather than tax authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The FTA have conducted a country-wide campaign to increase awareness, through a series of seminars on VAT introduction in 2017. Given their limited resources, the scale of this campaign has been impressive and is unprecedented even by the standards of more mature tax jurisdictions. Although, some businesses may disagree, it was never realistic to expect a new tax authority like the FTA to personally visit every registered business just to tell them VAT was being introduced. The onus was also on these busi-nesses to speak to advisers and read the many articles which have been published in newspapers and business magazines on the subject.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Interpretation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is easy to mistakenly assume that since the VAT legislation has been issued now, its interpretation will be straightforward and the VAT treatment of all transactions will be clear. In many countries where VAT has been in place for some time, guidance tends to be sought from the published practice of the tax authority in the form of public notices and circulars. Case law precedent is also relied on to check how the courts have decided cases with similar facts in the past. In such countries, VAT law continues to evolve and even decades after its implementation uncertainty remains, as such, the tax authorities in these countries continue to be involved in disputes with businesses, new cases on complex VAT issues continue to be heard by the courts and new schemes are introduced to take into account unique circumstances and industry speciﬁc issues. Similar developments can be expected in the UAE as the UAE VAT legisla-tion has only been eﬀective for just over three months and there is currently no case law from which guidance can be obtained. It will also take time for the FTA’s practice to develop as they audit businesses’ VAT returns and encounter diﬀerent situations. In the future, the FTA will no doubt make further guidance available and new schemes may be announced to take account of diﬀerent industries issues. Any disputes with the FTA will be subject to a three-tier appeal system. Businesses who have a dispute with the FTA, will have the right to ask them to reconsider their decision, and the matter will then be referred to another inspector. An objec-tion against the FTA’s reconsideration decision may then be made to an independent tax disputes resolution committee made up of a judge and two tax experts. Appeals may be made against that committee’s decision to a competent court.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>What should businesses do now?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">As VAT has been implemented and ﬁling deadlines are approach-ing, the focus for businesses has shifted from VAT implementa-tion to the preparation of their ﬁrst VAT return. Companies are currently trying to identify and conﬁrm the VAT treatment of their transactions so they are able to ﬁle a complete and correct tax return. The completion of the tax return may seem a simple, straightforward task, but the department (and in some cases the individual) within the organisation who ﬁles the return on behalf of the business will be held responsible for the tax positions taken in that return regardless of whether the compliance work was outsourced. The relevant department will usually be the tax department, but it could be the legal or ﬁnance department. Given VAT is a new law, there may be uncertainty on many technical posi-tions which could create risk and this has to be taken seriously as penalties for non-compliance, including incorrect tax returns, could be as high as 300% of the tax amount due. Therefore the person responsible for this area must proactively manage this risk by obtaining professional tax advice from a reputable ﬁrm if there are uncertainties and should also document this advice for internal risk management. Going forward, it will be a challenge for FTA, tax advisers and businesses to interpret and apply the provisions of the new VAT legislation. Although VAT will involve a compliance cost for businesses, given the potential risks and penalties, it is important when ever there is uncertainty, busi-nesses work with a trusted tax adviser and navigate logically through any areas of doubt.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>For further information please contact Shiraz Khan, (s.khan@tamimi.com).</em></p>');

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It was also important to communicate with suppliers to ensure they were going to issue VAT compliant invoices which would facilitate the recovery of VAT. Finally, businesses had to evaluate the cash ﬂow implications and their working capital requirements as a result of now having to pay VAT before they received payments from customers.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">All in all, a signiﬁcant amount of work had to be undertaken by businesses to be ready for VAT. In other jurisdictions such as Malaysia when a similar goods or services tax (known as GST) was implemented, companies there typically needed around six to 18 months to prepare for the change depending on the size and complexity of their operations and transactions.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Preparation Time</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Although some of the large multinational groups in the UAE began their preparations in 2016 or in the beginning of 2017, many busi-nesses in the UAE took a reactive approach instead and decided to wait until the publication of the complete VAT legislation in November before taking any action. There was also an expectation or possibly a hope in the UAE business community that the imple-mentation of VAT would be delayed by the UAE Government based on previous experience in the UAE. (Although, this was despite an indication from the FTA in early 2017 that VAT would be imple-mented on 1 January 2018 and the fact the VAT Law also conﬁrmed that VAT would be implemented by this date when it was published in August 2017.)</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In hindsight, once the UAE Government had taken a decision to implement VAT on 1 January 2018 and this fact was conﬁrmed by the VAT law, businesses could have done more and been more proactive with their VAT preparations. VAT is not a new tax and it or a similar tax exists in more than 160 other countries around the globe. In addition, the UAE VAT law is is largely based on the EU VAT rules and Malaysian GST system. In addition, the GCC VAT Agreement on which UAE VAT legislation was based was also published in the ﬁrst half of 2017. So as far as the UAE is concerned, although the ﬁnal VAT Executive Regulations were not published until November 2017, most of the information in these regulations had already been made available by the FTA earlier in the year as part of an awareness campaign. So, a signiﬁcant amount of information was already available in the public domain even before the VAT Executive Regulations were published and it was suﬃcient to enable businesses to begin their preparations. In fact, most of the information in the VAT Executive Regulations was already known before these Regulations were issued. It would have been better for businesses to begin preparation before the VAT Executive Regulations were issued based on the known information at that time and then validate any assumptions or conﬁrm positions after the regulations were issued in November 2017. Unfortunately, in the UAE, many businesses took the wrong approach and instead waited for the regulations before even beginning this work which meant they only had one month to get ready. A few businesses were even taken by surprise by the introduction of VAT despite the fact the FTA, tax advisers and the local and business press had conducted an awareness campaign throughout 2017.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>The Role of the Federal Tax Authority</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Many businesses operating in the UAE appear to have misun-derstood the role of the FTA. The FTA is a new tax authority, the legislation establishing it was published towards the end of 2016 and it only began recruiting staﬀ in the middle of 2017.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">As with any tax authority in mature tax jurisdictions, the FTA’s primary role is to administer, collect and enforce Federal taxes and apply procedures which are related to these taxes. Although it will issue technical guidance to the public on tax matters, like any tax authority, it is not responsible for advising businesses on their tax obligations or on the VAT implications of their transac-tions. Unfortunately, a number of businesses have not understood what the responsiblities of the FTA are and are currently trying to contact the FTA helpline or meet FTA representatives to obtain tax advice, although this is not part of their role. Like many tax authorities in other countries, the FTA, particularly as it is a new body, has very limited resources. With over 300,000 businesses now registered for VAT in the UAE, clearly it is not possible for the FTA to engage directly with all of them and provide tax advice particularly as this is not a part of their remit. As is the case in all other tax jurisdictions, businesses should seek tax advice from a reputable professional services ﬁrm rather than tax authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The FTA have conducted a country-wide campaign to increase awareness, through a series of seminars on VAT introduction in 2017. Given their limited resources, the scale of this campaign has been impressive and is unprecedented even by the standards of more mature tax jurisdictions. Although, some businesses may disagree, it was never realistic to expect a new tax authority like the FTA to personally visit every registered business just to tell them VAT was being introduced. The onus was also on these busi-nesses to speak to advisers and read the many articles which have been published in newspapers and business magazines on the subject.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Interpretation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is easy to mistakenly assume that since the VAT legislation has been issued now, its interpretation will be straightforward and the VAT treatment of all transactions will be clear. In many countries where VAT has been in place for some time, guidance tends to be sought from the published practice of the tax authority in the form of public notices and circulars. Case law precedent is also relied on to check how the courts have decided cases with similar facts in the past. In such countries, VAT law continues to evolve and even decades after its implementation uncertainty remains, as such, the tax authorities in these countries continue to be involved in disputes with businesses, new cases on complex VAT issues continue to be heard by the courts and new schemes are introduced to take into account unique circumstances and industry speciﬁc issues. Similar developments can be expected in the UAE as the UAE VAT legisla-tion has only been eﬀective for just over three months and there is currently no case law from which guidance can be obtained. It will also take time for the FTA’s practice to develop as they audit businesses’ VAT returns and encounter diﬀerent situations. In the future, the FTA will no doubt make further guidance available and new schemes may be announced to take account of diﬀerent industries issues. Any disputes with the FTA will be subject to a three-tier appeal system. Businesses who have a dispute with the FTA, will have the right to ask them to reconsider their decision, and the matter will then be referred to another inspector. An objec-tion against the FTA’s reconsideration decision may then be made to an independent tax disputes resolution committee made up of a judge and two tax experts. Appeals may be made against that committee’s decision to a competent court.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>What should businesses do now?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">As VAT has been implemented and ﬁling deadlines are approach-ing, the focus for businesses has shifted from VAT implementa-tion to the preparation of their ﬁrst VAT return. Companies are currently trying to identify and conﬁrm the VAT treatment of their transactions so they are able to ﬁle a complete and correct tax return. The completion of the tax return may seem a simple, straightforward task, but the department (and in some cases the individual) within the organisation who ﬁles the return on behalf of the business will be held responsible for the tax positions taken in that return regardless of whether the compliance work was outsourced. The relevant department will usually be the tax department, but it could be the legal or ﬁnance department. Given VAT is a new law, there may be uncertainty on many technical posi-tions which could create risk and this has to be taken seriously as penalties for non-compliance, including incorrect tax returns, could be as high as 300% of the tax amount due. Therefore the person responsible for this area must proactively manage this risk by obtaining professional tax advice from a reputable ﬁrm if there are uncertainties and should also document this advice for internal risk management. Going forward, it will be a challenge for FTA, tax advisers and businesses to interpret and apply the provisions of the new VAT legislation. Although VAT will involve a compliance cost for businesses, given the potential risks and penalties, it is important when ever there is uncertainty, busi-nesses work with a trusted tax adviser and navigate logically through any areas of doubt.</p>\r\n&nbsp; <p dir=\"LTR\" align=\"LEFT\"><em>For further information please contact Shiraz Khan, (s.khan@tamimi.com).</em></p>'),
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	(265925,25724,'ReportText','<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8016 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/21-379x1024.jpg\" alt=\"\" width=\"305\" height=\"824\" />The introduction of VAT in the UAE at the start of 2018, was a major change for businesses, Shiraz Khan of Al Tamimi &amp; Company looks back on how they should have tackled the implementation phase and what their priorities should be going forward.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The UAE’s VAT system is broadly based on common prin-ciples that have been agreed by all GCC countries in the Uniﬁed GCC VAT Agreement. These include certain ar-eas which all the individual GCC countries are required to follow. For example, the mandatory and voluntary registration thresholds were set by the GCC VAT Agreement. The standard VAT rate of 5% was also ﬁxed by the GCC VAT Agreement across the GCC. However, individual GCC countries do have some freedom to determine the application of VAT on some matters such as the VAT treatment of certain sectors and industries.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>UAE Legislation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">UAE VAT legislation is made up of Federal Decree Law No. 8/2017 on VAT (the VAT Law) and Cabinet Decision No. 52/2017 on the Executive Regulations to the VAT Law (VAT Executive Regula-tions). The Federal Decree-Law No. 8/2017, which was published in August 2017, sets out the UAE VAT rules. The Executive Regula-tions which were issued in November 2017 deal with the detailed application of the VAT Law’s provisions.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition, the Federal Tax Authority (FTA), which was formed under Federal Decree-Law No. 13/ 2016 on the Establishment of the FTA is responsible for the administration, management, collection and enforcement of VAT and all other current and future Federal taxes. At present VAT and excise tax are the only taxes at the Federal level. Federal Law No. 7/2017 for Tax Procedures and Cabinet Decision No. 36/2017 on the Executive Regulations on Tax Procedures are also relevant in this context as they provide a procedural framework that is applied across all Federal Taxes. This includes details and requirements related to tax registra-tion, ﬁling of tax returns and settlement of taxes, tax audits, appeals and penalties as well as FTA and taxpayers’ rights and obligations.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Implementation Challenges</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of VAT was a major change for businesses operating in the UAE. In order to prepare for it, busi-nesses had to complete a number of steps before VAT came into force. These included analysing the impact of VAT on their operations and across many diﬀer-ent functions including Legal, Finance, IT, Human Resources, Procurement, Sales, Marketing and Strategy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Businesses had to review and deter-mine the VAT treatment of all their sales and purchase transactions and understand their resulting compli-ance obligations. In addition, they had to assess the capability of their existing IT system or software to produce auto-matic VAT reporting and consider if an upgrade would be suﬃcient or they would need a whole new system. It was also important for organisa-tions to make changes to their business processes, including invoicing and record keeping so they were compliant with the new VAT legislation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">From a legal perspective, it was necessary to review existing contracts with customers to check if they needed to renegotiate contracts which had no VAT clause in order to avoid bearing any VAT cost. They also had to check that all new contracts dealt with the application of VAT and set out which party was responsible for bearing the VAT liability.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In order to achieve this objective and manage relationships with customers, communication with customers was required. It was also important to communicate with suppliers to ensure they were going to issue VAT compliant invoices which would facilitate the recovery of VAT. Finally, businesses had to evaluate the cash ﬂow implications and their working capital requirements as a result of now having to pay VAT before they received payments from customers.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">All in all, a signiﬁcant amount of work had to be undertaken by businesses to be ready for VAT. In other jurisdictions such as Malaysia when a similar goods or services tax (known as GST) was implemented, companies there typically needed around six to 18 months to prepare for the change depending on the size and complexity of their operations and transactions.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Preparation Time</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Although some of the large multinational groups in the UAE began their preparations in 2016 or in the beginning of 2017, many busi-nesses in the UAE took a reactive approach instead and decided to wait until the publication of the complete VAT legislation in November before taking any action. There was also an expectation or possibly a hope in the UAE business community that the imple-mentation of VAT would be delayed by the UAE Government based on previous experience in the UAE. (Although, this was despite an indication from the FTA in early 2017 that VAT would be imple-mented on 1 January 2018 and the fact the VAT Law also conﬁrmed that VAT would be implemented by this date when it was published in August 2017.)</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In hindsight, once the UAE Government had taken a decision to implement VAT on 1 January 2018 and this fact was conﬁrmed by the VAT law, businesses could have done more and been more proactive with their VAT preparations. VAT is not a new tax and it or a similar tax exists in more than 160 other countries around the globe. In addition, the UAE VAT law is is largely based on the EU VAT rules and Malaysian GST system. In addition, the GCC VAT Agreement on which UAE VAT legislation was based was also published in the ﬁrst half of 2017. So as far as the UAE is concerned, although the ﬁnal VAT Executive Regulations were not published until November 2017, most of the information in these regulations had already been made available by the FTA earlier in the year as part of an awareness campaign. So, a signiﬁcant amount of information was already available in the public domain even before the VAT Executive Regulations were published and it was suﬃcient to enable businesses to begin their preparations. In fact, most of the information in the VAT Executive Regulations was already known before these Regulations were issued. It would have been better for businesses to begin preparation before the VAT Executive Regulations were issued based on the known information at that time and then validate any assumptions or conﬁrm positions after the regulations were issued in November 2017. Unfortunately, in the UAE, many businesses took the wrong approach and instead waited for the regulations before even beginning this work which meant they only had one month to get ready. A few businesses were even taken by surprise by the introduction of VAT despite the fact the FTA, tax advisers and the local and business press had conducted an awareness campaign throughout 2017.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>The Role of the Federal Tax Authority</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Many businesses operating in the UAE appear to have misun-derstood the role of the FTA. The FTA is a new tax authority, the legislation establishing it was published towards the end of 2016 and it only began recruiting staﬀ in the middle of 2017.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">As with any tax authority in mature tax jurisdictions, the FTA’s primary role is to administer, collect and enforce Federal taxes and apply procedures which are related to these taxes. Although it will issue technical guidance to the public on tax matters, like any tax authority, it is not responsible for advising businesses on their tax obligations or on the VAT implications of their transac-tions. Unfortunately, a number of businesses have not understood what the responsiblities of the FTA are and are currently trying to contact the FTA helpline or meet FTA representatives to obtain tax advice, although this is not part of their role. Like many tax authorities in other countries, the FTA, particularly as it is a new body, has very limited resources. With over 300,000 businesses now registered for VAT in the UAE, clearly it is not possible for the FTA to engage directly with all of them and provide tax advice particularly as this is not a part of their remit. As is the case in all other tax jurisdictions, businesses should seek tax advice from a reputable professional services ﬁrm rather than tax authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The FTA have conducted a country-wide campaign to increase awareness, through a series of seminars on VAT introduction in 2017. Given their limited resources, the scale of this campaign has been impressive and is unprecedented even by the standards of more mature tax jurisdictions. Although, some businesses may disagree, it was never realistic to expect a new tax authority like the FTA to personally visit every registered business just to tell them VAT was being introduced. The onus was also on these busi-nesses to speak to advisers and read the many articles which have been published in newspapers and business magazines on the subject.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Interpretation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is easy to mistakenly assume that since the VAT legislation has been issued now, its interpretation will be straightforward and the VAT treatment of all transactions will be clear. In many countries where VAT has been in place for some time, guidance tends to be sought from the published practice of the tax authority in the form of public notices and circulars. Case law precedent is also relied on to check how the courts have decided cases with similar facts in the past. In such countries, VAT law continues to evolve and even decades after its implementation uncertainty remains, as such, the tax authorities in these countries continue to be involved in disputes with businesses, new cases on complex VAT issues continue to be heard by the courts and new schemes are introduced to take into account unique circumstances and industry speciﬁc issues. Similar developments can be expected in the UAE as the UAE VAT legisla-tion has only been eﬀective for just over three months and there is currently no case law from which guidance can be obtained. It will also take time for the FTA’s practice to develop as they audit businesses’ VAT returns and encounter diﬀerent situations. In the future, the FTA will no doubt make further guidance available and new schemes may be announced to take account of diﬀerent industries issues. Any disputes with the FTA will be subject to a three-tier appeal system. Businesses who have a dispute with the FTA, will have the right to ask them to reconsider their decision, and the matter will then be referred to another inspector. An objec-tion against the FTA’s reconsideration decision may then be made to an independent tax disputes resolution committee made up of a judge and two tax experts. Appeals may be made against that committee’s decision to a competent court.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>What should businesses do now?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">As VAT has been implemented and ﬁling deadlines are approach-ing, the focus for businesses has shifted from VAT implementa-tion to the preparation of their ﬁrst VAT return. Companies are currently trying to identify and conﬁrm the VAT treatment of their transactions so they are able to ﬁle a complete and correct tax return. The completion of the tax return may seem a simple, straightforward task, but the department (and in some cases the individual) within the organisation who ﬁles the return on behalf of the business will be held responsible for the tax positions taken in that return regardless of whether the compliance work was outsourced. The relevant department will usually be the tax department, but it could be the legal or ﬁnance department. Given VAT is a new law, there may be uncertainty on many technical posi-tions which could create risk and this has to be taken seriously as penalties for non-compliance, including incorrect tax returns, could be as high as 300% of the tax amount due. Therefore the person responsible for this area must proactively manage this risk by obtaining professional tax advice from a reputable ﬁrm if there are uncertainties and should also document this advice for internal risk management. Going forward, it will be a challenge for FTA, tax advisers and businesses to interpret and apply the provisions of the new VAT legislation. Although VAT will involve a compliance cost for businesses, given the potential risks and penalties, it is important when ever there is uncertainty, busi-nesses work with a trusted tax adviser and navigate logically through any areas of doubt.</p>\r\n&nbsp; <p dir=\"LTR\" align=\"LEFT\"><em>For further information please contact Shiraz Khan, (s.khan@tamimi.com).</em></p>|<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8016 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/21-379x1024.jpg\" alt=\"\" width=\"305\" height=\"824\" />The introduction of VAT in the UAE at the start of 2018, was a major change for businesses, Shiraz Khan of Al Tamimi &amp; Company looks back on how they should have tackled the implementation phase and what their priorities should be going forward.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The UAE’s VAT system is broadly based on common prin-ciples that have been agreed by all GCC countries in the Uniﬁed GCC VAT Agreement. These include certain ar-eas which all the individual GCC countries are required to follow. For example, the mandatory and voluntary registration thresholds were set by the GCC VAT Agreement. The standard VAT rate of 5% was also ﬁxed by the GCC VAT Agreement across the GCC. However, individual GCC countries do have some freedom to determine the application of VAT on some matters such as the VAT treatment of certain sectors and industries.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>UAE Legislation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">UAE VAT legislation is made up of Federal Decree Law No. 8/2017 on VAT (the VAT Law) and Cabinet Decision No. 52/2017 on the Executive Regulations to the VAT Law (VAT Executive Regula-tions). The Federal Decree-Law No. 8/2017, which was published in August 2017, sets out the UAE VAT rules. The Executive Regula-tions which were issued in November 2017 deal with the detailed application of the VAT Law’s provisions.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition, the Federal Tax Authority (FTA), which was formed under Federal Decree-Law No. 13/ 2016 on the Establishment of the FTA is responsible for the administration, management, collection and enforcement of VAT and all other current and future Federal taxes. At present VAT and excise tax are the only taxes at the Federal level. Federal Law No. 7/2017 for Tax Procedures and Cabinet Decision No. 36/2017 on the Executive Regulations on Tax Procedures are also relevant in this context as they provide a procedural framework that is applied across all Federal Taxes. This includes details and requirements related to tax registra-tion, ﬁling of tax returns and settlement of taxes, tax audits, appeals and penalties as well as FTA and taxpayers’ rights and obligations.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Implementation Challenges</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of VAT was a major change for businesses operating in the UAE. In order to prepare for it, busi-nesses had to complete a number of steps before VAT came into force. These included analysing the impact of VAT on their operations and across many diﬀer-ent functions including Legal, Finance, IT, Human Resources, Procurement, Sales, Marketing and Strategy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Businesses had to review and deter-mine the VAT treatment of all their sales and purchase transactions and understand their resulting compli-ance obligations. In addition, they had to assess the capability of their existing IT system or software to produce auto-matic VAT reporting and consider if an upgrade would be suﬃcient or they would need a whole new system. It was also important for organisa-tions to make changes to their business processes, including invoicing and record keeping so they were compliant with the new VAT legislation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">From a legal perspective, it was necessary to review existing contracts with customers to check if they needed to renegotiate contracts which had no VAT clause in order to avoid bearing any VAT cost. They also had to check that all new contracts dealt with the application of VAT and set out which party was responsible for bearing the VAT liability.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In order to achieve this objective and manage relationships with customers, communication with customers was required. It was also important to communicate with suppliers to ensure they were going to issue VAT compliant invoices which would facilitate the recovery of VAT. Finally, businesses had to evaluate the cash ﬂow implications and their working capital requirements as a result of now having to pay VAT before they received payments from customers.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">All in all, a signiﬁcant amount of work had to be undertaken by businesses to be ready for VAT. In other jurisdictions such as Malaysia when a similar goods or services tax (known as GST) was implemented, companies there typically needed around six to 18 months to prepare for the change depending on the size and complexity of their operations and transactions.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Preparation Time</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Although some of the large multinational groups in the UAE began their preparations in 2016 or in the beginning of 2017, many busi-nesses in the UAE took a reactive approach instead and decided to wait until the publication of the complete VAT legislation in November before taking any action. There was also an expectation or possibly a hope in the UAE business community that the imple-mentation of VAT would be delayed by the UAE Government based on previous experience in the UAE. (Although, this was despite an indication from the FTA in early 2017 that VAT would be imple-mented on 1 January 2018 and the fact the VAT Law also conﬁrmed that VAT would be implemented by this date when it was published in August 2017.)</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In hindsight, once the UAE Government had taken a decision to implement VAT on 1 January 2018 and this fact was conﬁrmed by the VAT law, businesses could have done more and been more proactive with their VAT preparations. VAT is not a new tax and it or a similar tax exists in more than 160 other countries around the globe. In addition, the UAE VAT law is is largely based on the EU VAT rules and Malaysian GST system. In addition, the GCC VAT Agreement on which UAE VAT legislation was based was also published in the ﬁrst half of 2017. So as far as the UAE is concerned, although the ﬁnal VAT Executive Regulations were not published until November 2017, most of the information in these regulations had already been made available by the FTA earlier in the year as part of an awareness campaign. So, a signiﬁcant amount of information was already available in the public domain even before the VAT Executive Regulations were published and it was suﬃcient to enable businesses to begin their preparations. In fact, most of the information in the VAT Executive Regulations was already known before these Regulations were issued. It would have been better for businesses to begin preparation before the VAT Executive Regulations were issued based on the known information at that time and then validate any assumptions or conﬁrm positions after the regulations were issued in November 2017. Unfortunately, in the UAE, many businesses took the wrong approach and instead waited for the regulations before even beginning this work which meant they only had one month to get ready. A few businesses were even taken by surprise by the introduction of VAT despite the fact the FTA, tax advisers and the local and business press had conducted an awareness campaign throughout 2017.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"alignleft size-large wp-image-8085\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/08/shutterstock_727827781-Converted-01-1024x724.png\" alt=\"\" width=\"640\" height=\"453\" />The Role of the Federal Tax Authority</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Many businesses operating in the UAE appear to have misun-derstood the role of the FTA. The FTA is a new tax authority, the legislation establishing it was published towards the end of 2016 and it only began recruiting staﬀ in the middle of 2017.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">As with any tax authority in mature tax jurisdictions, the FTA’s primary role is to administer, collect and enforce Federal taxes and apply procedures which are related to these taxes. Although it will issue technical guidance to the public on tax matters, like any tax authority, it is not responsible for advising businesses on their tax obligations or on the VAT implications of their transac-tions. Unfortunately, a number of businesses have not understood what the responsiblities of the FTA are and are currently trying to contact the FTA helpline or meet FTA representatives to obtain tax advice, although this is not part of their role. Like many tax authorities in other countries, the FTA, particularly as it is a new body, has very limited resources. With over 300,000 businesses now registered for VAT in the UAE, clearly it is not possible for the FTA to engage directly with all of them and provide tax advice particularly as this is not a part of their remit. As is the case in all other tax jurisdictions, businesses should seek tax advice from a reputable professional services ﬁrm rather than tax authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The FTA have conducted a country-wide campaign to increase awareness, through a series of seminars on VAT introduction in 2017. Given their limited resources, the scale of this campaign has been impressive and is unprecedented even by the standards of more mature tax jurisdictions. Although, some businesses may disagree, it was never realistic to expect a new tax authority like the FTA to personally visit every registered business just to tell them VAT was being introduced. The onus was also on these busi-nesses to speak to advisers and read the many articles which have been published in newspapers and business magazines on the subject.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Interpretation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is easy to mistakenly assume that since the VAT legislation has been issued now, its interpretation will be straightforward and the VAT treatment of all transactions will be clear. In many countries where VAT has been in place for some time, guidance tends to be sought from the published practice of the tax authority in the form of public notices and circulars. Case law precedent is also relied on to check how the courts have decided cases with similar facts in the past. In such countries, VAT law continues to evolve and even decades after its implementation uncertainty remains, as such, the tax authorities in these countries continue to be involved in disputes with businesses, new cases on complex VAT issues continue to be heard by the courts and new schemes are introduced to take into account unique circumstances and industry speciﬁc issues. Similar developments can be expected in the UAE as the UAE VAT legisla-tion has only been eﬀective for just over three months and there is currently no case law from which guidance can be obtained. It will also take time for the FTA’s practice to develop as they audit businesses’ VAT returns and encounter diﬀerent situations. In the future, the FTA will no doubt make further guidance available and new schemes may be announced to take account of diﬀerent industries issues. Any disputes with the FTA will be subject to a three-tier appeal system. Businesses who have a dispute with the FTA, will have the right to ask them to reconsider their decision, and the matter will then be referred to another inspector. An objec-tion against the FTA’s reconsideration decision may then be made to an independent tax disputes resolution committee made up of a judge and two tax experts. Appeals may be made against that committee’s decision to a competent court.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>What should businesses do now?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">As VAT has been implemented and ﬁling deadlines are approach-ing, the focus for businesses has shifted from VAT implementa-tion to the preparation of their ﬁrst VAT return. Companies are currently trying to identify and conﬁrm the VAT treatment of their transactions so they are able to ﬁle a complete and correct tax return. The completion of the tax return may seem a simple, straightforward task, but the department (and in some cases the individual) within the organisation who ﬁles the return on behalf of the business will be held responsible for the tax positions taken in that return regardless of whether the compliance work was outsourced. The relevant department will usually be the tax department, but it could be the legal or ﬁnance department. Given VAT is a new law, there may be uncertainty on many technical posi-tions which could create risk and this has to be taken seriously as penalties for non-compliance, including incorrect tax returns, could be as high as 300% of the tax amount due. Therefore the person responsible for this area must proactively manage this risk by obtaining professional tax advice from a reputable ﬁrm if there are uncertainties and should also document this advice for internal risk management. Going forward, it will be a challenge for FTA, tax advisers and businesses to interpret and apply the provisions of the new VAT legislation. Although VAT will involve a compliance cost for businesses, given the potential risks and penalties, it is important when ever there is uncertainty, busi-nesses work with a trusted tax adviser and navigate logically through any areas of doubt.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>For further information please contact Shiraz Khan, (s.khan@tamimi.com).</em></p>'),
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	(265978,25729,'PostDate','2018-08-01 07:40:24'),
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	(265982,25729,'MetaValueNew','<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8016 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/21-379x1024.jpg\" alt=\"\" width=\"305\" height=\"824\" />The introduction of VAT in the UAE at the start of 2018, was a major change for businesses, Shiraz Khan of Al Tamimi &amp; Company looks back on how they should have tackled the implementation phase and what their priorities should be going forward.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The UAE’s VAT system is broadly based on common prin-ciples that have been agreed by all GCC countries in the Uniﬁed GCC VAT Agreement. These include certain ar-eas which all the individual GCC countries are required to follow. For example, the mandatory and voluntary registration thresholds were set by the GCC VAT Agreement. The standard VAT rate of 5% was also ﬁxed by the GCC VAT Agreement across the GCC. However, individual GCC countries do have some freedom to determine the application of VAT on some matters such as the VAT treatment of certain sectors and industries.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>UAE Legislation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">UAE VAT legislation is made up of Federal Decree Law No. 8/2017 on VAT (the VAT Law) and Cabinet Decision No. 52/2017 on the Executive Regulations to the VAT Law (VAT Executive Regula-tions). The Federal Decree-Law No. 8/2017, which was published in August 2017, sets out the UAE VAT rules. The Executive Regula-tions which were issued in November 2017 deal with the detailed application of the VAT Law’s provisions.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition, the Federal Tax Authority (FTA), which was formed under Federal Decree-Law No. 13/ 2016 on the Establishment of the FTA is responsible for the administration, management, collection and enforcement of VAT and all other current and future Federal taxes. At present VAT and excise tax are the only taxes at the Federal level. Federal Law No. 7/2017 for Tax Procedures and Cabinet Decision No. 36/2017 on the Executive Regulations on Tax Procedures are also relevant in this context as they provide a procedural framework that is applied across all Federal Taxes. This includes details and requirements related to tax registra-tion, ﬁling of tax returns and settlement of taxes, tax audits, appeals and penalties as well as FTA and taxpayers’ rights and obligations.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Implementation Challenges</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of VAT was a major change for businesses operating in the UAE. In order to prepare for it, busi-nesses had to complete a number of steps before VAT came into force. These included analysing the impact of VAT on their operations and across many diﬀer-ent functions including Legal, Finance, IT, Human Resources, Procurement, Sales, Marketing and Strategy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Businesses had to review and deter-mine the VAT treatment of all their sales and purchase transactions and understand their resulting compli-ance obligations. In addition, they had to assess the capability of their existing IT system or software to produce auto-matic VAT reporting and consider if an upgrade would be suﬃcient or they would need a whole new system. It was also important for organisa-tions to make changes to their business processes, including invoicing and record keeping so they were compliant with the new VAT legislation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">From a legal perspective, it was necessary to review existing contracts with customers to check if they needed to renegotiate contracts which had no VAT clause in order to avoid bearing any VAT cost. They also had to check that all new contracts dealt with the application of VAT and set out which party was responsible for bearing the VAT liability.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In order to achieve this objective and manage relationships with customers, communication with customers was required. It was also important to communicate with suppliers to ensure they were going to issue VAT compliant invoices which would facilitate the recovery of VAT. Finally, businesses had to evaluate the cash ﬂow implications and their working capital requirements as a result of now having to pay VAT before they received payments from customers.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">All in all, a signiﬁcant amount of work had to be undertaken by businesses to be ready for VAT. In other jurisdictions such as Malaysia when a similar goods or services tax (known as GST) was implemented, companies there typically needed around six to 18 months to prepare for the change depending on the size and complexity of their operations and transactions.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Preparation Time</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Although some of the large multinational groups in the UAE began their preparations in 2016 or in the beginning of 2017, many busi-nesses in the UAE took a reactive approach instead and decided to wait until the publication of the complete VAT legislation in November before taking any action. There was also an expectation or possibly a hope in the UAE business community that the imple-mentation of VAT would be delayed by the UAE Government based on previous experience in the UAE. (Although, this was despite an indication from the FTA in early 2017 that VAT would be imple-mented on 1 January 2018 and the fact the VAT Law also conﬁrmed that VAT would be implemented by this date when it was published in August 2017.)</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In hindsight, once the UAE Government had taken a decision to implement VAT on 1 January 2018 and this fact was conﬁrmed by the VAT law, businesses could have done more and been more proactive with their VAT preparations. VAT is not a new tax and it or a similar tax exists in more than 160 other countries around the globe. In addition, the UAE VAT law is is largely based on the EU VAT rules and Malaysian GST system. In addition, the GCC VAT Agreement on which UAE VAT legislation was based was also published in the ﬁrst half of 2017. So as far as the UAE is concerned, although the ﬁnal VAT Executive Regulations were not published until November 2017, most of the information in these regulations had already been made available by the FTA earlier in the year as part of an awareness campaign. So, a signiﬁcant amount of information was already available in the public domain even before the VAT Executive Regulations were published and it was suﬃcient to enable businesses to begin their preparations. In fact, most of the information in the VAT Executive Regulations was already known before these Regulations were issued. It would have been better for businesses to begin preparation before the VAT Executive Regulations were issued based on the known information at that time and then validate any assumptions or conﬁrm positions after the regulations were issued in November 2017. Unfortunately, in the UAE, many businesses took the wrong approach and instead waited for the regulations before even beginning this work which meant they only had one month to get ready. A few businesses were even taken by surprise by the introduction of VAT despite the fact the FTA, tax advisers and the local and business press had conducted an awareness campaign throughout 2017.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"alignleft  wp-image-8085\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/08/shutterstock_727827781-Converted-01-1024x724.png\" alt=\"\" width=\"483\" height=\"342\" />The Role of the Federal Tax Authority</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Many businesses operating in the UAE appear to have misun-derstood the role of the FTA. The FTA is a new tax authority, the legislation establishing it was published towards the end of 2016 and it only began recruiting staﬀ in the middle of 2017.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">As with any tax authority in mature tax jurisdictions, the FTA’s primary role is to administer, collect and enforce Federal taxes and apply procedures which are related to these taxes. Although it will issue technical guidance to the public on tax matters, like any tax authority, it is not responsible for advising businesses on their tax obligations or on the VAT implications of their transac-tions. Unfortunately, a number of businesses have not understood what the responsiblities of the FTA are and are currently trying to contact the FTA helpline or meet FTA representatives to obtain tax advice, although this is not part of their role. Like many tax authorities in other countries, the FTA, particularly as it is a new body, has very limited resources. With over 300,000 businesses now registered for VAT in the UAE, clearly it is not possible for the FTA to engage directly with all of them and provide tax advice particularly as this is not a part of their remit. As is the case in all other tax jurisdictions, businesses should seek tax advice from a reputable professional services ﬁrm rather than tax authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The FTA have conducted a country-wide campaign to increase awareness, through a series of seminars on VAT introduction in 2017. Given their limited resources, the scale of this campaign has been impressive and is unprecedented even by the standards of more mature tax jurisdictions. Although, some businesses may disagree, it was never realistic to expect a new tax authority like the FTA to personally visit every registered business just to tell them VAT was being introduced. The onus was also on these busi-nesses to speak to advisers and read the many articles which have been published in newspapers and business magazines on the subject.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Interpretation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is easy to mistakenly assume that since the VAT legislation has been issued now, its interpretation will be straightforward and the VAT treatment of all transactions will be clear. In many countries where VAT has been in place for some time, guidance tends to be sought from the published practice of the tax authority in the form of public notices and circulars. Case law precedent is also relied on to check how the courts have decided cases with similar facts in the past. In such countries, VAT law continues to evolve and even decades after its implementation uncertainty remains, as such, the tax authorities in these countries continue to be involved in disputes with businesses, new cases on complex VAT issues continue to be heard by the courts and new schemes are introduced to take into account unique circumstances and industry speciﬁc issues. Similar developments can be expected in the UAE as the UAE VAT legisla-tion has only been eﬀective for just over three months and there is currently no case law from which guidance can be obtained. It will also take time for the FTA’s practice to develop as they audit businesses’ VAT returns and encounter diﬀerent situations. In the future, the FTA will no doubt make further guidance available and new schemes may be announced to take account of diﬀerent industries issues. Any disputes with the FTA will be subject to a three-tier appeal system. Businesses who have a dispute with the FTA, will have the right to ask them to reconsider their decision, and the matter will then be referred to another inspector. An objec-tion against the FTA’s reconsideration decision may then be made to an independent tax disputes resolution committee made up of a judge and two tax experts. Appeals may be made against that committee’s decision to a competent court.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>What should businesses do now?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">As VAT has been implemented and ﬁling deadlines are approach-ing, the focus for businesses has shifted from VAT implementa-tion to the preparation of their ﬁrst VAT return. Companies are currently trying to identify and conﬁrm the VAT treatment of their transactions so they are able to ﬁle a complete and correct tax return. The completion of the tax return may seem a simple, straightforward task, but the department (and in some cases the individual) within the organisation who ﬁles the return on behalf of the business will be held responsible for the tax positions taken in that return regardless of whether the compliance work was outsourced. The relevant department will usually be the tax department, but it could be the legal or ﬁnance department. Given VAT is a new law, there may be uncertainty on many technical posi-tions which could create risk and this has to be taken seriously as penalties for non-compliance, including incorrect tax returns, could be as high as 300% of the tax amount due. Therefore the person responsible for this area must proactively manage this risk by obtaining professional tax advice from a reputable ﬁrm if there are uncertainties and should also document this advice for internal risk management. Going forward, it will be a challenge for FTA, tax advisers and businesses to interpret and apply the provisions of the new VAT legislation. Although VAT will involve a compliance cost for businesses, given the potential risks and penalties, it is important when ever there is uncertainty, busi-nesses work with a trusted tax adviser and navigate logically through any areas of doubt.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>For further information please contact Shiraz Khan, (s.khan@tamimi.com).</em></p>'),
	(265983,25729,'MetaValueOld','<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8016 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/21-379x1024.jpg\" alt=\"\" width=\"305\" height=\"824\" />The introduction of VAT in the UAE at the start of 2018, was a major change for businesses, Shiraz Khan of Al Tamimi &amp; Company looks back on how they should have tackled the implementation phase and what their priorities should be going forward.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The UAE’s VAT system is broadly based on common prin-ciples that have been agreed by all GCC countries in the Uniﬁed GCC VAT Agreement. These include certain ar-eas which all the individual GCC countries are required to follow. For example, the mandatory and voluntary registration thresholds were set by the GCC VAT Agreement. The standard VAT rate of 5% was also ﬁxed by the GCC VAT Agreement across the GCC. However, individual GCC countries do have some freedom to determine the application of VAT on some matters such as the VAT treatment of certain sectors and industries.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>UAE Legislation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">UAE VAT legislation is made up of Federal Decree Law No. 8/2017 on VAT (the VAT Law) and Cabinet Decision No. 52/2017 on the Executive Regulations to the VAT Law (VAT Executive Regula-tions). The Federal Decree-Law No. 8/2017, which was published in August 2017, sets out the UAE VAT rules. The Executive Regula-tions which were issued in November 2017 deal with the detailed application of the VAT Law’s provisions.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition, the Federal Tax Authority (FTA), which was formed under Federal Decree-Law No. 13/ 2016 on the Establishment of the FTA is responsible for the administration, management, collection and enforcement of VAT and all other current and future Federal taxes. At present VAT and excise tax are the only taxes at the Federal level. Federal Law No. 7/2017 for Tax Procedures and Cabinet Decision No. 36/2017 on the Executive Regulations on Tax Procedures are also relevant in this context as they provide a procedural framework that is applied across all Federal Taxes. This includes details and requirements related to tax registra-tion, ﬁling of tax returns and settlement of taxes, tax audits, appeals and penalties as well as FTA and taxpayers’ rights and obligations.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Implementation Challenges</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of VAT was a major change for businesses operating in the UAE. In order to prepare for it, busi-nesses had to complete a number of steps before VAT came into force. These included analysing the impact of VAT on their operations and across many diﬀer-ent functions including Legal, Finance, IT, Human Resources, Procurement, Sales, Marketing and Strategy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Businesses had to review and deter-mine the VAT treatment of all their sales and purchase transactions and understand their resulting compli-ance obligations. In addition, they had to assess the capability of their existing IT system or software to produce auto-matic VAT reporting and consider if an upgrade would be suﬃcient or they would need a whole new system. It was also important for organisa-tions to make changes to their business processes, including invoicing and record keeping so they were compliant with the new VAT legislation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">From a legal perspective, it was necessary to review existing contracts with customers to check if they needed to renegotiate contracts which had no VAT clause in order to avoid bearing any VAT cost. They also had to check that all new contracts dealt with the application of VAT and set out which party was responsible for bearing the VAT liability.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In order to achieve this objective and manage relationships with customers, communication with customers was required. It was also important to communicate with suppliers to ensure they were going to issue VAT compliant invoices which would facilitate the recovery of VAT. Finally, businesses had to evaluate the cash ﬂow implications and their working capital requirements as a result of now having to pay VAT before they received payments from customers.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">All in all, a signiﬁcant amount of work had to be undertaken by businesses to be ready for VAT. In other jurisdictions such as Malaysia when a similar goods or services tax (known as GST) was implemented, companies there typically needed around six to 18 months to prepare for the change depending on the size and complexity of their operations and transactions.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Preparation Time</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Although some of the large multinational groups in the UAE began their preparations in 2016 or in the beginning of 2017, many busi-nesses in the UAE took a reactive approach instead and decided to wait until the publication of the complete VAT legislation in November before taking any action. There was also an expectation or possibly a hope in the UAE business community that the imple-mentation of VAT would be delayed by the UAE Government based on previous experience in the UAE. (Although, this was despite an indication from the FTA in early 2017 that VAT would be imple-mented on 1 January 2018 and the fact the VAT Law also conﬁrmed that VAT would be implemented by this date when it was published in August 2017.)</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In hindsight, once the UAE Government had taken a decision to implement VAT on 1 January 2018 and this fact was conﬁrmed by the VAT law, businesses could have done more and been more proactive with their VAT preparations. VAT is not a new tax and it or a similar tax exists in more than 160 other countries around the globe. In addition, the UAE VAT law is is largely based on the EU VAT rules and Malaysian GST system. In addition, the GCC VAT Agreement on which UAE VAT legislation was based was also published in the ﬁrst half of 2017. So as far as the UAE is concerned, although the ﬁnal VAT Executive Regulations were not published until November 2017, most of the information in these regulations had already been made available by the FTA earlier in the year as part of an awareness campaign. So, a signiﬁcant amount of information was already available in the public domain even before the VAT Executive Regulations were published and it was suﬃcient to enable businesses to begin their preparations. In fact, most of the information in the VAT Executive Regulations was already known before these Regulations were issued. It would have been better for businesses to begin preparation before the VAT Executive Regulations were issued based on the known information at that time and then validate any assumptions or conﬁrm positions after the regulations were issued in November 2017. Unfortunately, in the UAE, many businesses took the wrong approach and instead waited for the regulations before even beginning this work which meant they only had one month to get ready. A few businesses were even taken by surprise by the introduction of VAT despite the fact the FTA, tax advisers and the local and business press had conducted an awareness campaign throughout 2017.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"alignleft size-large wp-image-8085\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/08/shutterstock_727827781-Converted-01-1024x724.png\" alt=\"\" width=\"640\" height=\"453\" />The Role of the Federal Tax Authority</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Many businesses operating in the UAE appear to have misun-derstood the role of the FTA. The FTA is a new tax authority, the legislation establishing it was published towards the end of 2016 and it only began recruiting staﬀ in the middle of 2017.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">As with any tax authority in mature tax jurisdictions, the FTA’s primary role is to administer, collect and enforce Federal taxes and apply procedures which are related to these taxes. Although it will issue technical guidance to the public on tax matters, like any tax authority, it is not responsible for advising businesses on their tax obligations or on the VAT implications of their transac-tions. Unfortunately, a number of businesses have not understood what the responsiblities of the FTA are and are currently trying to contact the FTA helpline or meet FTA representatives to obtain tax advice, although this is not part of their role. Like many tax authorities in other countries, the FTA, particularly as it is a new body, has very limited resources. With over 300,000 businesses now registered for VAT in the UAE, clearly it is not possible for the FTA to engage directly with all of them and provide tax advice particularly as this is not a part of their remit. As is the case in all other tax jurisdictions, businesses should seek tax advice from a reputable professional services ﬁrm rather than tax authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The FTA have conducted a country-wide campaign to increase awareness, through a series of seminars on VAT introduction in 2017. Given their limited resources, the scale of this campaign has been impressive and is unprecedented even by the standards of more mature tax jurisdictions. Although, some businesses may disagree, it was never realistic to expect a new tax authority like the FTA to personally visit every registered business just to tell them VAT was being introduced. The onus was also on these busi-nesses to speak to advisers and read the many articles which have been published in newspapers and business magazines on the subject.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Interpretation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is easy to mistakenly assume that since the VAT legislation has been issued now, its interpretation will be straightforward and the VAT treatment of all transactions will be clear. In many countries where VAT has been in place for some time, guidance tends to be sought from the published practice of the tax authority in the form of public notices and circulars. Case law precedent is also relied on to check how the courts have decided cases with similar facts in the past. In such countries, VAT law continues to evolve and even decades after its implementation uncertainty remains, as such, the tax authorities in these countries continue to be involved in disputes with businesses, new cases on complex VAT issues continue to be heard by the courts and new schemes are introduced to take into account unique circumstances and industry speciﬁc issues. Similar developments can be expected in the UAE as the UAE VAT legisla-tion has only been eﬀective for just over three months and there is currently no case law from which guidance can be obtained. It will also take time for the FTA’s practice to develop as they audit businesses’ VAT returns and encounter diﬀerent situations. In the future, the FTA will no doubt make further guidance available and new schemes may be announced to take account of diﬀerent industries issues. Any disputes with the FTA will be subject to a three-tier appeal system. Businesses who have a dispute with the FTA, will have the right to ask them to reconsider their decision, and the matter will then be referred to another inspector. An objec-tion against the FTA’s reconsideration decision may then be made to an independent tax disputes resolution committee made up of a judge and two tax experts. Appeals may be made against that committee’s decision to a competent court.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>What should businesses do now?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">As VAT has been implemented and ﬁling deadlines are approach-ing, the focus for businesses has shifted from VAT implementa-tion to the preparation of their ﬁrst VAT return. Companies are currently trying to identify and conﬁrm the VAT treatment of their transactions so they are able to ﬁle a complete and correct tax return. The completion of the tax return may seem a simple, straightforward task, but the department (and in some cases the individual) within the organisation who ﬁles the return on behalf of the business will be held responsible for the tax positions taken in that return regardless of whether the compliance work was outsourced. The relevant department will usually be the tax department, but it could be the legal or ﬁnance department. Given VAT is a new law, there may be uncertainty on many technical posi-tions which could create risk and this has to be taken seriously as penalties for non-compliance, including incorrect tax returns, could be as high as 300% of the tax amount due. Therefore the person responsible for this area must proactively manage this risk by obtaining professional tax advice from a reputable ﬁrm if there are uncertainties and should also document this advice for internal risk management. Going forward, it will be a challenge for FTA, tax advisers and businesses to interpret and apply the provisions of the new VAT legislation. Although VAT will involve a compliance cost for businesses, given the potential risks and penalties, it is important when ever there is uncertainty, busi-nesses work with a trusted tax adviser and navigate logically through any areas of doubt.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>For further information please contact Shiraz Khan, (s.khan@tamimi.com).</em></p>'),
	(265984,25729,'MetaLink','content'),
	(265985,25729,'EditorLinkPost','http://localhost:8888/tamimi/wp-admin/post.php?post=7942&amp;action=edit'),
	(265986,25729,'ReportText','<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8016 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/21-379x1024.jpg\" alt=\"\" width=\"305\" height=\"824\" />The introduction of VAT in the UAE at the start of 2018, was a major change for businesses, Shiraz Khan of Al Tamimi &amp; Company looks back on how they should have tackled the implementation phase and what their priorities should be going forward.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The UAE’s VAT system is broadly based on common prin-ciples that have been agreed by all GCC countries in the Uniﬁed GCC VAT Agreement. These include certain ar-eas which all the individual GCC countries are required to follow. For example, the mandatory and voluntary registration thresholds were set by the GCC VAT Agreement. The standard VAT rate of 5% was also ﬁxed by the GCC VAT Agreement across the GCC. However, individual GCC countries do have some freedom to determine the application of VAT on some matters such as the VAT treatment of certain sectors and industries.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>UAE Legislation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">UAE VAT legislation is made up of Federal Decree Law No. 8/2017 on VAT (the VAT Law) and Cabinet Decision No. 52/2017 on the Executive Regulations to the VAT Law (VAT Executive Regula-tions). The Federal Decree-Law No. 8/2017, which was published in August 2017, sets out the UAE VAT rules. The Executive Regula-tions which were issued in November 2017 deal with the detailed application of the VAT Law’s provisions.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition, the Federal Tax Authority (FTA), which was formed under Federal Decree-Law No. 13/ 2016 on the Establishment of the FTA is responsible for the administration, management, collection and enforcement of VAT and all other current and future Federal taxes. At present VAT and excise tax are the only taxes at the Federal level. Federal Law No. 7/2017 for Tax Procedures and Cabinet Decision No. 36/2017 on the Executive Regulations on Tax Procedures are also relevant in this context as they provide a procedural framework that is applied across all Federal Taxes. This includes details and requirements related to tax registra-tion, ﬁling of tax returns and settlement of taxes, tax audits, appeals and penalties as well as FTA and taxpayers’ rights and obligations.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Implementation Challenges</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of VAT was a major change for businesses operating in the UAE. In order to prepare for it, busi-nesses had to complete a number of steps before VAT came into force. These included analysing the impact of VAT on their operations and across many diﬀer-ent functions including Legal, Finance, IT, Human Resources, Procurement, Sales, Marketing and Strategy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Businesses had to review and deter-mine the VAT treatment of all their sales and purchase transactions and understand their resulting compli-ance obligations. In addition, they had to assess the capability of their existing IT system or software to produce auto-matic VAT reporting and consider if an upgrade would be suﬃcient or they would need a whole new system. It was also important for organisa-tions to make changes to their business processes, including invoicing and record keeping so they were compliant with the new VAT legislation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">From a legal perspective, it was necessary to review existing contracts with customers to check if they needed to renegotiate contracts which had no VAT clause in order to avoid bearing any VAT cost. They also had to check that all new contracts dealt with the application of VAT and set out which party was responsible for bearing the VAT liability.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In order to achieve this objective and manage relationships with customers, communication with customers was required. It was also important to communicate with suppliers to ensure they were going to issue VAT compliant invoices which would facilitate the recovery of VAT. Finally, businesses had to evaluate the cash ﬂow implications and their working capital requirements as a result of now having to pay VAT before they received payments from customers.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">All in all, a signiﬁcant amount of work had to be undertaken by businesses to be ready for VAT. In other jurisdictions such as Malaysia when a similar goods or services tax (known as GST) was implemented, companies there typically needed around six to 18 months to prepare for the change depending on the size and complexity of their operations and transactions.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Preparation Time</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Although some of the large multinational groups in the UAE began their preparations in 2016 or in the beginning of 2017, many busi-nesses in the UAE took a reactive approach instead and decided to wait until the publication of the complete VAT legislation in November before taking any action. There was also an expectation or possibly a hope in the UAE business community that the imple-mentation of VAT would be delayed by the UAE Government based on previous experience in the UAE. (Although, this was despite an indication from the FTA in early 2017 that VAT would be imple-mented on 1 January 2018 and the fact the VAT Law also conﬁrmed that VAT would be implemented by this date when it was published in August 2017.)</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In hindsight, once the UAE Government had taken a decision to implement VAT on 1 January 2018 and this fact was conﬁrmed by the VAT law, businesses could have done more and been more proactive with their VAT preparations. VAT is not a new tax and it or a similar tax exists in more than 160 other countries around the globe. In addition, the UAE VAT law is is largely based on the EU VAT rules and Malaysian GST system. In addition, the GCC VAT Agreement on which UAE VAT legislation was based was also published in the ﬁrst half of 2017. So as far as the UAE is concerned, although the ﬁnal VAT Executive Regulations were not published until November 2017, most of the information in these regulations had already been made available by the FTA earlier in the year as part of an awareness campaign. So, a signiﬁcant amount of information was already available in the public domain even before the VAT Executive Regulations were published and it was suﬃcient to enable businesses to begin their preparations. In fact, most of the information in the VAT Executive Regulations was already known before these Regulations were issued. It would have been better for businesses to begin preparation before the VAT Executive Regulations were issued based on the known information at that time and then validate any assumptions or conﬁrm positions after the regulations were issued in November 2017. Unfortunately, in the UAE, many businesses took the wrong approach and instead waited for the regulations before even beginning this work which meant they only had one month to get ready. A few businesses were even taken by surprise by the introduction of VAT despite the fact the FTA, tax advisers and the local and business press had conducted an awareness campaign throughout 2017.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"alignleft size-large wp-image-8085\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/08/shutterstock_727827781-Converted-01-1024x724.png\" alt=\"\" width=\"640\" height=\"453\" />The Role of the Federal Tax Authority</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Many businesses operating in the UAE appear to have misun-derstood the role of the FTA. The FTA is a new tax authority, the legislation establishing it was published towards the end of 2016 and it only began recruiting staﬀ in the middle of 2017.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">As with any tax authority in mature tax jurisdictions, the FTA’s primary role is to administer, collect and enforce Federal taxes and apply procedures which are related to these taxes. Although it will issue technical guidance to the public on tax matters, like any tax authority, it is not responsible for advising businesses on their tax obligations or on the VAT implications of their transac-tions. Unfortunately, a number of businesses have not understood what the responsiblities of the FTA are and are currently trying to contact the FTA helpline or meet FTA representatives to obtain tax advice, although this is not part of their role. Like many tax authorities in other countries, the FTA, particularly as it is a new body, has very limited resources. With over 300,000 businesses now registered for VAT in the UAE, clearly it is not possible for the FTA to engage directly with all of them and provide tax advice particularly as this is not a part of their remit. As is the case in all other tax jurisdictions, businesses should seek tax advice from a reputable professional services ﬁrm rather than tax authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The FTA have conducted a country-wide campaign to increase awareness, through a series of seminars on VAT introduction in 2017. Given their limited resources, the scale of this campaign has been impressive and is unprecedented even by the standards of more mature tax jurisdictions. Although, some businesses may disagree, it was never realistic to expect a new tax authority like the FTA to personally visit every registered business just to tell them VAT was being introduced. The onus was also on these busi-nesses to speak to advisers and read the many articles which have been published in newspapers and business magazines on the subject.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Interpretation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is easy to mistakenly assume that since the VAT legislation has been issued now, its interpretation will be straightforward and the VAT treatment of all transactions will be clear. In many countries where VAT has been in place for some time, guidance tends to be sought from the published practice of the tax authority in the form of public notices and circulars. Case law precedent is also relied on to check how the courts have decided cases with similar facts in the past. In such countries, VAT law continues to evolve and even decades after its implementation uncertainty remains, as such, the tax authorities in these countries continue to be involved in disputes with businesses, new cases on complex VAT issues continue to be heard by the courts and new schemes are introduced to take into account unique circumstances and industry speciﬁc issues. Similar developments can be expected in the UAE as the UAE VAT legisla-tion has only been eﬀective for just over three months and there is currently no case law from which guidance can be obtained. It will also take time for the FTA’s practice to develop as they audit businesses’ VAT returns and encounter diﬀerent situations. In the future, the FTA will no doubt make further guidance available and new schemes may be announced to take account of diﬀerent industries issues. Any disputes with the FTA will be subject to a three-tier appeal system. Businesses who have a dispute with the FTA, will have the right to ask them to reconsider their decision, and the matter will then be referred to another inspector. An objec-tion against the FTA’s reconsideration decision may then be made to an independent tax disputes resolution committee made up of a judge and two tax experts. Appeals may be made against that committee’s decision to a competent court.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>What should businesses do now?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">As VAT has been implemented and ﬁling deadlines are approach-ing, the focus for businesses has shifted from VAT implementa-tion to the preparation of their ﬁrst VAT return. Companies are currently trying to identify and conﬁrm the VAT treatment of their transactions so they are able to ﬁle a complete and correct tax return. The completion of the tax return may seem a simple, straightforward task, but the department (and in some cases the individual) within the organisation who ﬁles the return on behalf of the business will be held responsible for the tax positions taken in that return regardless of whether the compliance work was outsourced. The relevant department will usually be the tax department, but it could be the legal or ﬁnance department. Given VAT is a new law, there may be uncertainty on many technical posi-tions which could create risk and this has to be taken seriously as penalties for non-compliance, including incorrect tax returns, could be as high as 300% of the tax amount due. Therefore the person responsible for this area must proactively manage this risk by obtaining professional tax advice from a reputable ﬁrm if there are uncertainties and should also document this advice for internal risk management. Going forward, it will be a challenge for FTA, tax advisers and businesses to interpret and apply the provisions of the new VAT legislation. Although VAT will involve a compliance cost for businesses, given the potential risks and penalties, it is important when ever there is uncertainty, busi-nesses work with a trusted tax adviser and navigate logically through any areas of doubt.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>For further information please contact Shiraz Khan, (s.khan@tamimi.com).</em></p>|<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8016 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/21-379x1024.jpg\" alt=\"\" width=\"305\" height=\"824\" />The introduction of VAT in the UAE at the start of 2018, was a major change for businesses, Shiraz Khan of Al Tamimi &amp; Company looks back on how they should have tackled the implementation phase and what their priorities should be going forward.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The UAE’s VAT system is broadly based on common prin-ciples that have been agreed by all GCC countries in the Uniﬁed GCC VAT Agreement. These include certain ar-eas which all the individual GCC countries are required to follow. For example, the mandatory and voluntary registration thresholds were set by the GCC VAT Agreement. The standard VAT rate of 5% was also ﬁxed by the GCC VAT Agreement across the GCC. However, individual GCC countries do have some freedom to determine the application of VAT on some matters such as the VAT treatment of certain sectors and industries.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>UAE Legislation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">UAE VAT legislation is made up of Federal Decree Law No. 8/2017 on VAT (the VAT Law) and Cabinet Decision No. 52/2017 on the Executive Regulations to the VAT Law (VAT Executive Regula-tions). The Federal Decree-Law No. 8/2017, which was published in August 2017, sets out the UAE VAT rules. The Executive Regula-tions which were issued in November 2017 deal with the detailed application of the VAT Law’s provisions.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition, the Federal Tax Authority (FTA), which was formed under Federal Decree-Law No. 13/ 2016 on the Establishment of the FTA is responsible for the administration, management, collection and enforcement of VAT and all other current and future Federal taxes. At present VAT and excise tax are the only taxes at the Federal level. Federal Law No. 7/2017 for Tax Procedures and Cabinet Decision No. 36/2017 on the Executive Regulations on Tax Procedures are also relevant in this context as they provide a procedural framework that is applied across all Federal Taxes. This includes details and requirements related to tax registra-tion, ﬁling of tax returns and settlement of taxes, tax audits, appeals and penalties as well as FTA and taxpayers’ rights and obligations.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Implementation Challenges</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of VAT was a major change for businesses operating in the UAE. In order to prepare for it, busi-nesses had to complete a number of steps before VAT came into force. These included analysing the impact of VAT on their operations and across many diﬀer-ent functions including Legal, Finance, IT, Human Resources, Procurement, Sales, Marketing and Strategy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Businesses had to review and deter-mine the VAT treatment of all their sales and purchase transactions and understand their resulting compli-ance obligations. In addition, they had to assess the capability of their existing IT system or software to produce auto-matic VAT reporting and consider if an upgrade would be suﬃcient or they would need a whole new system. It was also important for organisa-tions to make changes to their business processes, including invoicing and record keeping so they were compliant with the new VAT legislation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">From a legal perspective, it was necessary to review existing contracts with customers to check if they needed to renegotiate contracts which had no VAT clause in order to avoid bearing any VAT cost. They also had to check that all new contracts dealt with the application of VAT and set out which party was responsible for bearing the VAT liability.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In order to achieve this objective and manage relationships with customers, communication with customers was required. It was also important to communicate with suppliers to ensure they were going to issue VAT compliant invoices which would facilitate the recovery of VAT. Finally, businesses had to evaluate the cash ﬂow implications and their working capital requirements as a result of now having to pay VAT before they received payments from customers.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">All in all, a signiﬁcant amount of work had to be undertaken by businesses to be ready for VAT. In other jurisdictions such as Malaysia when a similar goods or services tax (known as GST) was implemented, companies there typically needed around six to 18 months to prepare for the change depending on the size and complexity of their operations and transactions.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Preparation Time</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Although some of the large multinational groups in the UAE began their preparations in 2016 or in the beginning of 2017, many busi-nesses in the UAE took a reactive approach instead and decided to wait until the publication of the complete VAT legislation in November before taking any action. There was also an expectation or possibly a hope in the UAE business community that the imple-mentation of VAT would be delayed by the UAE Government based on previous experience in the UAE. (Although, this was despite an indication from the FTA in early 2017 that VAT would be imple-mented on 1 January 2018 and the fact the VAT Law also conﬁrmed that VAT would be implemented by this date when it was published in August 2017.)</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In hindsight, once the UAE Government had taken a decision to implement VAT on 1 January 2018 and this fact was conﬁrmed by the VAT law, businesses could have done more and been more proactive with their VAT preparations. VAT is not a new tax and it or a similar tax exists in more than 160 other countries around the globe. In addition, the UAE VAT law is is largely based on the EU VAT rules and Malaysian GST system. In addition, the GCC VAT Agreement on which UAE VAT legislation was based was also published in the ﬁrst half of 2017. So as far as the UAE is concerned, although the ﬁnal VAT Executive Regulations were not published until November 2017, most of the information in these regulations had already been made available by the FTA earlier in the year as part of an awareness campaign. So, a signiﬁcant amount of information was already available in the public domain even before the VAT Executive Regulations were published and it was suﬃcient to enable businesses to begin their preparations. In fact, most of the information in the VAT Executive Regulations was already known before these Regulations were issued. It would have been better for businesses to begin preparation before the VAT Executive Regulations were issued based on the known information at that time and then validate any assumptions or conﬁrm positions after the regulations were issued in November 2017. Unfortunately, in the UAE, many businesses took the wrong approach and instead waited for the regulations before even beginning this work which meant they only had one month to get ready. A few businesses were even taken by surprise by the introduction of VAT despite the fact the FTA, tax advisers and the local and business press had conducted an awareness campaign throughout 2017.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"alignleft  wp-image-8085\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/08/shutterstock_727827781-Converted-01-1024x724.png\" alt=\"\" width=\"483\" height=\"342\" />The Role of the Federal Tax Authority</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Many businesses operating in the UAE appear to have misun-derstood the role of the FTA. The FTA is a new tax authority, the legislation establishing it was published towards the end of 2016 and it only began recruiting staﬀ in the middle of 2017.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">As with any tax authority in mature tax jurisdictions, the FTA’s primary role is to administer, collect and enforce Federal taxes and apply procedures which are related to these taxes. Although it will issue technical guidance to the public on tax matters, like any tax authority, it is not responsible for advising businesses on their tax obligations or on the VAT implications of their transac-tions. Unfortunately, a number of businesses have not understood what the responsiblities of the FTA are and are currently trying to contact the FTA helpline or meet FTA representatives to obtain tax advice, although this is not part of their role. Like many tax authorities in other countries, the FTA, particularly as it is a new body, has very limited resources. With over 300,000 businesses now registered for VAT in the UAE, clearly it is not possible for the FTA to engage directly with all of them and provide tax advice particularly as this is not a part of their remit. As is the case in all other tax jurisdictions, businesses should seek tax advice from a reputable professional services ﬁrm rather than tax authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The FTA have conducted a country-wide campaign to increase awareness, through a series of seminars on VAT introduction in 2017. Given their limited resources, the scale of this campaign has been impressive and is unprecedented even by the standards of more mature tax jurisdictions. Although, some businesses may disagree, it was never realistic to expect a new tax authority like the FTA to personally visit every registered business just to tell them VAT was being introduced. The onus was also on these busi-nesses to speak to advisers and read the many articles which have been published in newspapers and business magazines on the subject.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Interpretation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is easy to mistakenly assume that since the VAT legislation has been issued now, its interpretation will be straightforward and the VAT treatment of all transactions will be clear. In many countries where VAT has been in place for some time, guidance tends to be sought from the published practice of the tax authority in the form of public notices and circulars. Case law precedent is also relied on to check how the courts have decided cases with similar facts in the past. In such countries, VAT law continues to evolve and even decades after its implementation uncertainty remains, as such, the tax authorities in these countries continue to be involved in disputes with businesses, new cases on complex VAT issues continue to be heard by the courts and new schemes are introduced to take into account unique circumstances and industry speciﬁc issues. Similar developments can be expected in the UAE as the UAE VAT legisla-tion has only been eﬀective for just over three months and there is currently no case law from which guidance can be obtained. It will also take time for the FTA’s practice to develop as they audit businesses’ VAT returns and encounter diﬀerent situations. In the future, the FTA will no doubt make further guidance available and new schemes may be announced to take account of diﬀerent industries issues. Any disputes with the FTA will be subject to a three-tier appeal system. Businesses who have a dispute with the FTA, will have the right to ask them to reconsider their decision, and the matter will then be referred to another inspector. An objec-tion against the FTA’s reconsideration decision may then be made to an independent tax disputes resolution committee made up of a judge and two tax experts. Appeals may be made against that committee’s decision to a competent court.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>What should businesses do now?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">As VAT has been implemented and ﬁling deadlines are approach-ing, the focus for businesses has shifted from VAT implementa-tion to the preparation of their ﬁrst VAT return. Companies are currently trying to identify and conﬁrm the VAT treatment of their transactions so they are able to ﬁle a complete and correct tax return. The completion of the tax return may seem a simple, straightforward task, but the department (and in some cases the individual) within the organisation who ﬁles the return on behalf of the business will be held responsible for the tax positions taken in that return regardless of whether the compliance work was outsourced. The relevant department will usually be the tax department, but it could be the legal or ﬁnance department. Given VAT is a new law, there may be uncertainty on many technical posi-tions which could create risk and this has to be taken seriously as penalties for non-compliance, including incorrect tax returns, could be as high as 300% of the tax amount due. Therefore the person responsible for this area must proactively manage this risk by obtaining professional tax advice from a reputable ﬁrm if there are uncertainties and should also document this advice for internal risk management. Going forward, it will be a challenge for FTA, tax advisers and businesses to interpret and apply the provisions of the new VAT legislation. Although VAT will involve a compliance cost for businesses, given the potential risks and penalties, it is important when ever there is uncertainty, busi-nesses work with a trusted tax adviser and navigate logically through any areas of doubt.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>For further information please contact Shiraz Khan, (s.khan@tamimi.com).</em></p>'),
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	(266004,25731,'PostTitle','E-Sports in the GCC Market'),
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	(266013,25732,'PostID','7944'),
	(266014,25732,'PostTitle','E-Sports in the GCC Market'),
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	(266016,25732,'PostType','law_update_articles'),
	(266017,25732,'PostDate','2018-08-01 07:39:51'),
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	(266021,25732,'MetaValueNew','<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignleft size-full wp-image-8019\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/2222.jpg\" alt=\"\" width=\"5219\" height=\"1750\" /></p>\r\n&nbsp;<p dir=\"LTR\" align=\"LEFT\">E-Sports (also known as electronic sports, esports, e-sports, competitive (video) gaming, professional (video) gaming, or pro gaming) are a form of competition using video games. Most commonly, e-Sports take the form of organized, multiplayer video game competitions, particularly between professional players.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The rise and popularity of electronic gaming has been rapid and organic and has been developing almost entirely independent of the usual sporting framework of national, regional and global associations, federations and regulations. Stadia are being filled for events, competitors are pursuing growing pots of prize money, sponsors are gravitating towards the events. In addition, as e-Sports are free from the demands of the pay TV ecosystem, e-Sports are being promoted through social media platforms and OTT offerings which allow for more creative content. Accordingly e-Sports is making us re-think the dynamics of how we define, manage, consume and support sport.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">While regulators, advisors and even some potential investors wrangle with these issues, e-Sports forges ahead. E-Sports will feature as several demonstration events at the upcoming 2018 Asian Games in Indonesia and are set to be full medal events at the 2022 Asian Games in China. This will create an interface for at least one facet of the sporting framework as the respective National Olympic Committees (NOCs) of participating countries, will pick the team rosters for e-Sports.</p>\r\n&nbsp;<p dir=\"LTR\" align=\"LEFT\"><strong>The e-Sports industry in the Middle East : Growth Factors</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">E-Sports in the Middle East is going through a period of rapid growth but it is still a young market with huge potential. We have seen particular strength in e-Sports at the grass roots level although there is still work to do at the more elite level in terms of regulatory support and infrastructure development. A number of successful events have been held in the region (e.g., Omni Universal Gaming, Dubai, October 2017, MEG Overwatch tournament, Dubai, May 2017, GSA E-Sports Cup, Riyadh, March 2018), yet coordination between the various leagues and event organisers has been elusive.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">There are many factors which contribute to making the Middle East a region of growth potential for e-Sports, including a relatively young population, good access to technology, high levels of engagement with social media, connection by a common language, suitability for indoor events and the presence of a solid base of interested and engaged core sponsors.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">From a growth perspective, the UAE and the Kingdom of Saudi Arabia currently stand out as the markets to watch. Both have hosted e-Sports tournaments. While the UAE has a strong reputation for developing and setting best practices and infrastructure for tournaments of all description, Saudi Arabia has a large population and its government is now also showing interest in e-Sports through the Saudi Arabian Federation for Electronic and Intellectual Sports (SAFEIS).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">As noted, the governments of the UAE and Saudi Arabia currently appear to be taking the lead on e-Sports. By way of example, the Dubai Future Foundation has as among its aims, the development of a purpose built X-Stadium dedicated to holding world class e-Sports events as part of its goal of creating a regional and global hub for e-Sports as part of its broader strategy to transform the UAE into a knowledge-based economy. In KSA meanwhile, SAFEIS and the General Sports Authority have committed to creating an all-inclusive ecosystem around e-sports in KSA - including game creators, graphic designers, publishers, broadcasters, tournament organizers, sponsors and professional players.</p>\r\n&nbsp;<p dir=\"LTR\" align=\"LEFT\"><strong>The Regulatory Environment is Key for e-Sports in the region</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The e-Sports regulatory environment in the Middle East is still in its infancy. Currently, at the amateur level, competition organisers and leagues adopt their own regulations which can vary. Encouragingly, the e-Sports Integrity Coalition (ESIC) a body positioning itself to be the recognised guardian of e-Sports integrity, last year signed up e-Sports Middle East (ESME) as a member organisation. Whether or not ESIC is an ideal umbrella entity, there is an indication that at least some elements of the industry recognize the need for a regulatory component.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">While there are many similarities, particularly across the Gulf Cooperation Council (GCC) member states, the Middle East includes a number of countries with distinct legal systems, albeit based primarily on a civil law system. Quite apart from specific sector regulatory issues, we must also be mindful that the laws of the land will apply to the hosting of events and the conduct of participants and stakeholders. Fundamental legal considerations such as compliance with advertising regulations, event safety and security legislation, visa status of players, event licensing and ticketing requirements must be considered in addition to e-Sports specific regulatory concerns regarding governance, anti-doping, match-fixing and other integrity issues.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">We take the view that, subject to proper coordination with all stakeholders, it would be beneficial for the growth and development of leagues and competitions (at minimum within the region) to adopt common standards. Like the professional advisory sector, governments have been playing catch-up in recognizing and supporting e-Sports. This factor has previously slowed growth; however, there are encouraging signs that this could soon change and government-led regulatory guidelines could be a significant component of that change and nurturing the development of the e-Sports ecosystem.</p>\r\n&nbsp;<p dir=\"LTR\" align=\"LEFT\"><strong>Challenges for e-Sports: The Road Ahead</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">As noted above, regulatory and infrastructure developments will be key drivers in establishing a global base for e-Sports in the region. Over the past several years we have seen purpose built facilities for e-Sports established in multiple cities in the United States, in London and the MLG Gaming Arena on China’s Hengqin Island. There is no credible reason why top class facilities cannot be established in the GCC. With respect to the regulatory angle, the relative absence of regulations compared to more traditional sports can be addressed with the stated support of government, working together with the industry stakeholders and advisors, to establish a framework that promotes rather than restricts development.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Tax is a potential challenge for the development of e-Sports in the region, but by no means a unique issue. VAT is currently being introduced within the GCC countries and consumers may be subject to paying VAT for purchasing online content. Telecommunications are also a potential challenge. Governments around the region are both security conscious and vigilant in protecting public morality from inappropriate content, so review mechanisms should be tailored to minimize inconvenience in the transmission of online content between various jurisdictions. Another challenge is potentially a social issue. Traditionally, the main sport in the region has been football and the recognition of e-Sports as a sport in its own right (potentially with different sub-categories for different competitions), is something that some consumers in the region have perhaps been a little slow to accept.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Structurally, in order to foster appropriate investment opportunities and to establish a basis for mid to long-term sustainability, an appropriate legal framework for the events and related marketing, broadcast, sponsorship and other revenues should be set. For a number of reasons beyond the scope of the present article, the writer would suggest this is more likely to take on a contractual rather than a shareholder or franchise model – at least initially. As the industry matures, more investible opportunities may alter this dynamic, but either way the ability to optimise commercial revenues will be central to long-term viability.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">We would suggest that none of these issues create insurmountable challenges. In fact, the recent record of rapid growth and flexibility in other dimensions of sports and events activity in the GCC suggests it could be an ideal location from which to lead global e-Sports growth. The more focus, attention and professionalism that is introduced to e-Sports and the supporting advisory sector, the more likely any obstacles to growth and diversification in e-Sports can be overcome.</p>\r\n&nbsp;<p dir=\"LTR\" align=\"LEFT\"><em>Steve leads Al Tamimi &amp; Company’s Sports and Events Management practice For further information, please contact Steve Bainbridge (s.bainbridge@tamimi.com).</em></p>'),
	(266022,25732,'MetaValueOld','<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignleft size-full wp-image-8019\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/2222.jpg\" alt=\"\" width=\"5219\" height=\"1750\" />E-Sports (also known as electronic sports, esports, e-sports, competitive (video) gaming, professional (video) gaming, or pro gaming) are a form of competition using video games. Most commonly, e-Sports take the form of organized, multiplayer video game competitions, particularly between professional players.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The rise and popularity of electronic gaming has been rapid and organic and has been developing almost entirely independent of the usual sporting framework of national, regional and global associations, federations and regulations. Stadia are being filled for events, competitors are pursuing growing pots of prize money, sponsors are gravitating towards the events. In addition, as e-Sports are free from the demands of the pay TV ecosystem, e-Sports are being promoted through social media platforms and OTT offerings which allow for more creative content. Accordingly e-Sports is making us re-think the dynamics of how we define, manage, consume and support sport.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">While regulators, advisors and even some potential investors wrangle with these issues, e-Sports forges ahead. E-Sports will feature as several demonstration events at the upcoming 2018 Asian Games in Indonesia and are set to be full medal events at the 2022 Asian Games in China. This will create an interface for at least one facet of the sporting framework as the respective National Olympic Committees (NOCs) of participating countries, will pick the team rosters for e-Sports.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>The e-Sports industry in the Middle East : Growth Factors</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">E-Sports in the Middle East is going through a period of rapid growth but it is still a young market with huge potential. We have seen particular strength in e-Sports at the grass roots level although there is still work to do at the more elite level in terms of regulatory support and infrastructure development. A number of successful events have been held in the region (e.g., Omni Universal Gaming, Dubai, October 2017, MEG Overwatch tournament, Dubai, May 2017, GSA E-Sports Cup, Riyadh, March 2018), yet coordination between the various leagues and event organisers has been elusive.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">There are many factors which contribute to making the Middle East a region of growth potential for e-Sports, including a relatively young population, good access to technology, high levels of engagement with social media, connection by a common language, suitability for indoor events and the presence of a solid base of interested and engaged core sponsors.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">From a growth perspective, the UAE and the Kingdom of Saudi Arabia currently stand out as the markets to watch. Both have hosted e-Sports tournaments. While the UAE has a strong reputation for developing and setting best practices and infrastructure for tournaments of all description, Saudi Arabia has a large population and its government is now also showing interest in e-Sports through the Saudi Arabian Federation for Electronic and Intellectual Sports (SAFEIS).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">As noted, the governments of the UAE and Saudi Arabia currently appear to be taking the lead on e-Sports. By way of example, the Dubai Future Foundation has as among its aims, the development of a purpose built X-Stadium dedicated to holding world class e-Sports events as part of its goal of creating a regional and global hub for e-Sports as part of its broader strategy to transform the UAE into a knowledge-based economy. In KSA meanwhile, SAFEIS and the General Sports Authority have committed to creating an all-inclusive ecosystem around e-sports in KSA - including game creators, graphic designers, publishers, broadcasters, tournament organizers, sponsors and professional players.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>The Regulatory Environment is Key for e-Sports in the region</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The e-Sports regulatory environment in the Middle East is still in its infancy. Currently, at the amateur level, competition organisers and leagues adopt their own regulations which can vary. Encouragingly, the e-Sports Integrity Coalition (ESIC) a body positioning itself to be the recognised guardian of e-Sports integrity, last year signed up e-Sports Middle East (ESME) as a member organisation. Whether or not ESIC is an ideal umbrella entity, there is an indication that at least some elements of the industry recognize the need for a regulatory component.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">While there are many similarities, particularly across the Gulf Cooperation Council (GCC) member states, the Middle East includes a number of countries with distinct legal systems, albeit based primarily on a civil law system. Quite apart from specific sector regulatory issues, we must also be mindful that the laws of the land will apply to the hosting of events and the conduct of participants and stakeholders. Fundamental legal considerations such as compliance with advertising regulations, event safety and security legislation, visa status of players, event licensing and ticketing requirements must be considered in addition to e-Sports specific regulatory concerns regarding governance, anti-doping, match-fixing and other integrity issues.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">We take the view that, subject to proper coordination with all stakeholders, it would be beneficial for the growth and development of leagues and competitions (at minimum within the region) to adopt common standards. Like the professional advisory sector, governments have been playing catch-up in recognizing and supporting e-Sports. This factor has previously slowed growth; however, there are encouraging signs that this could soon change and government-led regulatory guidelines could be a significant component of that change and nurturing the development of the e-Sports ecosystem.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Challenges for e-Sports: The Road Ahead</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">As noted above, regulatory and infrastructure developments will be key drivers in establishing a global base for e-Sports in the region. Over the past several years we have seen purpose built facilities for e-Sports established in multiple cities in the United States, in London and the MLG Gaming Arena on China’s Hengqin Island. There is no credible reason why top class facilities cannot be established in the GCC. With respect to the regulatory angle, the relative absence of regulations compared to more traditional sports can be addressed with the stated support of government, working together with the industry stakeholders and advisors, to establish a framework that promotes rather than restricts development.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Tax is a potential challenge for the development of e-Sports in the region, but by no means a unique issue. VAT is currently being introduced within the GCC countries and consumers may be subject to paying VAT for purchasing online content. Telecommunications are also a potential challenge. Governments around the region are both security conscious and vigilant in protecting public morality from inappropriate content, so review mechanisms should be tailored to minimize inconvenience in the transmission of online content between various jurisdictions. Another challenge is potentially a social issue. Traditionally, the main sport in the region has been football and the recognition of e-Sports as a sport in its own right (potentially with different sub-categories for different competitions), is something that some consumers in the region have perhaps been a little slow to accept.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Structurally, in order to foster appropriate investment opportunities and to establish a basis for mid to long-term sustainability, an appropriate legal framework for the events and related marketing, broadcast, sponsorship and other revenues should be set. For a number of reasons beyond the scope of the present article, the writer would suggest this is more likely to take on a contractual rather than a shareholder or franchise model – at least initially. As the industry matures, more investible opportunities may alter this dynamic, but either way the ability to optimise commercial revenues will be central to long-term viability.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">We would suggest that none of these issues create insurmountable challenges. In fact, the recent record of rapid growth and flexibility in other dimensions of sports and events activity in the GCC suggests it could be an ideal location from which to lead global e-Sports growth. The more focus, attention and professionalism that is introduced to e-Sports and the supporting advisory sector, the more likely any obstacles to growth and diversification in e-Sports can be overcome.</p>\r\n<em>Steve leads Al Tamimi &amp; Company’s Sports and Events Management practice For further information, please contact Steve Bainbridge (s.bainbridge@tamimi.com).</em>'),
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	(266025,25732,'ReportText','<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignleft size-full wp-image-8019\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/2222.jpg\" alt=\"\" width=\"5219\" height=\"1750\" />E-Sports (also known as electronic sports, esports, e-sports, competitive (video) gaming, professional (video) gaming, or pro gaming) are a form of competition using video games. Most commonly, e-Sports take the form of organized, multiplayer video game competitions, particularly between professional players.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The rise and popularity of electronic gaming has been rapid and organic and has been developing almost entirely independent of the usual sporting framework of national, regional and global associations, federations and regulations. Stadia are being filled for events, competitors are pursuing growing pots of prize money, sponsors are gravitating towards the events. In addition, as e-Sports are free from the demands of the pay TV ecosystem, e-Sports are being promoted through social media platforms and OTT offerings which allow for more creative content. Accordingly e-Sports is making us re-think the dynamics of how we define, manage, consume and support sport.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">While regulators, advisors and even some potential investors wrangle with these issues, e-Sports forges ahead. E-Sports will feature as several demonstration events at the upcoming 2018 Asian Games in Indonesia and are set to be full medal events at the 2022 Asian Games in China. This will create an interface for at least one facet of the sporting framework as the respective National Olympic Committees (NOCs) of participating countries, will pick the team rosters for e-Sports.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>The e-Sports industry in the Middle East : Growth Factors</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">E-Sports in the Middle East is going through a period of rapid growth but it is still a young market with huge potential. We have seen particular strength in e-Sports at the grass roots level although there is still work to do at the more elite level in terms of regulatory support and infrastructure development. A number of successful events have been held in the region (e.g., Omni Universal Gaming, Dubai, October 2017, MEG Overwatch tournament, Dubai, May 2017, GSA E-Sports Cup, Riyadh, March 2018), yet coordination between the various leagues and event organisers has been elusive.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">There are many factors which contribute to making the Middle East a region of growth potential for e-Sports, including a relatively young population, good access to technology, high levels of engagement with social media, connection by a common language, suitability for indoor events and the presence of a solid base of interested and engaged core sponsors.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">From a growth perspective, the UAE and the Kingdom of Saudi Arabia currently stand out as the markets to watch. Both have hosted e-Sports tournaments. While the UAE has a strong reputation for developing and setting best practices and infrastructure for tournaments of all description, Saudi Arabia has a large population and its government is now also showing interest in e-Sports through the Saudi Arabian Federation for Electronic and Intellectual Sports (SAFEIS).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">As noted, the governments of the UAE and Saudi Arabia currently appear to be taking the lead on e-Sports. By way of example, the Dubai Future Foundation has as among its aims, the development of a purpose built X-Stadium dedicated to holding world class e-Sports events as part of its goal of creating a regional and global hub for e-Sports as part of its broader strategy to transform the UAE into a knowledge-based economy. In KSA meanwhile, SAFEIS and the General Sports Authority have committed to creating an all-inclusive ecosystem around e-sports in KSA - including game creators, graphic designers, publishers, broadcasters, tournament organizers, sponsors and professional players.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>The Regulatory Environment is Key for e-Sports in the region</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The e-Sports regulatory environment in the Middle East is still in its infancy. Currently, at the amateur level, competition organisers and leagues adopt their own regulations which can vary. Encouragingly, the e-Sports Integrity Coalition (ESIC) a body positioning itself to be the recognised guardian of e-Sports integrity, last year signed up e-Sports Middle East (ESME) as a member organisation. Whether or not ESIC is an ideal umbrella entity, there is an indication that at least some elements of the industry recognize the need for a regulatory component.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">While there are many similarities, particularly across the Gulf Cooperation Council (GCC) member states, the Middle East includes a number of countries with distinct legal systems, albeit based primarily on a civil law system. Quite apart from specific sector regulatory issues, we must also be mindful that the laws of the land will apply to the hosting of events and the conduct of participants and stakeholders. Fundamental legal considerations such as compliance with advertising regulations, event safety and security legislation, visa status of players, event licensing and ticketing requirements must be considered in addition to e-Sports specific regulatory concerns regarding governance, anti-doping, match-fixing and other integrity issues.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">We take the view that, subject to proper coordination with all stakeholders, it would be beneficial for the growth and development of leagues and competitions (at minimum within the region) to adopt common standards. Like the professional advisory sector, governments have been playing catch-up in recognizing and supporting e-Sports. This factor has previously slowed growth; however, there are encouraging signs that this could soon change and government-led regulatory guidelines could be a significant component of that change and nurturing the development of the e-Sports ecosystem.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Challenges for e-Sports: The Road Ahead</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">As noted above, regulatory and infrastructure developments will be key drivers in establishing a global base for e-Sports in the region. Over the past several years we have seen purpose built facilities for e-Sports established in multiple cities in the United States, in London and the MLG Gaming Arena on China’s Hengqin Island. There is no credible reason why top class facilities cannot be established in the GCC. With respect to the regulatory angle, the relative absence of regulations compared to more traditional sports can be addressed with the stated support of government, working together with the industry stakeholders and advisors, to establish a framework that promotes rather than restricts development.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Tax is a potential challenge for the development of e-Sports in the region, but by no means a unique issue. VAT is currently being introduced within the GCC countries and consumers may be subject to paying VAT for purchasing online content. Telecommunications are also a potential challenge. Governments around the region are both security conscious and vigilant in protecting public morality from inappropriate content, so review mechanisms should be tailored to minimize inconvenience in the transmission of online content between various jurisdictions. Another challenge is potentially a social issue. Traditionally, the main sport in the region has been football and the recognition of e-Sports as a sport in its own right (potentially with different sub-categories for different competitions), is something that some consumers in the region have perhaps been a little slow to accept.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Structurally, in order to foster appropriate investment opportunities and to establish a basis for mid to long-term sustainability, an appropriate legal framework for the events and related marketing, broadcast, sponsorship and other revenues should be set. For a number of reasons beyond the scope of the present article, the writer would suggest this is more likely to take on a contractual rather than a shareholder or franchise model – at least initially. As the industry matures, more investible opportunities may alter this dynamic, but either way the ability to optimise commercial revenues will be central to long-term viability.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">We would suggest that none of these issues create insurmountable challenges. In fact, the recent record of rapid growth and flexibility in other dimensions of sports and events activity in the GCC suggests it could be an ideal location from which to lead global e-Sports growth. The more focus, attention and professionalism that is introduced to e-Sports and the supporting advisory sector, the more likely any obstacles to growth and diversification in e-Sports can be overcome.</p>\r\n<em>Steve leads Al Tamimi &amp; Company’s Sports and Events Management practice For further information, please contact Steve Bainbridge (s.bainbridge@tamimi.com).</em>|<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignleft size-full wp-image-8019\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/2222.jpg\" alt=\"\" width=\"5219\" height=\"1750\" /></p>\r\n&nbsp;<p dir=\"LTR\" align=\"LEFT\">E-Sports (also known as electronic sports, esports, e-sports, competitive (video) gaming, professional (video) gaming, or pro gaming) are a form of competition using video games. Most commonly, e-Sports take the form of organized, multiplayer video game competitions, particularly between professional players.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The rise and popularity of electronic gaming has been rapid and organic and has been developing almost entirely independent of the usual sporting framework of national, regional and global associations, federations and regulations. Stadia are being filled for events, competitors are pursuing growing pots of prize money, sponsors are gravitating towards the events. In addition, as e-Sports are free from the demands of the pay TV ecosystem, e-Sports are being promoted through social media platforms and OTT offerings which allow for more creative content. Accordingly e-Sports is making us re-think the dynamics of how we define, manage, consume and support sport.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">While regulators, advisors and even some potential investors wrangle with these issues, e-Sports forges ahead. E-Sports will feature as several demonstration events at the upcoming 2018 Asian Games in Indonesia and are set to be full medal events at the 2022 Asian Games in China. This will create an interface for at least one facet of the sporting framework as the respective National Olympic Committees (NOCs) of participating countries, will pick the team rosters for e-Sports.</p>\r\n&nbsp;<p dir=\"LTR\" align=\"LEFT\"><strong>The e-Sports industry in the Middle East : Growth Factors</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">E-Sports in the Middle East is going through a period of rapid growth but it is still a young market with huge potential. We have seen particular strength in e-Sports at the grass roots level although there is still work to do at the more elite level in terms of regulatory support and infrastructure development. A number of successful events have been held in the region (e.g., Omni Universal Gaming, Dubai, October 2017, MEG Overwatch tournament, Dubai, May 2017, GSA E-Sports Cup, Riyadh, March 2018), yet coordination between the various leagues and event organisers has been elusive.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">There are many factors which contribute to making the Middle East a region of growth potential for e-Sports, including a relatively young population, good access to technology, high levels of engagement with social media, connection by a common language, suitability for indoor events and the presence of a solid base of interested and engaged core sponsors.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">From a growth perspective, the UAE and the Kingdom of Saudi Arabia currently stand out as the markets to watch. Both have hosted e-Sports tournaments. While the UAE has a strong reputation for developing and setting best practices and infrastructure for tournaments of all description, Saudi Arabia has a large population and its government is now also showing interest in e-Sports through the Saudi Arabian Federation for Electronic and Intellectual Sports (SAFEIS).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">As noted, the governments of the UAE and Saudi Arabia currently appear to be taking the lead on e-Sports. By way of example, the Dubai Future Foundation has as among its aims, the development of a purpose built X-Stadium dedicated to holding world class e-Sports events as part of its goal of creating a regional and global hub for e-Sports as part of its broader strategy to transform the UAE into a knowledge-based economy. In KSA meanwhile, SAFEIS and the General Sports Authority have committed to creating an all-inclusive ecosystem around e-sports in KSA - including game creators, graphic designers, publishers, broadcasters, tournament organizers, sponsors and professional players.</p>\r\n&nbsp;<p dir=\"LTR\" align=\"LEFT\"><strong>The Regulatory Environment is Key for e-Sports in the region</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The e-Sports regulatory environment in the Middle East is still in its infancy. Currently, at the amateur level, competition organisers and leagues adopt their own regulations which can vary. Encouragingly, the e-Sports Integrity Coalition (ESIC) a body positioning itself to be the recognised guardian of e-Sports integrity, last year signed up e-Sports Middle East (ESME) as a member organisation. Whether or not ESIC is an ideal umbrella entity, there is an indication that at least some elements of the industry recognize the need for a regulatory component.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">While there are many similarities, particularly across the Gulf Cooperation Council (GCC) member states, the Middle East includes a number of countries with distinct legal systems, albeit based primarily on a civil law system. Quite apart from specific sector regulatory issues, we must also be mindful that the laws of the land will apply to the hosting of events and the conduct of participants and stakeholders. Fundamental legal considerations such as compliance with advertising regulations, event safety and security legislation, visa status of players, event licensing and ticketing requirements must be considered in addition to e-Sports specific regulatory concerns regarding governance, anti-doping, match-fixing and other integrity issues.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">We take the view that, subject to proper coordination with all stakeholders, it would be beneficial for the growth and development of leagues and competitions (at minimum within the region) to adopt common standards. Like the professional advisory sector, governments have been playing catch-up in recognizing and supporting e-Sports. This factor has previously slowed growth; however, there are encouraging signs that this could soon change and government-led regulatory guidelines could be a significant component of that change and nurturing the development of the e-Sports ecosystem.</p>\r\n&nbsp;<p dir=\"LTR\" align=\"LEFT\"><strong>Challenges for e-Sports: The Road Ahead</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">As noted above, regulatory and infrastructure developments will be key drivers in establishing a global base for e-Sports in the region. Over the past several years we have seen purpose built facilities for e-Sports established in multiple cities in the United States, in London and the MLG Gaming Arena on China’s Hengqin Island. There is no credible reason why top class facilities cannot be established in the GCC. With respect to the regulatory angle, the relative absence of regulations compared to more traditional sports can be addressed with the stated support of government, working together with the industry stakeholders and advisors, to establish a framework that promotes rather than restricts development.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Tax is a potential challenge for the development of e-Sports in the region, but by no means a unique issue. VAT is currently being introduced within the GCC countries and consumers may be subject to paying VAT for purchasing online content. Telecommunications are also a potential challenge. Governments around the region are both security conscious and vigilant in protecting public morality from inappropriate content, so review mechanisms should be tailored to minimize inconvenience in the transmission of online content between various jurisdictions. Another challenge is potentially a social issue. Traditionally, the main sport in the region has been football and the recognition of e-Sports as a sport in its own right (potentially with different sub-categories for different competitions), is something that some consumers in the region have perhaps been a little slow to accept.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Structurally, in order to foster appropriate investment opportunities and to establish a basis for mid to long-term sustainability, an appropriate legal framework for the events and related marketing, broadcast, sponsorship and other revenues should be set. For a number of reasons beyond the scope of the present article, the writer would suggest this is more likely to take on a contractual rather than a shareholder or franchise model – at least initially. As the industry matures, more investible opportunities may alter this dynamic, but either way the ability to optimise commercial revenues will be central to long-term viability.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">We would suggest that none of these issues create insurmountable challenges. In fact, the recent record of rapid growth and flexibility in other dimensions of sports and events activity in the GCC suggests it could be an ideal location from which to lead global e-Sports growth. The more focus, attention and professionalism that is introduced to e-Sports and the supporting advisory sector, the more likely any obstacles to growth and diversification in e-Sports can be overcome.</p>\r\n&nbsp;<p dir=\"LTR\" align=\"LEFT\"><em>Steve leads Al Tamimi &amp; Company’s Sports and Events Management practice For further information, please contact Steve Bainbridge (s.bainbridge@tamimi.com).</em></p>'),
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	(266064,25736,'PostTitle','Getting to Grips with VAT Implementation'),
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	(266067,25736,'PostDate','2018-08-01 07:40:24'),
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	(266071,25736,'MetaValueNew','<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8016 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/21-379x1024.jpg\" alt=\"\" width=\"305\" height=\"824\" />The introduction of VAT in the UAE at the start of 2018, was a major change for businesses, Shiraz Khan of Al Tamimi &amp; Company looks back on how they should have tackled the implementation phase and what their priorities should be going forward.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The UAE’s VAT system is broadly based on common prin-ciples that have been agreed by all GCC countries in the Uniﬁed GCC VAT Agreement. These include certain ar-eas which all the individual GCC countries are required to follow. For example, the mandatory and voluntary registration thresholds were set by the GCC VAT Agreement. The standard VAT rate of 5% was also ﬁxed by the GCC VAT Agreement across the GCC. However, individual GCC countries do have some freedom to determine the application of VAT on some matters such as the VAT treatment of certain sectors and industries.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>UAE Legislation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">UAE VAT legislation is made up of Federal Decree Law No. 8/2017 on VAT (the VAT Law) and Cabinet Decision No. 52/2017 on the Executive Regulations to the VAT Law (VAT Executive Regula-tions). The Federal Decree-Law No. 8/2017, which was published in August 2017, sets out the UAE VAT rules. The Executive Regula-tions which were issued in November 2017 deal with the detailed application of the VAT Law’s provisions.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition, the Federal Tax Authority (FTA), which was formed under Federal Decree-Law No. 13/ 2016 on the Establishment of the FTA is responsible for the administration, management, collection and enforcement of VAT and all other current and future Federal taxes. At present VAT and excise tax are the only taxes at the Federal level. Federal Law No. 7/2017 for Tax Procedures and Cabinet Decision No. 36/2017 on the Executive Regulations on Tax Procedures are also relevant in this context as they provide a procedural framework that is applied across all Federal Taxes. This includes details and requirements related to tax registra-tion, ﬁling of tax returns and settlement of taxes, tax audits, appeals and penalties as well as FTA and taxpayers’ rights and obligations.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Implementation Challenges</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of VAT was a major change for businesses operating in the UAE. In order to prepare for it, busi-nesses had to complete a number of steps before VAT came into force. These included analysing the impact of VAT on their operations and across many diﬀer-ent functions including Legal, Finance, IT, Human Resources, Procurement, Sales, Marketing and Strategy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Businesses had to review and deter-mine the VAT treatment of all their sales and purchase transactions and understand their resulting compli-ance obligations. In addition, they had to assess the capability of their existing IT system or software to produce auto-matic VAT reporting and consider if an upgrade would be suﬃcient or they would need a whole new system. It was also important for organisa-tions to make changes to their business processes, including invoicing and record keeping so they were compliant with the new VAT legislation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">From a legal perspective, it was necessary to review existing contracts with customers to check if they needed to renegotiate contracts which had no VAT clause in order to avoid bearing any VAT cost. They also had to check that all new contracts dealt with the application of VAT and set out which party was responsible for bearing the VAT liability.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In order to achieve this objective and manage relationships with customers, communication with customers was required. It was also important to communicate with suppliers to ensure they were going to issue VAT compliant invoices which would facilitate the recovery of VAT. Finally, businesses had to evaluate the cash ﬂow implications and their working capital requirements as a result of now having to pay VAT before they received payments from customers.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">All in all, a signiﬁcant amount of work had to be undertaken by businesses to be ready for VAT. In other jurisdictions such as Malaysia when a similar goods or services tax (known as GST) was implemented, companies there typically needed around six to 18 months to prepare for the change depending on the size and complexity of their operations and transactions.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Preparation Time</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Although some of the large multinational groups in the UAE began their preparations in 2016 or in the beginning of 2017, many busi-nesses in the UAE took a reactive approach instead and decided to wait until the publication of the complete VAT legislation in November before taking any action. There was also an expectation or possibly a hope in the UAE business community that the imple-mentation of VAT would be delayed by the UAE Government based on previous experience in the UAE. (Although, this was despite an indication from the FTA in early 2017 that VAT would be imple-mented on 1 January 2018 and the fact the VAT Law also conﬁrmed that VAT would be implemented by this date when it was published in August 2017.)</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In hindsight, once the UAE Government had taken a decision to implement VAT on 1 January 2018 and this fact was conﬁrmed by the VAT law, businesses could have done more and been more proactive with their VAT preparations. VAT is not a new tax and it or a similar tax exists in more than 160 other countries around the globe. In addition, the UAE VAT law is is largely based on the EU VAT rules and Malaysian GST system. In addition, the GCC VAT Agreement on which UAE VAT legislation was based was also published in the ﬁrst half of 2017. So as far as the UAE is concerned, although the ﬁnal VAT Executive Regulations were not published until November 2017, most of the information in these regulations had already been made available by the FTA earlier in the year as part of an awareness campaign. So, a signiﬁcant amount of information was already available in the public domain even before the VAT Executive Regulations were published and it was suﬃcient to enable businesses to begin their preparations. In fact, most of the information in the VAT Executive Regulations was already known before these Regulations were issued. It would have been better for businesses to begin preparation before the VAT Executive Regulations were issued based on the known information at that time and then validate any assumptions or conﬁrm positions after the regulations were issued in November 2017. Unfortunately, in the UAE, many businesses took the wrong approach and instead waited for the regulations before even beginning this work which meant they only had one month to get ready. A few businesses were even taken by surprise by the introduction of VAT despite the fact the FTA, tax advisers and the local and business press had conducted an awareness campaign throughout 2017.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"alignleft wp-image-8085\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/08/shutterstock_727827781-Converted-01-1024x724.png\" alt=\"\" width=\"409\" height=\"289\" />The Role of the Federal Tax Authority</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Many businesses operating in the UAE appear to have misun-derstood the role of the FTA. The FTA is a new tax authority, the legislation establishing it was published towards the end of 2016 and it only began recruiting staﬀ in the middle of 2017.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">As with any tax authority in mature tax jurisdictions, the FTA’s primary role is to administer, collect and enforce Federal taxes and apply procedures which are related to these taxes. Although it will issue technical guidance to the public on tax matters, like any tax authority, it is not responsible for advising businesses on their tax obligations or on the VAT implications of their transac-tions. Unfortunately, a number of businesses have not understood what the responsiblities of the FTA are and are currently trying to contact the FTA helpline or meet FTA representatives to obtain tax advice, although this is not part of their role. Like many tax authorities in other countries, the FTA, particularly as it is a new body, has very limited resources. With over 300,000 businesses now registered for VAT in the UAE, clearly it is not possible for the FTA to engage directly with all of them and provide tax advice particularly as this is not a part of their remit. As is the case in all other tax jurisdictions, businesses should seek tax advice from a reputable professional services ﬁrm rather than tax authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The FTA have conducted a country-wide campaign to increase awareness, through a series of seminars on VAT introduction in 2017. Given their limited resources, the scale of this campaign has been impressive and is unprecedented even by the standards of more mature tax jurisdictions. Although, some businesses may disagree, it was never realistic to expect a new tax authority like the FTA to personally visit every registered business just to tell them VAT was being introduced. The onus was also on these busi-nesses to speak to advisers and read the many articles which have been published in newspapers and business magazines on the subject.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Interpretation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is easy to mistakenly assume that since the VAT legislation has been issued now, its interpretation will be straightforward and the VAT treatment of all transactions will be clear. In many countries where VAT has been in place for some time, guidance tends to be sought from the published practice of the tax authority in the form of public notices and circulars. Case law precedent is also relied on to check how the courts have decided cases with similar facts in the past. In such countries, VAT law continues to evolve and even decades after its implementation uncertainty remains, as such, the tax authorities in these countries continue to be involved in disputes with businesses, new cases on complex VAT issues continue to be heard by the courts and new schemes are introduced to take into account unique circumstances and industry speciﬁc issues. Similar developments can be expected in the UAE as the UAE VAT legisla-tion has only been eﬀective for just over three months and there is currently no case law from which guidance can be obtained. It will also take time for the FTA’s practice to develop as they audit businesses’ VAT returns and encounter diﬀerent situations. In the future, the FTA will no doubt make further guidance available and new schemes may be announced to take account of diﬀerent industries issues. Any disputes with the FTA will be subject to a three-tier appeal system. Businesses who have a dispute with the FTA, will have the right to ask them to reconsider their decision, and the matter will then be referred to another inspector. An objec-tion against the FTA’s reconsideration decision may then be made to an independent tax disputes resolution committee made up of a judge and two tax experts. Appeals may be made against that committee’s decision to a competent court.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>What should businesses do now?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">As VAT has been implemented and ﬁling deadlines are approach-ing, the focus for businesses has shifted from VAT implementa-tion to the preparation of their ﬁrst VAT return. Companies are currently trying to identify and conﬁrm the VAT treatment of their transactions so they are able to ﬁle a complete and correct tax return. The completion of the tax return may seem a simple, straightforward task, but the department (and in some cases the individual) within the organisation who ﬁles the return on behalf of the business will be held responsible for the tax positions taken in that return regardless of whether the compliance work was outsourced. The relevant department will usually be the tax department, but it could be the legal or ﬁnance department. Given VAT is a new law, there may be uncertainty on many technical posi-tions which could create risk and this has to be taken seriously as penalties for non-compliance, including incorrect tax returns, could be as high as 300% of the tax amount due. Therefore the person responsible for this area must proactively manage this risk by obtaining professional tax advice from a reputable ﬁrm if there are uncertainties and should also document this advice for internal risk management. Going forward, it will be a challenge for FTA, tax advisers and businesses to interpret and apply the provisions of the new VAT legislation. Although VAT will involve a compliance cost for businesses, given the potential risks and penalties, it is important when ever there is uncertainty, busi-nesses work with a trusted tax adviser and navigate logically through any areas of doubt.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>For further information please contact Shiraz Khan, (s.khan@tamimi.com).</em></p>'),
	(266072,25736,'MetaValueOld','<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8016 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/21-379x1024.jpg\" alt=\"\" width=\"305\" height=\"824\" />The introduction of VAT in the UAE at the start of 2018, was a major change for businesses, Shiraz Khan of Al Tamimi &amp; Company looks back on how they should have tackled the implementation phase and what their priorities should be going forward.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The UAE’s VAT system is broadly based on common prin-ciples that have been agreed by all GCC countries in the Uniﬁed GCC VAT Agreement. These include certain ar-eas which all the individual GCC countries are required to follow. For example, the mandatory and voluntary registration thresholds were set by the GCC VAT Agreement. The standard VAT rate of 5% was also ﬁxed by the GCC VAT Agreement across the GCC. However, individual GCC countries do have some freedom to determine the application of VAT on some matters such as the VAT treatment of certain sectors and industries.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>UAE Legislation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">UAE VAT legislation is made up of Federal Decree Law No. 8/2017 on VAT (the VAT Law) and Cabinet Decision No. 52/2017 on the Executive Regulations to the VAT Law (VAT Executive Regula-tions). The Federal Decree-Law No. 8/2017, which was published in August 2017, sets out the UAE VAT rules. The Executive Regula-tions which were issued in November 2017 deal with the detailed application of the VAT Law’s provisions.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition, the Federal Tax Authority (FTA), which was formed under Federal Decree-Law No. 13/ 2016 on the Establishment of the FTA is responsible for the administration, management, collection and enforcement of VAT and all other current and future Federal taxes. At present VAT and excise tax are the only taxes at the Federal level. Federal Law No. 7/2017 for Tax Procedures and Cabinet Decision No. 36/2017 on the Executive Regulations on Tax Procedures are also relevant in this context as they provide a procedural framework that is applied across all Federal Taxes. This includes details and requirements related to tax registra-tion, ﬁling of tax returns and settlement of taxes, tax audits, appeals and penalties as well as FTA and taxpayers’ rights and obligations.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Implementation Challenges</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of VAT was a major change for businesses operating in the UAE. In order to prepare for it, busi-nesses had to complete a number of steps before VAT came into force. These included analysing the impact of VAT on their operations and across many diﬀer-ent functions including Legal, Finance, IT, Human Resources, Procurement, Sales, Marketing and Strategy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Businesses had to review and deter-mine the VAT treatment of all their sales and purchase transactions and understand their resulting compli-ance obligations. In addition, they had to assess the capability of their existing IT system or software to produce auto-matic VAT reporting and consider if an upgrade would be suﬃcient or they would need a whole new system. It was also important for organisa-tions to make changes to their business processes, including invoicing and record keeping so they were compliant with the new VAT legislation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">From a legal perspective, it was necessary to review existing contracts with customers to check if they needed to renegotiate contracts which had no VAT clause in order to avoid bearing any VAT cost. They also had to check that all new contracts dealt with the application of VAT and set out which party was responsible for bearing the VAT liability.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In order to achieve this objective and manage relationships with customers, communication with customers was required. It was also important to communicate with suppliers to ensure they were going to issue VAT compliant invoices which would facilitate the recovery of VAT. Finally, businesses had to evaluate the cash ﬂow implications and their working capital requirements as a result of now having to pay VAT before they received payments from customers.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">All in all, a signiﬁcant amount of work had to be undertaken by businesses to be ready for VAT. In other jurisdictions such as Malaysia when a similar goods or services tax (known as GST) was implemented, companies there typically needed around six to 18 months to prepare for the change depending on the size and complexity of their operations and transactions.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Preparation Time</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Although some of the large multinational groups in the UAE began their preparations in 2016 or in the beginning of 2017, many busi-nesses in the UAE took a reactive approach instead and decided to wait until the publication of the complete VAT legislation in November before taking any action. There was also an expectation or possibly a hope in the UAE business community that the imple-mentation of VAT would be delayed by the UAE Government based on previous experience in the UAE. (Although, this was despite an indication from the FTA in early 2017 that VAT would be imple-mented on 1 January 2018 and the fact the VAT Law also conﬁrmed that VAT would be implemented by this date when it was published in August 2017.)</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In hindsight, once the UAE Government had taken a decision to implement VAT on 1 January 2018 and this fact was conﬁrmed by the VAT law, businesses could have done more and been more proactive with their VAT preparations. VAT is not a new tax and it or a similar tax exists in more than 160 other countries around the globe. In addition, the UAE VAT law is is largely based on the EU VAT rules and Malaysian GST system. In addition, the GCC VAT Agreement on which UAE VAT legislation was based was also published in the ﬁrst half of 2017. So as far as the UAE is concerned, although the ﬁnal VAT Executive Regulations were not published until November 2017, most of the information in these regulations had already been made available by the FTA earlier in the year as part of an awareness campaign. So, a signiﬁcant amount of information was already available in the public domain even before the VAT Executive Regulations were published and it was suﬃcient to enable businesses to begin their preparations. In fact, most of the information in the VAT Executive Regulations was already known before these Regulations were issued. It would have been better for businesses to begin preparation before the VAT Executive Regulations were issued based on the known information at that time and then validate any assumptions or conﬁrm positions after the regulations were issued in November 2017. Unfortunately, in the UAE, many businesses took the wrong approach and instead waited for the regulations before even beginning this work which meant they only had one month to get ready. A few businesses were even taken by surprise by the introduction of VAT despite the fact the FTA, tax advisers and the local and business press had conducted an awareness campaign throughout 2017.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"alignleft  wp-image-8085\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/08/shutterstock_727827781-Converted-01-1024x724.png\" alt=\"\" width=\"483\" height=\"342\" />The Role of the Federal Tax Authority</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Many businesses operating in the UAE appear to have misun-derstood the role of the FTA. The FTA is a new tax authority, the legislation establishing it was published towards the end of 2016 and it only began recruiting staﬀ in the middle of 2017.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">As with any tax authority in mature tax jurisdictions, the FTA’s primary role is to administer, collect and enforce Federal taxes and apply procedures which are related to these taxes. Although it will issue technical guidance to the public on tax matters, like any tax authority, it is not responsible for advising businesses on their tax obligations or on the VAT implications of their transac-tions. Unfortunately, a number of businesses have not understood what the responsiblities of the FTA are and are currently trying to contact the FTA helpline or meet FTA representatives to obtain tax advice, although this is not part of their role. Like many tax authorities in other countries, the FTA, particularly as it is a new body, has very limited resources. With over 300,000 businesses now registered for VAT in the UAE, clearly it is not possible for the FTA to engage directly with all of them and provide tax advice particularly as this is not a part of their remit. As is the case in all other tax jurisdictions, businesses should seek tax advice from a reputable professional services ﬁrm rather than tax authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The FTA have conducted a country-wide campaign to increase awareness, through a series of seminars on VAT introduction in 2017. Given their limited resources, the scale of this campaign has been impressive and is unprecedented even by the standards of more mature tax jurisdictions. Although, some businesses may disagree, it was never realistic to expect a new tax authority like the FTA to personally visit every registered business just to tell them VAT was being introduced. The onus was also on these busi-nesses to speak to advisers and read the many articles which have been published in newspapers and business magazines on the subject.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Interpretation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is easy to mistakenly assume that since the VAT legislation has been issued now, its interpretation will be straightforward and the VAT treatment of all transactions will be clear. In many countries where VAT has been in place for some time, guidance tends to be sought from the published practice of the tax authority in the form of public notices and circulars. Case law precedent is also relied on to check how the courts have decided cases with similar facts in the past. In such countries, VAT law continues to evolve and even decades after its implementation uncertainty remains, as such, the tax authorities in these countries continue to be involved in disputes with businesses, new cases on complex VAT issues continue to be heard by the courts and new schemes are introduced to take into account unique circumstances and industry speciﬁc issues. Similar developments can be expected in the UAE as the UAE VAT legisla-tion has only been eﬀective for just over three months and there is currently no case law from which guidance can be obtained. It will also take time for the FTA’s practice to develop as they audit businesses’ VAT returns and encounter diﬀerent situations. In the future, the FTA will no doubt make further guidance available and new schemes may be announced to take account of diﬀerent industries issues. Any disputes with the FTA will be subject to a three-tier appeal system. Businesses who have a dispute with the FTA, will have the right to ask them to reconsider their decision, and the matter will then be referred to another inspector. An objec-tion against the FTA’s reconsideration decision may then be made to an independent tax disputes resolution committee made up of a judge and two tax experts. Appeals may be made against that committee’s decision to a competent court.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>What should businesses do now?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">As VAT has been implemented and ﬁling deadlines are approach-ing, the focus for businesses has shifted from VAT implementa-tion to the preparation of their ﬁrst VAT return. Companies are currently trying to identify and conﬁrm the VAT treatment of their transactions so they are able to ﬁle a complete and correct tax return. The completion of the tax return may seem a simple, straightforward task, but the department (and in some cases the individual) within the organisation who ﬁles the return on behalf of the business will be held responsible for the tax positions taken in that return regardless of whether the compliance work was outsourced. The relevant department will usually be the tax department, but it could be the legal or ﬁnance department. Given VAT is a new law, there may be uncertainty on many technical posi-tions which could create risk and this has to be taken seriously as penalties for non-compliance, including incorrect tax returns, could be as high as 300% of the tax amount due. Therefore the person responsible for this area must proactively manage this risk by obtaining professional tax advice from a reputable ﬁrm if there are uncertainties and should also document this advice for internal risk management. Going forward, it will be a challenge for FTA, tax advisers and businesses to interpret and apply the provisions of the new VAT legislation. Although VAT will involve a compliance cost for businesses, given the potential risks and penalties, it is important when ever there is uncertainty, busi-nesses work with a trusted tax adviser and navigate logically through any areas of doubt.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>For further information please contact Shiraz Khan, (s.khan@tamimi.com).</em></p>'),
	(266073,25736,'MetaLink','content'),
	(266074,25736,'EditorLinkPost','http://localhost:8888/tamimi/wp-admin/post.php?post=7942&amp;action=edit'),
	(266075,25736,'ReportText','<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8016 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/21-379x1024.jpg\" alt=\"\" width=\"305\" height=\"824\" />The introduction of VAT in the UAE at the start of 2018, was a major change for businesses, Shiraz Khan of Al Tamimi &amp; Company looks back on how they should have tackled the implementation phase and what their priorities should be going forward.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The UAE’s VAT system is broadly based on common prin-ciples that have been agreed by all GCC countries in the Uniﬁed GCC VAT Agreement. These include certain ar-eas which all the individual GCC countries are required to follow. For example, the mandatory and voluntary registration thresholds were set by the GCC VAT Agreement. The standard VAT rate of 5% was also ﬁxed by the GCC VAT Agreement across the GCC. However, individual GCC countries do have some freedom to determine the application of VAT on some matters such as the VAT treatment of certain sectors and industries.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>UAE Legislation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">UAE VAT legislation is made up of Federal Decree Law No. 8/2017 on VAT (the VAT Law) and Cabinet Decision No. 52/2017 on the Executive Regulations to the VAT Law (VAT Executive Regula-tions). The Federal Decree-Law No. 8/2017, which was published in August 2017, sets out the UAE VAT rules. The Executive Regula-tions which were issued in November 2017 deal with the detailed application of the VAT Law’s provisions.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition, the Federal Tax Authority (FTA), which was formed under Federal Decree-Law No. 13/ 2016 on the Establishment of the FTA is responsible for the administration, management, collection and enforcement of VAT and all other current and future Federal taxes. At present VAT and excise tax are the only taxes at the Federal level. Federal Law No. 7/2017 for Tax Procedures and Cabinet Decision No. 36/2017 on the Executive Regulations on Tax Procedures are also relevant in this context as they provide a procedural framework that is applied across all Federal Taxes. This includes details and requirements related to tax registra-tion, ﬁling of tax returns and settlement of taxes, tax audits, appeals and penalties as well as FTA and taxpayers’ rights and obligations.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Implementation Challenges</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of VAT was a major change for businesses operating in the UAE. In order to prepare for it, busi-nesses had to complete a number of steps before VAT came into force. These included analysing the impact of VAT on their operations and across many diﬀer-ent functions including Legal, Finance, IT, Human Resources, Procurement, Sales, Marketing and Strategy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Businesses had to review and deter-mine the VAT treatment of all their sales and purchase transactions and understand their resulting compli-ance obligations. In addition, they had to assess the capability of their existing IT system or software to produce auto-matic VAT reporting and consider if an upgrade would be suﬃcient or they would need a whole new system. It was also important for organisa-tions to make changes to their business processes, including invoicing and record keeping so they were compliant with the new VAT legislation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">From a legal perspective, it was necessary to review existing contracts with customers to check if they needed to renegotiate contracts which had no VAT clause in order to avoid bearing any VAT cost. They also had to check that all new contracts dealt with the application of VAT and set out which party was responsible for bearing the VAT liability.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In order to achieve this objective and manage relationships with customers, communication with customers was required. It was also important to communicate with suppliers to ensure they were going to issue VAT compliant invoices which would facilitate the recovery of VAT. Finally, businesses had to evaluate the cash ﬂow implications and their working capital requirements as a result of now having to pay VAT before they received payments from customers.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">All in all, a signiﬁcant amount of work had to be undertaken by businesses to be ready for VAT. In other jurisdictions such as Malaysia when a similar goods or services tax (known as GST) was implemented, companies there typically needed around six to 18 months to prepare for the change depending on the size and complexity of their operations and transactions.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Preparation Time</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Although some of the large multinational groups in the UAE began their preparations in 2016 or in the beginning of 2017, many busi-nesses in the UAE took a reactive approach instead and decided to wait until the publication of the complete VAT legislation in November before taking any action. There was also an expectation or possibly a hope in the UAE business community that the imple-mentation of VAT would be delayed by the UAE Government based on previous experience in the UAE. (Although, this was despite an indication from the FTA in early 2017 that VAT would be imple-mented on 1 January 2018 and the fact the VAT Law also conﬁrmed that VAT would be implemented by this date when it was published in August 2017.)</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In hindsight, once the UAE Government had taken a decision to implement VAT on 1 January 2018 and this fact was conﬁrmed by the VAT law, businesses could have done more and been more proactive with their VAT preparations. VAT is not a new tax and it or a similar tax exists in more than 160 other countries around the globe. In addition, the UAE VAT law is is largely based on the EU VAT rules and Malaysian GST system. In addition, the GCC VAT Agreement on which UAE VAT legislation was based was also published in the ﬁrst half of 2017. So as far as the UAE is concerned, although the ﬁnal VAT Executive Regulations were not published until November 2017, most of the information in these regulations had already been made available by the FTA earlier in the year as part of an awareness campaign. So, a signiﬁcant amount of information was already available in the public domain even before the VAT Executive Regulations were published and it was suﬃcient to enable businesses to begin their preparations. In fact, most of the information in the VAT Executive Regulations was already known before these Regulations were issued. It would have been better for businesses to begin preparation before the VAT Executive Regulations were issued based on the known information at that time and then validate any assumptions or conﬁrm positions after the regulations were issued in November 2017. Unfortunately, in the UAE, many businesses took the wrong approach and instead waited for the regulations before even beginning this work which meant they only had one month to get ready. A few businesses were even taken by surprise by the introduction of VAT despite the fact the FTA, tax advisers and the local and business press had conducted an awareness campaign throughout 2017.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"alignleft  wp-image-8085\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/08/shutterstock_727827781-Converted-01-1024x724.png\" alt=\"\" width=\"483\" height=\"342\" />The Role of the Federal Tax Authority</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Many businesses operating in the UAE appear to have misun-derstood the role of the FTA. The FTA is a new tax authority, the legislation establishing it was published towards the end of 2016 and it only began recruiting staﬀ in the middle of 2017.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">As with any tax authority in mature tax jurisdictions, the FTA’s primary role is to administer, collect and enforce Federal taxes and apply procedures which are related to these taxes. Although it will issue technical guidance to the public on tax matters, like any tax authority, it is not responsible for advising businesses on their tax obligations or on the VAT implications of their transac-tions. Unfortunately, a number of businesses have not understood what the responsiblities of the FTA are and are currently trying to contact the FTA helpline or meet FTA representatives to obtain tax advice, although this is not part of their role. Like many tax authorities in other countries, the FTA, particularly as it is a new body, has very limited resources. With over 300,000 businesses now registered for VAT in the UAE, clearly it is not possible for the FTA to engage directly with all of them and provide tax advice particularly as this is not a part of their remit. As is the case in all other tax jurisdictions, businesses should seek tax advice from a reputable professional services ﬁrm rather than tax authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The FTA have conducted a country-wide campaign to increase awareness, through a series of seminars on VAT introduction in 2017. Given their limited resources, the scale of this campaign has been impressive and is unprecedented even by the standards of more mature tax jurisdictions. Although, some businesses may disagree, it was never realistic to expect a new tax authority like the FTA to personally visit every registered business just to tell them VAT was being introduced. The onus was also on these busi-nesses to speak to advisers and read the many articles which have been published in newspapers and business magazines on the subject.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Interpretation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is easy to mistakenly assume that since the VAT legislation has been issued now, its interpretation will be straightforward and the VAT treatment of all transactions will be clear. In many countries where VAT has been in place for some time, guidance tends to be sought from the published practice of the tax authority in the form of public notices and circulars. Case law precedent is also relied on to check how the courts have decided cases with similar facts in the past. In such countries, VAT law continues to evolve and even decades after its implementation uncertainty remains, as such, the tax authorities in these countries continue to be involved in disputes with businesses, new cases on complex VAT issues continue to be heard by the courts and new schemes are introduced to take into account unique circumstances and industry speciﬁc issues. Similar developments can be expected in the UAE as the UAE VAT legisla-tion has only been eﬀective for just over three months and there is currently no case law from which guidance can be obtained. It will also take time for the FTA’s practice to develop as they audit businesses’ VAT returns and encounter diﬀerent situations. In the future, the FTA will no doubt make further guidance available and new schemes may be announced to take account of diﬀerent industries issues. Any disputes with the FTA will be subject to a three-tier appeal system. Businesses who have a dispute with the FTA, will have the right to ask them to reconsider their decision, and the matter will then be referred to another inspector. An objec-tion against the FTA’s reconsideration decision may then be made to an independent tax disputes resolution committee made up of a judge and two tax experts. Appeals may be made against that committee’s decision to a competent court.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>What should businesses do now?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">As VAT has been implemented and ﬁling deadlines are approach-ing, the focus for businesses has shifted from VAT implementa-tion to the preparation of their ﬁrst VAT return. Companies are currently trying to identify and conﬁrm the VAT treatment of their transactions so they are able to ﬁle a complete and correct tax return. The completion of the tax return may seem a simple, straightforward task, but the department (and in some cases the individual) within the organisation who ﬁles the return on behalf of the business will be held responsible for the tax positions taken in that return regardless of whether the compliance work was outsourced. The relevant department will usually be the tax department, but it could be the legal or ﬁnance department. Given VAT is a new law, there may be uncertainty on many technical posi-tions which could create risk and this has to be taken seriously as penalties for non-compliance, including incorrect tax returns, could be as high as 300% of the tax amount due. Therefore the person responsible for this area must proactively manage this risk by obtaining professional tax advice from a reputable ﬁrm if there are uncertainties and should also document this advice for internal risk management. Going forward, it will be a challenge for FTA, tax advisers and businesses to interpret and apply the provisions of the new VAT legislation. Although VAT will involve a compliance cost for businesses, given the potential risks and penalties, it is important when ever there is uncertainty, busi-nesses work with a trusted tax adviser and navigate logically through any areas of doubt.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>For further information please contact Shiraz Khan, (s.khan@tamimi.com).</em></p>|<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8016 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/21-379x1024.jpg\" alt=\"\" width=\"305\" height=\"824\" />The introduction of VAT in the UAE at the start of 2018, was a major change for businesses, Shiraz Khan of Al Tamimi &amp; Company looks back on how they should have tackled the implementation phase and what their priorities should be going forward.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The UAE’s VAT system is broadly based on common prin-ciples that have been agreed by all GCC countries in the Uniﬁed GCC VAT Agreement. These include certain ar-eas which all the individual GCC countries are required to follow. For example, the mandatory and voluntary registration thresholds were set by the GCC VAT Agreement. The standard VAT rate of 5% was also ﬁxed by the GCC VAT Agreement across the GCC. However, individual GCC countries do have some freedom to determine the application of VAT on some matters such as the VAT treatment of certain sectors and industries.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>UAE Legislation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">UAE VAT legislation is made up of Federal Decree Law No. 8/2017 on VAT (the VAT Law) and Cabinet Decision No. 52/2017 on the Executive Regulations to the VAT Law (VAT Executive Regula-tions). The Federal Decree-Law No. 8/2017, which was published in August 2017, sets out the UAE VAT rules. The Executive Regula-tions which were issued in November 2017 deal with the detailed application of the VAT Law’s provisions.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition, the Federal Tax Authority (FTA), which was formed under Federal Decree-Law No. 13/ 2016 on the Establishment of the FTA is responsible for the administration, management, collection and enforcement of VAT and all other current and future Federal taxes. At present VAT and excise tax are the only taxes at the Federal level. Federal Law No. 7/2017 for Tax Procedures and Cabinet Decision No. 36/2017 on the Executive Regulations on Tax Procedures are also relevant in this context as they provide a procedural framework that is applied across all Federal Taxes. This includes details and requirements related to tax registra-tion, ﬁling of tax returns and settlement of taxes, tax audits, appeals and penalties as well as FTA and taxpayers’ rights and obligations.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Implementation Challenges</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of VAT was a major change for businesses operating in the UAE. In order to prepare for it, busi-nesses had to complete a number of steps before VAT came into force. These included analysing the impact of VAT on their operations and across many diﬀer-ent functions including Legal, Finance, IT, Human Resources, Procurement, Sales, Marketing and Strategy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Businesses had to review and deter-mine the VAT treatment of all their sales and purchase transactions and understand their resulting compli-ance obligations. In addition, they had to assess the capability of their existing IT system or software to produce auto-matic VAT reporting and consider if an upgrade would be suﬃcient or they would need a whole new system. It was also important for organisa-tions to make changes to their business processes, including invoicing and record keeping so they were compliant with the new VAT legislation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">From a legal perspective, it was necessary to review existing contracts with customers to check if they needed to renegotiate contracts which had no VAT clause in order to avoid bearing any VAT cost. They also had to check that all new contracts dealt with the application of VAT and set out which party was responsible for bearing the VAT liability.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In order to achieve this objective and manage relationships with customers, communication with customers was required. It was also important to communicate with suppliers to ensure they were going to issue VAT compliant invoices which would facilitate the recovery of VAT. Finally, businesses had to evaluate the cash ﬂow implications and their working capital requirements as a result of now having to pay VAT before they received payments from customers.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">All in all, a signiﬁcant amount of work had to be undertaken by businesses to be ready for VAT. In other jurisdictions such as Malaysia when a similar goods or services tax (known as GST) was implemented, companies there typically needed around six to 18 months to prepare for the change depending on the size and complexity of their operations and transactions.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Preparation Time</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Although some of the large multinational groups in the UAE began their preparations in 2016 or in the beginning of 2017, many busi-nesses in the UAE took a reactive approach instead and decided to wait until the publication of the complete VAT legislation in November before taking any action. There was also an expectation or possibly a hope in the UAE business community that the imple-mentation of VAT would be delayed by the UAE Government based on previous experience in the UAE. (Although, this was despite an indication from the FTA in early 2017 that VAT would be imple-mented on 1 January 2018 and the fact the VAT Law also conﬁrmed that VAT would be implemented by this date when it was published in August 2017.)</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In hindsight, once the UAE Government had taken a decision to implement VAT on 1 January 2018 and this fact was conﬁrmed by the VAT law, businesses could have done more and been more proactive with their VAT preparations. VAT is not a new tax and it or a similar tax exists in more than 160 other countries around the globe. In addition, the UAE VAT law is is largely based on the EU VAT rules and Malaysian GST system. In addition, the GCC VAT Agreement on which UAE VAT legislation was based was also published in the ﬁrst half of 2017. So as far as the UAE is concerned, although the ﬁnal VAT Executive Regulations were not published until November 2017, most of the information in these regulations had already been made available by the FTA earlier in the year as part of an awareness campaign. So, a signiﬁcant amount of information was already available in the public domain even before the VAT Executive Regulations were published and it was suﬃcient to enable businesses to begin their preparations. In fact, most of the information in the VAT Executive Regulations was already known before these Regulations were issued. It would have been better for businesses to begin preparation before the VAT Executive Regulations were issued based on the known information at that time and then validate any assumptions or conﬁrm positions after the regulations were issued in November 2017. Unfortunately, in the UAE, many businesses took the wrong approach and instead waited for the regulations before even beginning this work which meant they only had one month to get ready. A few businesses were even taken by surprise by the introduction of VAT despite the fact the FTA, tax advisers and the local and business press had conducted an awareness campaign throughout 2017.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"alignleft wp-image-8085\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/08/shutterstock_727827781-Converted-01-1024x724.png\" alt=\"\" width=\"409\" height=\"289\" />The Role of the Federal Tax Authority</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Many businesses operating in the UAE appear to have misun-derstood the role of the FTA. The FTA is a new tax authority, the legislation establishing it was published towards the end of 2016 and it only began recruiting staﬀ in the middle of 2017.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">As with any tax authority in mature tax jurisdictions, the FTA’s primary role is to administer, collect and enforce Federal taxes and apply procedures which are related to these taxes. Although it will issue technical guidance to the public on tax matters, like any tax authority, it is not responsible for advising businesses on their tax obligations or on the VAT implications of their transac-tions. Unfortunately, a number of businesses have not understood what the responsiblities of the FTA are and are currently trying to contact the FTA helpline or meet FTA representatives to obtain tax advice, although this is not part of their role. Like many tax authorities in other countries, the FTA, particularly as it is a new body, has very limited resources. With over 300,000 businesses now registered for VAT in the UAE, clearly it is not possible for the FTA to engage directly with all of them and provide tax advice particularly as this is not a part of their remit. As is the case in all other tax jurisdictions, businesses should seek tax advice from a reputable professional services ﬁrm rather than tax authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The FTA have conducted a country-wide campaign to increase awareness, through a series of seminars on VAT introduction in 2017. Given their limited resources, the scale of this campaign has been impressive and is unprecedented even by the standards of more mature tax jurisdictions. Although, some businesses may disagree, it was never realistic to expect a new tax authority like the FTA to personally visit every registered business just to tell them VAT was being introduced. The onus was also on these busi-nesses to speak to advisers and read the many articles which have been published in newspapers and business magazines on the subject.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Interpretation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is easy to mistakenly assume that since the VAT legislation has been issued now, its interpretation will be straightforward and the VAT treatment of all transactions will be clear. In many countries where VAT has been in place for some time, guidance tends to be sought from the published practice of the tax authority in the form of public notices and circulars. Case law precedent is also relied on to check how the courts have decided cases with similar facts in the past. In such countries, VAT law continues to evolve and even decades after its implementation uncertainty remains, as such, the tax authorities in these countries continue to be involved in disputes with businesses, new cases on complex VAT issues continue to be heard by the courts and new schemes are introduced to take into account unique circumstances and industry speciﬁc issues. Similar developments can be expected in the UAE as the UAE VAT legisla-tion has only been eﬀective for just over three months and there is currently no case law from which guidance can be obtained. It will also take time for the FTA’s practice to develop as they audit businesses’ VAT returns and encounter diﬀerent situations. In the future, the FTA will no doubt make further guidance available and new schemes may be announced to take account of diﬀerent industries issues. Any disputes with the FTA will be subject to a three-tier appeal system. Businesses who have a dispute with the FTA, will have the right to ask them to reconsider their decision, and the matter will then be referred to another inspector. An objec-tion against the FTA’s reconsideration decision may then be made to an independent tax disputes resolution committee made up of a judge and two tax experts. Appeals may be made against that committee’s decision to a competent court.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>What should businesses do now?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">As VAT has been implemented and ﬁling deadlines are approach-ing, the focus for businesses has shifted from VAT implementa-tion to the preparation of their ﬁrst VAT return. Companies are currently trying to identify and conﬁrm the VAT treatment of their transactions so they are able to ﬁle a complete and correct tax return. The completion of the tax return may seem a simple, straightforward task, but the department (and in some cases the individual) within the organisation who ﬁles the return on behalf of the business will be held responsible for the tax positions taken in that return regardless of whether the compliance work was outsourced. The relevant department will usually be the tax department, but it could be the legal or ﬁnance department. Given VAT is a new law, there may be uncertainty on many technical posi-tions which could create risk and this has to be taken seriously as penalties for non-compliance, including incorrect tax returns, could be as high as 300% of the tax amount due. Therefore the person responsible for this area must proactively manage this risk by obtaining professional tax advice from a reputable ﬁrm if there are uncertainties and should also document this advice for internal risk management. Going forward, it will be a challenge for FTA, tax advisers and businesses to interpret and apply the provisions of the new VAT legislation. Although VAT will involve a compliance cost for businesses, given the potential risks and penalties, it is important when ever there is uncertainty, busi-nesses work with a trusted tax adviser and navigate logically through any areas of doubt.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>For further information please contact Shiraz Khan, (s.khan@tamimi.com).</em></p>'),
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	(266104,25739,'PostTitle','From Stadion to E-Gaming in the UAE: A look at Stadium'),
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	(266126,25741,'PostTitle','From Stadion to E-Gaming in the UAE: A look at Stadium'),
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	(266128,25741,'PostDate','2018-08-01 07:38:18'),
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	(266136,25742,'PostTitle','From Stadion to E-Gaming in the UAE: A look at Stadium'),
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	(266143,25742,'MetaValueNew','<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"alignright size-full wp-image-8021\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/12323.jpg\" alt=\"\" width=\"4272\" height=\"1747\" /></strong></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">A brief history of stadiums</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The origins of stadiums lie in Ancient Greece in the 8th Century BC where a \"stadion’ (or \"stadium\" in its translated Latin form) was a unit of measurement approximately 200 metres in length. The name of stadion referred to both the elongated U-shaped track of the same length and the sprint race that was run along its distance. The tracks were usually surrounded by rudimentary stands that were sometimes built into hillsides or surrounded by artificial embankments of stone steps in order for spectators to view the race.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Romans later advanced the development of stadiums with the \"circus\", which had a similar, open-ended horseshoe shape to the stadion, but which was used for horse and chariot racing. However, the familiar modern day design was really started with the amphitheatre, which could accommodate much larger crowds, was often multi-tiered and wrapped around the often gruesome gladiatorial, venatio (animal hunts) and naumachia (staged naval battles to the death involving condemned prisoners) events put on for mass entertainment in a circle of blood thirsty noise.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">With the fall of the Roman Empire, \"sports\" and their associated facilities also fell into a steep decline during the Middle Ages with the world more pre-occupied with other matters – with jousting being a notable anomaly.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It was not until the late 19th Century, with large scale urbanisation and the huge growth in organised sports such as football, rugby and cricket in the UK and baseball in the United States, that the modern era of the stadium began and which drew upon its ancient roots. Although the sportsmen on the field of play now managed to escape with their lives, football stadiums in the UK, at least, retained much of the \"red in tooth and claw\" atmosphere of their Roman ancestors right up to as recently as the end of the 1980s.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">My own first experience of attending a stadium was as a child with my father in 1987 standing in the Gallowgate End at St James’ Park watching Newcastle United inflict a very rare 2-1 victory over Manchester United. The memories of that day remain very vivid – the pitch, the ear-splitting volume of the chants, the soggy meat pies, watching Gazza do his stuff as a young 19 year-old, Gordon Strachan’s long range equaliser on the stroke of half time (with the ball remaining ominously lodged in the top right stanchion of the goal in front of me for the whole of the half time interval) and Paul Goddard’s 90th minute winner which sent the place ballistic in a primeval frenzy – all of which was simultaneously pretty intoxicating and slightly terrifying for a 10 year old.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">As Nick Hornby describes of his first football match in his 1992 novel Fever Pitch, an autobiographical account of his lifelong obsession with Arsenal FC:</p>\r\n<p dir=\"LTR\" align=\"LEFT\">\"All I saw on the day was a bewildering chain of incomprehensible incidents ... I remember the overwhelming maleness of it all – cigar and pipe smoke, foul language ... I’d been to public entertainments before, of course ... but that was different. The audiences I had hithero been a part of had paid to have a good time and, though occasionally one might spot a fidgety child or yawning adult, I hadn’t ever noticed faces contorted by rage or despair or frustration. Entertainment as pain was an idea entirely new to me\".</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, change was afoot. The design of football stadiums and related health and safety legislation in the UK were subject to a massive overhaul following a series of tragedies such as Hillsborough, the Bradford City fire and the Heysel Stadium disaster in the 1980s. Such catastrophes highlighted fatal flaws in stadium design and crowd control at such time. As a result, standing areas were removed from stadiums, which became all-seaters, and an era of much safer, comfortable and more family friendly stadiums was ushered in. The new designs also led to the commercialisation of the stadium with the introduction of hospitality areas and services, acoustics and lighting fit for TV purposes, the hosting of alternative events such as music concerts, and additional commercial facilities such as food and beverage outlets, hotels and conference rooms – all of which increased the frequency and diversity of stadium use.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>A view from pitch side</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Talking of Manchester United, I spoke with Dan Schofield, Head of Venue Operations at Old Trafford and self-confessed stadium geek on the current state of play. Dan provided me with the following insights:</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"Stadium development is such a hot topic at the moment in the football industry with clubs jostling and jockeying for position in bringing the newest and best developments in the quest for commercial gain, footballing excellence and fan experience. The big challenge for us all is to find the right balance of each of those elements and different clubs have taken differing approaches. Some, such as Liverpool, FC Barcelona and Sheffield United are looking at modernising existing stadiums whilst others, including Tottenham Hotspur, Everton and Chelsea are spending huge amounts on developing completely new stadiums. To justify these huge outlays in capital expenditure clubs are looking to \"sweat the asset\" and stage as many different events and activities as they can in the stadium. If managed well the non-matchday business can be as lucrative as the matchday business.</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>If you take a deep-dive in to the new White Hart Lane development, for example, you will see that Spurs have incorporated a skywalk, abseil and a huge Museum experience - all to bolster the non-matchday revenue generating potential of the facility. That is in addition to an average of 27 homes games (across all competitions) and a number of NFL games and concerts which they have contracted to take place. This diversification is always a balancing act between bringing in commercially viable events whilst not impacting on the footballing performance on the pitch. It’s been fascinating to follow the development at Spurs and in particular the retractable pitch they are implementing which will enable them to host NFL games and concerts on an artificial surface whilst the football surface is retracted out of the stadium on a series of mechanical trays, rails and hoists.</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>I’m very fortunate that my role heading up the venue operations at Manchester United allows me to visit stadiums all over the world and I make a point of trying to learn something from every venue we visit. I’m particularly looking forward to a trip to Michigan at the end of July where we are playing a pre-season tour game at the 107,000 capacity \"Big House\" stadium. Every stadium you visit is different and having joked about it for years I’ve certainly got enough Stadium based anecdotes to write a book called \"Around the World in 80 Stadiums\" which one day I may well do….. I recently added a new stadium I want to visit to my bucket-list with the Ekaterinburg Arena in Russia in its World Cup guise with its 147 foot high temporary scaffold stands literally outside the stadium with part of the perimeter cut out allowing fans to see the game. You look at photos, scratch your head and question how it’s possible and I’d love to visit and have a proper stomp all over it in person.</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>I’m blessed with a fantastic facility in the 75,000 capacity Old Trafford and it’s a fantastic time to be involved in the stadium industry with a number of exciting developments happening all over the world and new ones being announced on an almost weekly basis. I’d recommend for anyone interested in the subject to sign-up to a couple of industry newsletters which help keep you abreast of developments and changes in the global stadium industry, I’d particularly recommend www.stadia-magazine.com and www.sportindustry.biz \"</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"wp-image-8007 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/shutterstock_421751620-1024x682.jpg\" alt=\"\" width=\"470\" height=\"313\" />E-gaming stadiums</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">As for the future, stadiums will continue to evolve - becoming safer and more technologically sophisticated, diverse in their uses and sustainable; often built with iconic designs (see Qatar 2022) that provide a focal point for cities that are instantly recognisable internationally. They can also help to rejuvenate the economy and attract business in previously run down areas of a city in which they are anchored.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">One example of such evolution in the digital age is with the new phenomena of e-sports stadiums, where professional gamers compete with each other in front of a live audience. Such stadiums are already operational in the United States, China and South Korea and have a huge potential in terms of audience numbers and revenue.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">With a plethora of international standard stadiums already built and construction of the new Dubai Arena well underway, Dubai, ever at the cutting edge of building design and digital technology and soon to be host of EXPO 2020, has also announced the Dubai X-Stadium, a new e-gaming stadium being developed through a joint initiative between Dubai Media Office and TECOM Group.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The features and design of such e-gaming stadiums diverge from traditional stadiums, most notably in that all the action is on huge high definition screens rather than the audience focus being on the competitors, who may be squirreled away in separate booths during play. Use of holographic displays and augmented and virtual reality are also likely to play a significant part in the audience’s experience. Fans are also likely to have a much less sedentary, static relationship with the games – with the freedom to circulate within the stadium and experience other zones and outlets catering to the modern tastes of a new generation - soggy meat pies are likely to be thin on the ground.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Some UAE real estate legal considerations</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"We don’t want people to leave the stadium until the game finishes\"</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Jurgen Klopp, manager of Liverpool FC in 2016</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In the UAE, there are a number of mixed use, master communities that have a stadium as their focal point or as a prominent feature such as Sports City and Motor City in Dubai, Yas Island in Abu Dhabi and Hazza Bin Zayed Stadium in Al Ain (home of Al Ain F.C).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Developers of such cornerstone plots in such developments will often be granted certain concessions in terms of master community fees in light of the fact that use of such facilities is more intermittent than standard commercial use and that they serve as a key attractor to investors, retailers and third party purchasers of residential property within the master community. Any such concessions should be expressly disclosed to third party purchasers by the master developer prior to the parties entering into a sale and purchase agreement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition, although you would think that any such third party purchasers of residential property or commercial tenants would be well aware of potential infringements upon their use and enjoyment of their properties within such a stadium focussed master community, it would also be prudent of master developers to cover off the risk of any nuisance related claims. This may include express wording contained in the relevant master community declaration (which typically purchasers are bound by through the signing of a declaration of adherence upon purchase) or lease whereby a purchaser/tenant acknowledges and waives any claims relating to such matters as traffic congestion, noise and light pollution.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Another issue for retail tenants in stadium facilities are conflicts that may arise with the landlord/stadium owner’s sponsors – particularly in relation to special, one off events taking place at the stadium. It is therefore not unusual to find provisions in such leases whereby the landlord reserves rights to impose signage and branding blackouts or restrictions on the sale of goods or services during certain times when a conflict arises with sponsors. This can be a tricky issue and needs to be carefully managed and negotiated up front in the lease. Often with leases where tenants that have a particular connection to the type of sport practised at the stadium, the lease itself may be just a part of a wider commercial deal with the stadium and this may assist with negotiations.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Stadiums should also have good standard forms of venue hire agreements and short term kiosk type agreements in place. One issue to be considered is the potential effect of landlord and tenant laws in the UAE on such agreements. Unlike in the UK for example, where the case of Street v Mountford [1985] established that the legal distinction between a lease and an occupational licence is whether or not the tenant enjoys \"exclusive possession\" of the premises, there is no such distinction under UAE law. A short term occupational licence, even if it is described as such on its face and contains express wording that the parties do not intend to create a lease or a relationship of landlord or tenant, is therefore likely to be considered a lease if the question is brought before judicial authorities. This is significant as this will mean that the so called \"licence\" will be subject to landlord and tenant legislation which, in onshore Dubai for example, is generally very tenant friendly in terms of the rights of the landlord to terminate, renewal and security of tenure for tenants. Nevertheless, on a case by case basis depending on the circumstances, certain structuring of the relevant agreement can potentially help to mitigate the risk of it being caught by local landlord and tenant laws.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">...... and there goes the full time whistle.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>For further information please contact Ian Arnott (i.arnott@tamimi.com)</em></p>'),
	(266144,25742,'MetaValueOld','<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"alignright size-full wp-image-8021\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/12323.jpg\" alt=\"\" width=\"4272\" height=\"1747\" />A brief history of stadiums</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The origins of stadiums lie in Ancient Greece in the 8th Century BC where a \"stadion’ (or \"stadium\" in its translated Latin form) was a unit of measurement approximately 200 metres in length. The name of stadion referred to both the elongated U-shaped track of the same length and the sprint race that was run along its distance. The tracks were usually surrounded by rudimentary stands that were sometimes built into hillsides or surrounded by artificial embankments of stone steps in order for spectators to view the race.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Romans later advanced the development of stadiums with the \"circus\", which had a similar, open-ended horseshoe shape to the stadion, but which was used for horse and chariot racing. However, the familiar modern day design was really started with the amphitheatre, which could accommodate much larger crowds, was often multi-tiered and wrapped around the often gruesome gladiatorial, venatio (animal hunts) and naumachia (staged naval battles to the death involving condemned prisoners) events put on for mass entertainment in a circle of blood thirsty noise.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">With the fall of the Roman Empire, \"sports\" and their associated facilities also fell into a steep decline during the Middle Ages with the world more pre-occupied with other matters – with jousting being a notable anomaly.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It was not until the late 19th Century, with large scale urbanisation and the huge growth in organised sports such as football, rugby and cricket in the UK and baseball in the United States, that the modern era of the stadium began and which drew upon its ancient roots. Although the sportsmen on the field of play now managed to escape with their lives, football stadiums in the UK, at least, retained much of the \"red in tooth and claw\" atmosphere of their Roman ancestors right up to as recently as the end of the 1980s.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">My own first experience of attending a stadium was as a child with my father in 1987 standing in the Gallowgate End at St James’ Park watching Newcastle United inflict a very rare 2-1 victory over Manchester United. The memories of that day remain very vivid – the pitch, the ear-splitting volume of the chants, the soggy meat pies, watching Gazza do his stuff as a young 19 year-old, Gordon Strachan’s long range equaliser on the stroke of half time (with the ball remaining ominously lodged in the top right stanchion of the goal in front of me for the whole of the half time interval) and Paul Goddard’s 90th minute winner which sent the place ballistic in a primeval frenzy – all of which was simultaneously pretty intoxicating and slightly terrifying for a 10 year old.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">As Nick Hornby describes of his first football match in his 1992 novel Fever Pitch, an autobiographical account of his lifelong obsession with Arsenal FC:</p>\r\n<p dir=\"LTR\" align=\"LEFT\">\"All I saw on the day was a bewildering chain of incomprehensible incidents ... I remember the overwhelming maleness of it all – cigar and pipe smoke, foul language ... I’d been to public entertainments before, of course ... but that was different. The audiences I had hithero been a part of had paid to have a good time and, though occasionally one might spot a fidgety child or yawning adult, I hadn’t ever noticed faces contorted by rage or despair or frustration. Entertainment as pain was an idea entirely new to me\".</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, change was afoot. The design of football stadiums and related health and safety legislation in the UK were subject to a massive overhaul following a series of tragedies such as Hillsborough, the Bradford City fire and the Heysel Stadium disaster in the 1980s. Such catastrophes highlighted fatal flaws in stadium design and crowd control at such time. As a result, standing areas were removed from stadiums, which became all-seaters, and an era of much safer, comfortable and more family friendly stadiums was ushered in. The new designs also led to the commercialisation of the stadium with the introduction of hospitality areas and services, acoustics and lighting fit for TV purposes, the hosting of alternative events such as music concerts, and additional commercial facilities such as food and beverage outlets, hotels and conference rooms – all of which increased the frequency and diversity of stadium use.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>A view from pitch side</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Talking of Manchester United, I spoke with Dan Schofield, Head of Venue Operations at Old Trafford and self-confessed stadium geek on the current state of play. Dan provided me with the following insights:</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"Stadium development is such a hot topic at the moment in the football industry with clubs jostling and jockeying for position in bringing the newest and best developments in the quest for commercial gain, footballing excellence and fan experience. The big challenge for us all is to find the right balance of each of those elements and different clubs have taken differing approaches. Some, such as Liverpool, FC Barcelona and Sheffield United are looking at modernising existing stadiums whilst others, including Tottenham Hotspur, Everton and Chelsea are spending huge amounts on developing completely new stadiums. To justify these huge outlays in capital expenditure clubs are looking to \"sweat the asset\" and stage as many different events and activities as they can in the stadium. If managed well the non-matchday business can be as lucrative as the matchday business.</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>If you take a deep-dive in to the new White Hart Lane development, for example, you will see that Spurs have incorporated a skywalk, abseil and a huge Museum experience - all to bolster the non-matchday revenue generating potential of the facility. That is in addition to an average of 27 homes games (across all competitions) and a number of NFL games and concerts which they have contracted to take place. This diversification is always a balancing act between bringing in commercially viable events whilst not impacting on the footballing performance on the pitch. It’s been fascinating to follow the development at Spurs and in particular the retractable pitch they are implementing which will enable them to host NFL games and concerts on an artificial surface whilst the football surface is retracted out of the stadium on a series of mechanical trays, rails and hoists.</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>I’m very fortunate that my role heading up the venue operations at Manchester United allows me to visit stadiums all over the world and I make a point of trying to learn something from every venue we visit. I’m particularly looking forward to a trip to Michigan at the end of July where we are playing a pre-season tour game at the 107,000 capacity \"Big House\" stadium. Every stadium you visit is different and having joked about it for years I’ve certainly got enough Stadium based anecdotes to write a book called \"Around the World in 80 Stadiums\" which one day I may well do….. I recently added a new stadium I want to visit to my bucket-list with the Ekaterinburg Arena in Russia in its World Cup guise with its 147 foot high temporary scaffold stands literally outside the stadium with part of the perimeter cut out allowing fans to see the game. You look at photos, scratch your head and question how it’s possible and I’d love to visit and have a proper stomp all over it in person.</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>I’m blessed with a fantastic facility in the 75,000 capacity Old Trafford and it’s a fantastic time to be involved in the stadium industry with a number of exciting developments happening all over the world and new ones being announced on an almost weekly basis. I’d recommend for anyone interested in the subject to sign-up to a couple of industry newsletters which help keep you abreast of developments and changes in the global stadium industry, I’d particularly recommend www.stadia-magazine.com and www.sportindustry.biz \"</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"wp-image-8007  alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/shutterstock_421751620-1024x682.jpg\" alt=\"\" width=\"470\" height=\"313\" />E-gaming stadiums</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">As for the future, stadiums will continue to evolve - becoming safer and more technologically sophisticated, diverse in their uses and sustainable; often built with iconic designs (see Qatar 2022) that provide a focal point for cities that are instantly recognisable internationally. They can also help to rejuvenate the economy and attract business in previously run down areas of a city in which they are anchored.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">One example of such evolution in the digital age is with the new phenomena of e-sports stadiums, where professional gamers compete with each other in front of a live audience. Such stadiums are already operational in the United States, China and South Korea and have a huge potential in terms of audience numbers and revenue.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">With a plethora of international standard stadiums already built and construction of the new Dubai Arena well underway, Dubai, ever at the cutting edge of building design and digital technology and soon to be host of EXPO 2020, has also announced the Dubai X-Stadium, a new e-gaming stadium being developed through a joint initiative between Dubai Media Office and TECOM Group.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The features and design of such e-gaming stadiums diverge from traditional stadiums, most notably in that all the action is on huge high definition screens rather than the audience focus being on the competitors, who may be squirreled away in separate booths during play. Use of holographic displays and augmented and virtual reality are also likely to play a significant part in the audience’s experience. Fans are also likely to have a much less sedentary, static relationship with the games – with the freedom to circulate within the stadium and experience other zones and outlets catering to the modern tastes of a new generation - soggy meat pies are likely to be thin on the ground.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Some UAE real estate legal considerations</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"We don’t want people to leave the stadium until the game finishes\"</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Jurgen Klopp, manager of Liverpool FC in 2016</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In the UAE, there are a number of mixed use, master communities that have a stadium as their focal point or as a prominent feature such as Sports City and Motor City in Dubai, Yas Island in Abu Dhabi and Hazza Bin Zayed Stadium in Al Ain (home of Al Ain F.C).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Developers of such cornerstone plots in such developments will often be granted certain concessions in terms of master community fees in light of the fact that use of such facilities is more intermittent than standard commercial use and that they serve as a key attractor to investors, retailers and third party purchasers of residential property within the master community. Any such concessions should be expressly disclosed to third party purchasers by the master developer prior to the parties entering into a sale and purchase agreement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition, although you would think that any such third party purchasers of residential property or commercial tenants would be well aware of potential infringements upon their use and enjoyment of their properties within such a stadium focussed master community, it would also be prudent of master developers to cover off the risk of any nuisance related claims. This may include express wording contained in the relevant master community declaration (which typically purchasers are bound by through the signing of a declaration of adherence upon purchase) or lease whereby a purchaser/tenant acknowledges and waives any claims relating to such matters as traffic congestion, noise and light pollution.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Another issue for retail tenants in stadium facilities are conflicts that may arise with the landlord/stadium owner’s sponsors – particularly in relation to special, one off events taking place at the stadium. It is therefore not unusual to find provisions in such leases whereby the landlord reserves rights to impose signage and branding blackouts or restrictions on the sale of goods or services during certain times when a conflict arises with sponsors. This can be a tricky issue and needs to be carefully managed and negotiated up front in the lease. Often with leases where tenants that have a particular connection to the type of sport practised at the stadium, the lease itself may be just a part of a wider commercial deal with the stadium and this may assist with negotiations.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Stadiums should also have good standard forms of venue hire agreements and short term kiosk type agreements in place. One issue to be considered is the potential effect of landlord and tenant laws in the UAE on such agreements. Unlike in the UK for example, where the case of Street v Mountford [1985] established that the legal distinction between a lease and an occupational licence is whether or not the tenant enjoys \"exclusive possession\" of the premises, there is no such distinction under UAE law. A short term occupational licence, even if it is described as such on its face and contains express wording that the parties do not intend to create a lease or a relationship of landlord or tenant, is therefore likely to be considered a lease if the question is brought before judicial authorities. This is significant as this will mean that the so called \"licence\" will be subject to landlord and tenant legislation which, in onshore Dubai for example, is generally very tenant friendly in terms of the rights of the landlord to terminate, renewal and security of tenure for tenants. Nevertheless, on a case by case basis depending on the circumstances, certain structuring of the relevant agreement can potentially help to mitigate the risk of it being caught by local landlord and tenant laws.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">...... and there goes the full time whistle.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For further information please contact Ian Arnott (i.arnott@tamimi.com)</p>'),
	(266145,25742,'MetaLink','content'),
	(266146,25742,'EditorLinkPost','http://localhost:8888/tamimi/wp-admin/post.php?post=7945&amp;action=edit'),
	(266147,25742,'ReportText','<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"alignright size-full wp-image-8021\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/12323.jpg\" alt=\"\" width=\"4272\" height=\"1747\" />A brief history of stadiums</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The origins of stadiums lie in Ancient Greece in the 8th Century BC where a \"stadion’ (or \"stadium\" in its translated Latin form) was a unit of measurement approximately 200 metres in length. The name of stadion referred to both the elongated U-shaped track of the same length and the sprint race that was run along its distance. The tracks were usually surrounded by rudimentary stands that were sometimes built into hillsides or surrounded by artificial embankments of stone steps in order for spectators to view the race.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Romans later advanced the development of stadiums with the \"circus\", which had a similar, open-ended horseshoe shape to the stadion, but which was used for horse and chariot racing. However, the familiar modern day design was really started with the amphitheatre, which could accommodate much larger crowds, was often multi-tiered and wrapped around the often gruesome gladiatorial, venatio (animal hunts) and naumachia (staged naval battles to the death involving condemned prisoners) events put on for mass entertainment in a circle of blood thirsty noise.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">With the fall of the Roman Empire, \"sports\" and their associated facilities also fell into a steep decline during the Middle Ages with the world more pre-occupied with other matters – with jousting being a notable anomaly.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It was not until the late 19th Century, with large scale urbanisation and the huge growth in organised sports such as football, rugby and cricket in the UK and baseball in the United States, that the modern era of the stadium began and which drew upon its ancient roots. Although the sportsmen on the field of play now managed to escape with their lives, football stadiums in the UK, at least, retained much of the \"red in tooth and claw\" atmosphere of their Roman ancestors right up to as recently as the end of the 1980s.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">My own first experience of attending a stadium was as a child with my father in 1987 standing in the Gallowgate End at St James’ Park watching Newcastle United inflict a very rare 2-1 victory over Manchester United. The memories of that day remain very vivid – the pitch, the ear-splitting volume of the chants, the soggy meat pies, watching Gazza do his stuff as a young 19 year-old, Gordon Strachan’s long range equaliser on the stroke of half time (with the ball remaining ominously lodged in the top right stanchion of the goal in front of me for the whole of the half time interval) and Paul Goddard’s 90th minute winner which sent the place ballistic in a primeval frenzy – all of which was simultaneously pretty intoxicating and slightly terrifying for a 10 year old.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">As Nick Hornby describes of his first football match in his 1992 novel Fever Pitch, an autobiographical account of his lifelong obsession with Arsenal FC:</p>\r\n<p dir=\"LTR\" align=\"LEFT\">\"All I saw on the day was a bewildering chain of incomprehensible incidents ... I remember the overwhelming maleness of it all – cigar and pipe smoke, foul language ... I’d been to public entertainments before, of course ... but that was different. The audiences I had hithero been a part of had paid to have a good time and, though occasionally one might spot a fidgety child or yawning adult, I hadn’t ever noticed faces contorted by rage or despair or frustration. Entertainment as pain was an idea entirely new to me\".</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, change was afoot. The design of football stadiums and related health and safety legislation in the UK were subject to a massive overhaul following a series of tragedies such as Hillsborough, the Bradford City fire and the Heysel Stadium disaster in the 1980s. Such catastrophes highlighted fatal flaws in stadium design and crowd control at such time. As a result, standing areas were removed from stadiums, which became all-seaters, and an era of much safer, comfortable and more family friendly stadiums was ushered in. The new designs also led to the commercialisation of the stadium with the introduction of hospitality areas and services, acoustics and lighting fit for TV purposes, the hosting of alternative events such as music concerts, and additional commercial facilities such as food and beverage outlets, hotels and conference rooms – all of which increased the frequency and diversity of stadium use.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>A view from pitch side</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Talking of Manchester United, I spoke with Dan Schofield, Head of Venue Operations at Old Trafford and self-confessed stadium geek on the current state of play. Dan provided me with the following insights:</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"Stadium development is such a hot topic at the moment in the football industry with clubs jostling and jockeying for position in bringing the newest and best developments in the quest for commercial gain, footballing excellence and fan experience. The big challenge for us all is to find the right balance of each of those elements and different clubs have taken differing approaches. Some, such as Liverpool, FC Barcelona and Sheffield United are looking at modernising existing stadiums whilst others, including Tottenham Hotspur, Everton and Chelsea are spending huge amounts on developing completely new stadiums. To justify these huge outlays in capital expenditure clubs are looking to \"sweat the asset\" and stage as many different events and activities as they can in the stadium. If managed well the non-matchday business can be as lucrative as the matchday business.</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>If you take a deep-dive in to the new White Hart Lane development, for example, you will see that Spurs have incorporated a skywalk, abseil and a huge Museum experience - all to bolster the non-matchday revenue generating potential of the facility. That is in addition to an average of 27 homes games (across all competitions) and a number of NFL games and concerts which they have contracted to take place. This diversification is always a balancing act between bringing in commercially viable events whilst not impacting on the footballing performance on the pitch. It’s been fascinating to follow the development at Spurs and in particular the retractable pitch they are implementing which will enable them to host NFL games and concerts on an artificial surface whilst the football surface is retracted out of the stadium on a series of mechanical trays, rails and hoists.</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>I’m very fortunate that my role heading up the venue operations at Manchester United allows me to visit stadiums all over the world and I make a point of trying to learn something from every venue we visit. I’m particularly looking forward to a trip to Michigan at the end of July where we are playing a pre-season tour game at the 107,000 capacity \"Big House\" stadium. Every stadium you visit is different and having joked about it for years I’ve certainly got enough Stadium based anecdotes to write a book called \"Around the World in 80 Stadiums\" which one day I may well do….. I recently added a new stadium I want to visit to my bucket-list with the Ekaterinburg Arena in Russia in its World Cup guise with its 147 foot high temporary scaffold stands literally outside the stadium with part of the perimeter cut out allowing fans to see the game. You look at photos, scratch your head and question how it’s possible and I’d love to visit and have a proper stomp all over it in person.</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>I’m blessed with a fantastic facility in the 75,000 capacity Old Trafford and it’s a fantastic time to be involved in the stadium industry with a number of exciting developments happening all over the world and new ones being announced on an almost weekly basis. I’d recommend for anyone interested in the subject to sign-up to a couple of industry newsletters which help keep you abreast of developments and changes in the global stadium industry, I’d particularly recommend www.stadia-magazine.com and www.sportindustry.biz \"</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"wp-image-8007  alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/shutterstock_421751620-1024x682.jpg\" alt=\"\" width=\"470\" height=\"313\" />E-gaming stadiums</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">As for the future, stadiums will continue to evolve - becoming safer and more technologically sophisticated, diverse in their uses and sustainable; often built with iconic designs (see Qatar 2022) that provide a focal point for cities that are instantly recognisable internationally. They can also help to rejuvenate the economy and attract business in previously run down areas of a city in which they are anchored.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">One example of such evolution in the digital age is with the new phenomena of e-sports stadiums, where professional gamers compete with each other in front of a live audience. Such stadiums are already operational in the United States, China and South Korea and have a huge potential in terms of audience numbers and revenue.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">With a plethora of international standard stadiums already built and construction of the new Dubai Arena well underway, Dubai, ever at the cutting edge of building design and digital technology and soon to be host of EXPO 2020, has also announced the Dubai X-Stadium, a new e-gaming stadium being developed through a joint initiative between Dubai Media Office and TECOM Group.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The features and design of such e-gaming stadiums diverge from traditional stadiums, most notably in that all the action is on huge high definition screens rather than the audience focus being on the competitors, who may be squirreled away in separate booths during play. Use of holographic displays and augmented and virtual reality are also likely to play a significant part in the audience’s experience. Fans are also likely to have a much less sedentary, static relationship with the games – with the freedom to circulate within the stadium and experience other zones and outlets catering to the modern tastes of a new generation - soggy meat pies are likely to be thin on the ground.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Some UAE real estate legal considerations</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"We don’t want people to leave the stadium until the game finishes\"</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Jurgen Klopp, manager of Liverpool FC in 2016</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In the UAE, there are a number of mixed use, master communities that have a stadium as their focal point or as a prominent feature such as Sports City and Motor City in Dubai, Yas Island in Abu Dhabi and Hazza Bin Zayed Stadium in Al Ain (home of Al Ain F.C).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Developers of such cornerstone plots in such developments will often be granted certain concessions in terms of master community fees in light of the fact that use of such facilities is more intermittent than standard commercial use and that they serve as a key attractor to investors, retailers and third party purchasers of residential property within the master community. Any such concessions should be expressly disclosed to third party purchasers by the master developer prior to the parties entering into a sale and purchase agreement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition, although you would think that any such third party purchasers of residential property or commercial tenants would be well aware of potential infringements upon their use and enjoyment of their properties within such a stadium focussed master community, it would also be prudent of master developers to cover off the risk of any nuisance related claims. This may include express wording contained in the relevant master community declaration (which typically purchasers are bound by through the signing of a declaration of adherence upon purchase) or lease whereby a purchaser/tenant acknowledges and waives any claims relating to such matters as traffic congestion, noise and light pollution.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Another issue for retail tenants in stadium facilities are conflicts that may arise with the landlord/stadium owner’s sponsors – particularly in relation to special, one off events taking place at the stadium. It is therefore not unusual to find provisions in such leases whereby the landlord reserves rights to impose signage and branding blackouts or restrictions on the sale of goods or services during certain times when a conflict arises with sponsors. This can be a tricky issue and needs to be carefully managed and negotiated up front in the lease. Often with leases where tenants that have a particular connection to the type of sport practised at the stadium, the lease itself may be just a part of a wider commercial deal with the stadium and this may assist with negotiations.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Stadiums should also have good standard forms of venue hire agreements and short term kiosk type agreements in place. One issue to be considered is the potential effect of landlord and tenant laws in the UAE on such agreements. Unlike in the UK for example, where the case of Street v Mountford [1985] established that the legal distinction between a lease and an occupational licence is whether or not the tenant enjoys \"exclusive possession\" of the premises, there is no such distinction under UAE law. A short term occupational licence, even if it is described as such on its face and contains express wording that the parties do not intend to create a lease or a relationship of landlord or tenant, is therefore likely to be considered a lease if the question is brought before judicial authorities. This is significant as this will mean that the so called \"licence\" will be subject to landlord and tenant legislation which, in onshore Dubai for example, is generally very tenant friendly in terms of the rights of the landlord to terminate, renewal and security of tenure for tenants. Nevertheless, on a case by case basis depending on the circumstances, certain structuring of the relevant agreement can potentially help to mitigate the risk of it being caught by local landlord and tenant laws.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">...... and there goes the full time whistle.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For further information please contact Ian Arnott (i.arnott@tamimi.com)</p>|<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"alignright size-full wp-image-8021\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/12323.jpg\" alt=\"\" width=\"4272\" height=\"1747\" /></strong></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">A brief history of stadiums</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The origins of stadiums lie in Ancient Greece in the 8th Century BC where a \"stadion’ (or \"stadium\" in its translated Latin form) was a unit of measurement approximately 200 metres in length. The name of stadion referred to both the elongated U-shaped track of the same length and the sprint race that was run along its distance. The tracks were usually surrounded by rudimentary stands that were sometimes built into hillsides or surrounded by artificial embankments of stone steps in order for spectators to view the race.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Romans later advanced the development of stadiums with the \"circus\", which had a similar, open-ended horseshoe shape to the stadion, but which was used for horse and chariot racing. However, the familiar modern day design was really started with the amphitheatre, which could accommodate much larger crowds, was often multi-tiered and wrapped around the often gruesome gladiatorial, venatio (animal hunts) and naumachia (staged naval battles to the death involving condemned prisoners) events put on for mass entertainment in a circle of blood thirsty noise.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">With the fall of the Roman Empire, \"sports\" and their associated facilities also fell into a steep decline during the Middle Ages with the world more pre-occupied with other matters – with jousting being a notable anomaly.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It was not until the late 19th Century, with large scale urbanisation and the huge growth in organised sports such as football, rugby and cricket in the UK and baseball in the United States, that the modern era of the stadium began and which drew upon its ancient roots. Although the sportsmen on the field of play now managed to escape with their lives, football stadiums in the UK, at least, retained much of the \"red in tooth and claw\" atmosphere of their Roman ancestors right up to as recently as the end of the 1980s.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">My own first experience of attending a stadium was as a child with my father in 1987 standing in the Gallowgate End at St James’ Park watching Newcastle United inflict a very rare 2-1 victory over Manchester United. The memories of that day remain very vivid – the pitch, the ear-splitting volume of the chants, the soggy meat pies, watching Gazza do his stuff as a young 19 year-old, Gordon Strachan’s long range equaliser on the stroke of half time (with the ball remaining ominously lodged in the top right stanchion of the goal in front of me for the whole of the half time interval) and Paul Goddard’s 90th minute winner which sent the place ballistic in a primeval frenzy – all of which was simultaneously pretty intoxicating and slightly terrifying for a 10 year old.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">As Nick Hornby describes of his first football match in his 1992 novel Fever Pitch, an autobiographical account of his lifelong obsession with Arsenal FC:</p>\r\n<p dir=\"LTR\" align=\"LEFT\">\"All I saw on the day was a bewildering chain of incomprehensible incidents ... I remember the overwhelming maleness of it all – cigar and pipe smoke, foul language ... I’d been to public entertainments before, of course ... but that was different. The audiences I had hithero been a part of had paid to have a good time and, though occasionally one might spot a fidgety child or yawning adult, I hadn’t ever noticed faces contorted by rage or despair or frustration. Entertainment as pain was an idea entirely new to me\".</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, change was afoot. The design of football stadiums and related health and safety legislation in the UK were subject to a massive overhaul following a series of tragedies such as Hillsborough, the Bradford City fire and the Heysel Stadium disaster in the 1980s. Such catastrophes highlighted fatal flaws in stadium design and crowd control at such time. As a result, standing areas were removed from stadiums, which became all-seaters, and an era of much safer, comfortable and more family friendly stadiums was ushered in. The new designs also led to the commercialisation of the stadium with the introduction of hospitality areas and services, acoustics and lighting fit for TV purposes, the hosting of alternative events such as music concerts, and additional commercial facilities such as food and beverage outlets, hotels and conference rooms – all of which increased the frequency and diversity of stadium use.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>A view from pitch side</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Talking of Manchester United, I spoke with Dan Schofield, Head of Venue Operations at Old Trafford and self-confessed stadium geek on the current state of play. Dan provided me with the following insights:</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"Stadium development is such a hot topic at the moment in the football industry with clubs jostling and jockeying for position in bringing the newest and best developments in the quest for commercial gain, footballing excellence and fan experience. The big challenge for us all is to find the right balance of each of those elements and different clubs have taken differing approaches. Some, such as Liverpool, FC Barcelona and Sheffield United are looking at modernising existing stadiums whilst others, including Tottenham Hotspur, Everton and Chelsea are spending huge amounts on developing completely new stadiums. To justify these huge outlays in capital expenditure clubs are looking to \"sweat the asset\" and stage as many different events and activities as they can in the stadium. If managed well the non-matchday business can be as lucrative as the matchday business.</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>If you take a deep-dive in to the new White Hart Lane development, for example, you will see that Spurs have incorporated a skywalk, abseil and a huge Museum experience - all to bolster the non-matchday revenue generating potential of the facility. That is in addition to an average of 27 homes games (across all competitions) and a number of NFL games and concerts which they have contracted to take place. This diversification is always a balancing act between bringing in commercially viable events whilst not impacting on the footballing performance on the pitch. It’s been fascinating to follow the development at Spurs and in particular the retractable pitch they are implementing which will enable them to host NFL games and concerts on an artificial surface whilst the football surface is retracted out of the stadium on a series of mechanical trays, rails and hoists.</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>I’m very fortunate that my role heading up the venue operations at Manchester United allows me to visit stadiums all over the world and I make a point of trying to learn something from every venue we visit. I’m particularly looking forward to a trip to Michigan at the end of July where we are playing a pre-season tour game at the 107,000 capacity \"Big House\" stadium. Every stadium you visit is different and having joked about it for years I’ve certainly got enough Stadium based anecdotes to write a book called \"Around the World in 80 Stadiums\" which one day I may well do….. I recently added a new stadium I want to visit to my bucket-list with the Ekaterinburg Arena in Russia in its World Cup guise with its 147 foot high temporary scaffold stands literally outside the stadium with part of the perimeter cut out allowing fans to see the game. You look at photos, scratch your head and question how it’s possible and I’d love to visit and have a proper stomp all over it in person.</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>I’m blessed with a fantastic facility in the 75,000 capacity Old Trafford and it’s a fantastic time to be involved in the stadium industry with a number of exciting developments happening all over the world and new ones being announced on an almost weekly basis. I’d recommend for anyone interested in the subject to sign-up to a couple of industry newsletters which help keep you abreast of developments and changes in the global stadium industry, I’d particularly recommend www.stadia-magazine.com and www.sportindustry.biz \"</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"wp-image-8007 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/shutterstock_421751620-1024x682.jpg\" alt=\"\" width=\"470\" height=\"313\" />E-gaming stadiums</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">As for the future, stadiums will continue to evolve - becoming safer and more technologically sophisticated, diverse in their uses and sustainable; often built with iconic designs (see Qatar 2022) that provide a focal point for cities that are instantly recognisable internationally. They can also help to rejuvenate the economy and attract business in previously run down areas of a city in which they are anchored.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">One example of such evolution in the digital age is with the new phenomena of e-sports stadiums, where professional gamers compete with each other in front of a live audience. Such stadiums are already operational in the United States, China and South Korea and have a huge potential in terms of audience numbers and revenue.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">With a plethora of international standard stadiums already built and construction of the new Dubai Arena well underway, Dubai, ever at the cutting edge of building design and digital technology and soon to be host of EXPO 2020, has also announced the Dubai X-Stadium, a new e-gaming stadium being developed through a joint initiative between Dubai Media Office and TECOM Group.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The features and design of such e-gaming stadiums diverge from traditional stadiums, most notably in that all the action is on huge high definition screens rather than the audience focus being on the competitors, who may be squirreled away in separate booths during play. Use of holographic displays and augmented and virtual reality are also likely to play a significant part in the audience’s experience. Fans are also likely to have a much less sedentary, static relationship with the games – with the freedom to circulate within the stadium and experience other zones and outlets catering to the modern tastes of a new generation - soggy meat pies are likely to be thin on the ground.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Some UAE real estate legal considerations</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"We don’t want people to leave the stadium until the game finishes\"</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Jurgen Klopp, manager of Liverpool FC in 2016</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In the UAE, there are a number of mixed use, master communities that have a stadium as their focal point or as a prominent feature such as Sports City and Motor City in Dubai, Yas Island in Abu Dhabi and Hazza Bin Zayed Stadium in Al Ain (home of Al Ain F.C).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Developers of such cornerstone plots in such developments will often be granted certain concessions in terms of master community fees in light of the fact that use of such facilities is more intermittent than standard commercial use and that they serve as a key attractor to investors, retailers and third party purchasers of residential property within the master community. Any such concessions should be expressly disclosed to third party purchasers by the master developer prior to the parties entering into a sale and purchase agreement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition, although you would think that any such third party purchasers of residential property or commercial tenants would be well aware of potential infringements upon their use and enjoyment of their properties within such a stadium focussed master community, it would also be prudent of master developers to cover off the risk of any nuisance related claims. This may include express wording contained in the relevant master community declaration (which typically purchasers are bound by through the signing of a declaration of adherence upon purchase) or lease whereby a purchaser/tenant acknowledges and waives any claims relating to such matters as traffic congestion, noise and light pollution.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Another issue for retail tenants in stadium facilities are conflicts that may arise with the landlord/stadium owner’s sponsors – particularly in relation to special, one off events taking place at the stadium. It is therefore not unusual to find provisions in such leases whereby the landlord reserves rights to impose signage and branding blackouts or restrictions on the sale of goods or services during certain times when a conflict arises with sponsors. This can be a tricky issue and needs to be carefully managed and negotiated up front in the lease. Often with leases where tenants that have a particular connection to the type of sport practised at the stadium, the lease itself may be just a part of a wider commercial deal with the stadium and this may assist with negotiations.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Stadiums should also have good standard forms of venue hire agreements and short term kiosk type agreements in place. One issue to be considered is the potential effect of landlord and tenant laws in the UAE on such agreements. Unlike in the UK for example, where the case of Street v Mountford [1985] established that the legal distinction between a lease and an occupational licence is whether or not the tenant enjoys \"exclusive possession\" of the premises, there is no such distinction under UAE law. A short term occupational licence, even if it is described as such on its face and contains express wording that the parties do not intend to create a lease or a relationship of landlord or tenant, is therefore likely to be considered a lease if the question is brought before judicial authorities. This is significant as this will mean that the so called \"licence\" will be subject to landlord and tenant legislation which, in onshore Dubai for example, is generally very tenant friendly in terms of the rights of the landlord to terminate, renewal and security of tenure for tenants. Nevertheless, on a case by case basis depending on the circumstances, certain structuring of the relevant agreement can potentially help to mitigate the risk of it being caught by local landlord and tenant laws.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">...... and there goes the full time whistle.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>For further information please contact Ian Arnott (i.arnott@tamimi.com)</em></p>');

