1. What is VAT?
The value added tax (VAT) is an amount in the form of a percentage added to the supplies of goods and services that are bought or availed in the United Arab Emirates. The VAT is imposed by the Federal Tax Authority in the UAE and it is one of the most common types of consumption tax found around the world. Over 150 countries have implemented VAT (or its equivalent, goods and services tax).
2. When will the VAT go into effect and what will be the rates?
VAT will be imposed effective 1 January 2018 at a standard rate of 5%.
3. What is the impact of VAT on Sharjah Islamic Bank (SIB) customers?
The VAT will be incorporated in the relevant fees and charges where VAT is applicable, therefore, our fees will appear inclusive of the VAT.
4. Will the VAT apply on the account balance?
No, the VAT will not apply on any account balance irrespective of the account type (saving account, current account, fixed deposit, etc.).
5. Will the VAT apply on finance amounts?
No, the VAT will not apply on any finance amount irrespective of the finance type (personal finance, car finance, real estate finance, etc.).
6. Will the VAT apply on profits paid on saving accounts and fixed deposits?
No, profits paid to the customer on saving accounts and fixed deposits will be subject to the VAT.
7. Will the VAT apply on all profits charged by the bank on finances?
No, the VAT will not apply on profits of finances.
8. Will the VAT apply on cash deposited or withdrawn from the account?
No, the VAT will not apply on the cash deposited or withdrawn through the branch or the ATM or any channel.
9. Will the VAT apply on ALL fees & charges?
No, the VAT will only apply on fees of services provided to customers. The VAT will NOT be applied on penalties like minimum balance fee on accounts, late payment fee on finance, etc.
10. Will the VAT apply on remittances received or sent from the account?
No, the VAT will NOT apply on received or sent remittances or transfers, whether local or international.
11. Will the VAT apply on the 0% finances offered by Sharjah Islamic Bank?
No, the VAT will NOT apply the 0% finances offered by the bank.
12. Will the VAT apply on credit card payment?
No, the VAT will NOT apply on credit card payments.
13. Will the bank customers be required to pay the VAT to the authority?
No, the customers will not be required to do anything.