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The introduction of Value Added Tax (“VAT”) looks like it is becoming more of a certainty according to recent press reports, and could well be set at the bottom end of the 3% to 5% previously mooted. Whilst Government departments are no doubt getting ready companies, also, will have to prepare themselves in good time to ensure that they have the necessary record-keeping in place including, possibly, changes to their accounting software in order to ensure that they do not fall foul of the laws and regulations once they are in force. This may cause some issues for those companies that operate in sectors in which prices are subject to negotiation, particularly at the retail level. No doubt there will be an added audit issue – ensuring that VAT liabilities or assets are completely and accurately recorded.
The common topic of rent levels has been given added impetus following reports of a house rent index being implemented in Dubai in order to assist people – tenants and landlords alike - in measuring a reasonable rent in any given area. This should in theory help in monitoring rent levels. Disparities in ages of properties, levels and quality of maintenance, or indeed if maintenance is provided by the landlord, the particular aspect of the property (what is it facing – main road, park, beach, another property, etc.) will no doubt be taken into account, but how to measure any particular property against the index – averages can be notoriously misleading – we will have to wait and see.
We also have articles on the sub-prime crisis and due diligence reviews in addition to our usual offshore and free zone updates.
In this edition we have had the pleasure of interviewing Mr. Ali Zal Mansouri, Chief Executive of The Developers, an investment and project development company based in Abu Dhabi.
Please feel free to write (update@pkfuae.com) if you would like to express an opinion on any matter inside.
GRAHAM MARTINS
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