UAE’s Etisalat says postpaid bills will increase by 5%

UAE telecoms operator Etisalat has detailed how it will start collecting value added tax on its products and services from January 1.

The incoming 5 per cent VAT rate, the UAE is implementing alongside Saudi Arabia, will apply to all telecoms and broadband services.

Read: Revealed: Goods and services subject to VAT in the UAE

Etisalat said for postpaid UAE customers the 5 per cent VAT rate will be applied to their monthly bill.

Meanwhile, prepaid customers will “continue to recharge as usual” .

“The 5 percent VAT will apply on the actual usage of the credit towards Etisalat services and not on the prepaid recharge card’s value,” the company clarified.

Business customers are encouraged to register with the Federal Tax Authority and submit their tax registration number to Etisalat to handle VAT charges.

Similar measures are expected to be implemented by rival telco Du and other telecoms firms in Saudi Arabia.

In the other Gulf countries the same charges will not apply on telecoms services until they each individually implement VAT over the next two years.

Read: All GCC states still committed to VAT but dates will vary, IMF says